Wis. Stat. § 183.0405
Limitations on distributions
Redline — January 1, 2003 → current.View current text →
Current — January 1, 2021
As of January 1, 2003
(1) A limited liability company shall keep at its principal place of business all of the following:
(a) A list, kept in alphabetical order, of each past and present member and, if applicable, manager. The list shall include the full name and last-known mailing address of each member or manager, the date on which the person became a member or manager and the date, if applicable, on which the person ceased to be a member or manager.
(b) A copy of the articles of organization and all amendments to the articles.
(c) Copies of the limited liability company's federal, state and local income or franchise tax returns and financial statements, if any, for the 4 most recent years or, if such returns and statements are not prepared for any reason, copies of the information and statements provided to, or which should have been provided to, the members to enable them to prepare their federal, state and local income tax returns for the 4 most recent years.
(d) Copies of all operating agreements, all amendments to operating agreements and any operating agreements no longer in effect.
(e) Unless already set forth in an operating agreement, written records containing all of the following information:
1. The value of each member's contribution made to the limited liability company as determined under s. 183.0501 (2) .
2. Records of the times at which or the events upon which any additional contributions are agreed to be made by each member.
3. Any events upon which the limited liability company is to be dissolved and its business wound up.
4. Other writings as required by an operating agreement.
(2) Upon reasonable request, a member may, at the member's own expense, inspect and copy during ordinary business hours any limited liability company record required to be kept under sub. (1) and, unless otherwise provided in an operating agreement, any other limited liability company record, wherever the record is located.
(3) Members or, if the management of the limited liability company is vested in one or more managers, managers shall provide, to the extent that the circumstances render it just and reasonable, true and full information of all things affecting the members to any member or to the legal representative of any member upon reasonable request of the member or the legal representative.
(4) Failure of a limited liability company to keep or maintain any of the records or information required under this section shall not be grounds for imposing liability on any person for the debts and obligations of the limited liability company.
(1) A limited liability company may not make a distribution, including a distribution under s. 183.0707 , if after the distribution any of the following applies:
(a) The company would not be able to pay its debts as they become due in the ordinary course of the company's activities and affairs.
(b) The company's total assets would be less than or equal to the sum of its total liabilities plus the amount that would be needed, if the company were to be dissolved and wound up at the time of the distribution, to satisfy the preferential rights upon dissolution and winding up of members and transferees whose preferential rights are superior to the rights of persons receiving the distribution.
(2) A limited liability company may base a determination that a distribution is not prohibited under sub. (1) on any of the following:
(a) Financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances.
(b) A fair valuation or other method that is reasonable under the circumstances.
(3) Except as otherwise provided in sub. (5) , the effect of a distribution under sub. (1) is measured as follows:
(a) In the case of a distribution as described in s. 183.0102 (4) (a) 1. and 2. , as of the earlier of the following:
1. The date money or other property is transferred or debt is incurred by the limited liability company.
2. The date the person entitled to the distribution ceases to own the interest or right being acquired by the company in return for the distribution.
(b) In the case of any distribution of indebtedness other than one under par. (a) , as of the date the indebtedness is distributed.
(c) In all cases other than those under par. (a) or (b) , as of the following:
1. The date the distribution is authorized, if the payment occurs not later than 120 days after that date.
2. The date the payment is made, if the payment occurs more than 120 days after the distribution is authorized.
(4) A limited liability company's indebtedness to a member or transferee incurred by reason of a distribution made in accordance with this section is at parity with the company's indebtedness to its general, unsecured creditors, except to the extent subordinated by agreement.
(5) A limited liability company's indebtedness, including indebtedness issued as a distribution, is not a liability for purposes of sub. (1) if the terms of the indebtedness provide that payment of principal and interest is made only if and to the extent that payment of a distribution could then be made under this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is made.
(6) In measuring the effect of a distribution under s. 183.0707 , the liabilities of a dissolved limited liability company do not include any claim that has been disposed of under s. 183.0704 , 183.0705 , or 183.0706 .
Official source: Wisconsin State Legislature. Reproduced from public-domain Wisconsin statutes; confirm against the official source for the current text. Not legal advice.