Effective January 1, 2023, the laws governing Wisconsin limited liability companies (LLC), Wisconsin limited partnerships (LP), and Wisconsin limited liability limited partnerships (LLLP) will change.
You should consider the implications of the New Law and if you have doubt, “opt out”, as you can always “opt in” to the New Law later. “Opting out” may be advantageous depending upon your objectives.
Summary of Key Changes of the New Law
- An operating agreement governing the Covered Entity and its members is likely to be found in effect, even if oral or implied, creating confusion and lack of specificity;
- Owners are required to comply with the statutory duties of care and loyalty, as well as the contractual obligations of good faith and fair dealing; provided owners may agree to limit these duties and/or the remedies for breach to a certain extent pursuant (only) to a partnership agreement or written operating agreement;
- LLC articles of organization no longer require the management structure to be included;
- Voting thresholds must be met to approve certain activities;
- Members of a member-managed LLC are not agents of the LLC solely by reason of being a member, removing the concept of apparent authority; and
- Liability protection for limited partners that participate in LP’s management
File Statement of Nonapplicabiliy by December 30, 2022
An existing LLC, LP or LLLP may “opt out” of the New Law by filing a Statement of Nonapplicability with the Wisconsin Department of Financial Institutions (WDFI) no later than December 30, 2022. Please contact your lawyer if you would like to either opt into the New Law or file a Statement of Nonapplicability. Hawkins Ash CPAs cannot issue legal advice or file these forms for you.
Your choice to “opt out” or not doesn’t affect your tax return or financial statement.ons that may trigger these rules. You can also contact us if you have any questions.
