October 25, 2021 – A lot of change happens in three decades. Thirty years ago, the very first “webpage” was being created, and cellular phones were large and uncommon. A “text message” was something you might read on paper, phone numbers had to be memorized, and a trip to a restaurant might begin with a host or hostess asking if you’d like a smoking or non-smoking section.
Some things haven’t changed in that time – and among them are Wisconsin’s business laws, which haven’t been updated in full since 1993.
Assembly Bill 566 and
Senate Bill 566, introduced by Senator Eric Wimberger (R – Green Bay), and Representative Ron Tusler (R – Harrison), would change this by making important updates to Wisconsin’s business entity laws, bringing them in line with those promoted by the Uniform Law Commission. Twenty-three other states have already adopted many of these Uniform Laws, leaving Wisconsin behind other states that have become more competitive and attractive to business innovators.
On October 21, members of the Business Law Section testified in favor of AB/SB 566 at a joint public hearing held by the Assembly Committee on Financial Institutions and the Senate Committee on Veterans and Military Affairs and Constitution and Federalism. They raised concerns that Wisconsin based businesses were moving to incorporate in other states because of Wisconsin’s outdated entity laws, and that AB/SB 566 could help change that. Members also addressed the fact that the proposal is very lengthy at several hundred pages of text, and reiterated that the bill’s purpose is to streamline, modernize, and bring into uniformity five entire chapters of business entity law.
AB/SB 566 would accomplish the following:
Adopts the current ULC Uniform Law for Wisconsin’s Limited Liability Company Act.
Updates Wisconsin's Limited Partnership Statutes to reflect the Revised Uniform Limited Partnership Act, initially promulgated by the ULC in 1985.
Streamlines and integrates filing and other procedures for the Department of Financial Institutions, which are estimated to generate a savings for the DFI of approximately $600,000 per year.
Consistent with ULC Uniform Law, clarifies the apparent authority of managers and members and allows for filings with the DFI to provide notice to outside parties.
Enables General Partnerships to engage in merger, conversion and other "cross species" transactions with other types of entities.
Modernizes the limited liability provisions applicable to Limited Partnerships, allowing them to elect limited liability for their general partners and eliminating certain language that proved to be problematic with respect to the liability of limited partners.
Makes related coordinating revisions to Chapters 180 and 181 (pertaining to business corporations and nonstock corporations, respectively).
Besides for the Business Law Section of the State Bar, AB/SB 566 is also supported by the Wisconsin Institute of Certified Public Accountants and the Wisconsin Bankers Association.
What You Can Do: State Bar of Wisconsin Advocacy Network
State Bar members who support the aims of AB/SB 566 are encouraged to send a message to their lawmakers using the
Advocacy Network. This link will bring you to a separate page that will match you to your lawmakers based on your zip code, and allow you to customize a sample message to your state legislators.
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