Inside Track: Revised Uniform Limited Liability Company Act: A Proposal for Wisconsin:

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  • Inside Track
    August
    21
    2013

    Revised Uniform Limited Liability Company Act: A Proposal for Wisconsin

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    Aug. 21, 2013 – In this video, Milwaukee attorney Adam Tutaj discusses a proposed overhaul of Wisconsin Limited Liability Company Act.

    Tutaj co-chairs the State Bar of Wisconsin Business Law Section Chapter 183 Subcommittee. By adopting a uniform law, he says, Wisconsin judges and lawyers will be able to access cases that develop in other states as persuasive authority.

    Wisconsin was one of the first states to adopt LLCs when it was approved by the IRS in 1993. The statute has been in the same format since then, and there have been many changes in the development of business practice.

    “There is a lot of uncertainty on clarity in our existing law, which is what motivated the forming of the subcommittee,” said Tutaj.

    After a significant amount of research and analysis, the subcommittee proposed to amend and restate Chapter 183 to adopt the Revised Uniform Limited Liability Company Act (RULLCA). The National Conference of Commissioners on Uniform State Law recommended enacting RULLCA in all states – but with certain modifications intended to preserve what the subcommittee believes are important, longstanding policy judgments reflected in the current Chapter 183.

    “One of the most interesting changes in RULLCA relates to the specific recognition of oral or implied operating agreements,” said Tutaj. “This is where the subcommittee departs a bit from RULLCA, believing in the concept of the written operating agreement. Some elements can change, but the subcommittee believes they are so important that it makes sense for them to be set forth in writing.

    “Some version of RULLCA has been adopted in nine states, including California and Florida, which are two very large business states,” Tutaj notes.

    The subcommittee’s draft proposal was submitted to the Department of Financial Institutions. “We hope to have their comments by the end of the summer, then we will further refine the language and submit it to the Legislative Reference Bureau,” said Tutaj. “The subcommittee has worked on this for four years. The proposal represents a wide variety of practices, including large and small firms, an academic perspective, and different areas of the state. The subcommittee has reached out to a number of colleagues over the years in firms of all sizes because we wanted to make sure we had the widest range of experience so we could best understand which areas people think needed clarification in the law.”

    “The subcommittee hopes the Legislature regards this as a beneficial statute, not just for the practicing bar but for the business community,” he said.

    Tutaj is a shareholder with Meissner Tierney Fisher & Nichols S.C., Milwaukee, where he practices in the areas of corporate, tax and health law.