Sign In
    Wisconsin Lawyer
    July 01, 2003

    Legislative Watch

    Soon-to-be introduced legislation revises chapter 180, Wisconsin's corporation law, to fix AN unintended result of the Next Economy Legislation, among other improvements in process and efficiency.

    Cathy Stepp

    Wisconsin LawyerWisconsin Lawyer
    Vol. 76, No. 7, July 2003

    Improving Wisconsin's Business Climate

    \Soon-to-be introduced legislation revises chapter 180, Wisconsin's corporation law, to fix an unintended result of the Next Economy Legislation, among other improvements in process and efficiency.

    by Cathy Stepp

    Cathy     SteppSen. Cathy Stepp represents the 21st Senate District, which includes most of Racine County. She was elected as a freshman senator in November 2002 and serves as chair of the Senate Committee on Economic Development, Job Creation and Housing. She also serves on the Board of Directors of Freddie Mac and is a past member of the Wisconsin Natural Resources Board.

    As a legislator and a small business owner, I often find myself saying, "There has to be a better way." All too often it seems that our laws and regulations are overly complicated and confusing, which results in barriers to progress and an incentive to do business elsewhere. This is especially true with respect to many aspects of Wisconsin's corporate law in chapter 180. Fortunately, it doesn't need to be that way. In fact, I'm working on a proposal with the State Bar's Business Law Section that will streamline many aspects of our corporate law and eliminate confusing and complicated requirements.

    By way of background, I am a freshman senator with small-business experience, and I also serve on the Board of Directors for Freddie Mac. Because I represent an area with historically high unemployment, growing our economy through economic development is my top legislative priority. As chair of the Senate Committee on Economic Development, Job Creation and Housing, I have a unique opportunity to craft legislation that positively affects Wisconsin's business climate. Making changes that will simplify our laws governing business corporations will be an important piece of that puzzle.

    To do that, I am partnering with the Business Law Section on a package of changes to update and modernize Wisconsin's corporations law. The process by which corporations communicate with shareholders, create committees, execute mergers, and transfer property often is cumbersome and more complicated than need be. Our bill will make it simpler and more efficient for a corporation to conduct these functions as a corporate entity. The bill also seeks to fix a problem created by last session's passage of the Next Economy Legislation (2001 WI Act 44) relating to recording deeds for mergers or conversions.

    The so-called "Next Economy Glitch" creates confusion and uncertainty in the merger/conversion process, and gives corporations an incentive to execute these mergers/conversions under other states' more attractive business combination laws. Specifically, the Next Economy law requires the transfer of the entity's property to a surviving entity by recording the transferring instrument with the county Register of Deeds - a provision not found under previous law. (Please see a related article.) Our bill fixes this cumbersome problem by allowing real property to transfer to surviving entities without a requirement to record deeds or execute real estate transfer tax returns. Making this change will capture the true intent of the Next Economy law by allowing cross-species mergers with a simple filing. It also reflects the way real estate has been transferred under corporate law for years.

    Other aspects of the bill will make important changes, such as to allow articles of incorporation to specify the manner in which shareholder meetings will be conducted, streamline filings, and give boards of directors more flexibility in the process of executing mergers. I will be circulating this legislation for sponsorship in the very near future and hope to have the bill introduced in time for consideration during the floor session this fall. It is particularly important to move quickly on this legislation because fixing the Next Economy Glitch will be an important part of making Wisconsin an easier place to do business. I am very thankful for all of the help the State Bar of Wisconsin has given toward making this bill a reality, and I look forward to working with the Bar toward successful passage.




News & Pubs Search

-
Format: MM/DD/YYYY