183.0802 Events of dissociation.

(1) A person ceases to be a member of a limited liability company upon the occurrence of, and at the time of, any of the following events:

(a) The member withdraws by voluntary act from the limited liability company under sub. (3).

(b) The member assigns all of the member's interest in the limited liability company and one or more assignees are admitted as members under s. 183.0706 (1).

(c) The member is removed as a member in accordance with an operating agreement.

(cm) Unless otherwise provided in an operating agreement, the member assigns all of the member's interest in the limited liability company if the member is removed by the affirmative vote of the members as determined under s. 183.0404 (1) (a), except that the vote of the member who assigns all of the member's interest shall be excluded.

(d) Unless otherwise provided in an operating agreement or by the written consent of all members at the time of the event, the member does any of the following:

1. Makes an assignment for the benefit of creditors.

2. Files a voluntary petition in bankruptcy.

3. Becomes the subject of an order for relief under the federal bankruptcy laws.

4. Files a petition or answer seeking for the member any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation.

5. Files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the member in any proceeding under subd. 4.

6. Seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the member or of all or any substantial part of the member's properties.

(e) Unless otherwise provided in an operating agreement or by the written consent of all members:

1. At the expiration of 120 days after the commencement of any involuntary proceeding against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any statute, law or regulation, if the proceeding has not been dismissed.

2. At the expiration of 120 days after the appointment without the member's consent or acquiescence of a trustee, receiver or liquidator of the member or of all or any substantial part of the member's properties, if the appointment is not vacated or stayed, or at the expiration of 120 days after the expiration of any stay, if the appointment is not vacated.

(f) Unless otherwise provided in an operating agreement or by the written consent of all members, if the member is an individual:

1. The member's death.

2. The entry of an order by a court of competent jurisdiction adjudicating the member incompetent to manage the member's person or estate.

(g) Unless otherwise provided in an operating agreement or by the written consent of all members at the time, if the member is a trust or is acting as a member by virtue of being a trustee of a trust, the termination of the trust, but not merely the substitution of a new trustee.

(h) Unless otherwise provided in an operating agreement or by the written consent of all members at the time, if the member is a separate domestic or foreign limited liability company, the dissolution and commencement of winding up of the separate domestic or foreign limited liability company.

(i) Unless otherwise provided in an operating agreement or by the written consent of all members at the time, if the member is a corporation, the filing of articles of dissolution for the corporation or the revocation of its charter and the lapse of the time provided by the laws of the state of incorporation without a reinstatement of its charter.

(j) Unless otherwise provided in an operating agreement or by the written consent of all members at the time, if the member is an estate, the distribution by the fiduciary of the estate's entire interest in the limited liability company.

(k) Unless otherwise provided in an operating agreement or by the written consent of all members at the time, if the member is a partnership or other entity not described under pars. (g) to (j), the dissolution of the partnership or entity.

(2) The members may provide in an operating agreement for other events the occurrence of which result in a person ceasing to be a member of the limited liability company.

(3)

(a) Except as provided in par. (b), a member may voluntarily withdraw from a limited liability company at any time by giving written notice to the other members, or on any other terms as are provided in an operating agreement. If the withdrawal occurs as a result of wrongful conduct of the member, the limited liability company may recover from the withdrawing member damages as a result of the wrongful conduct and may offset the damages against the amount otherwise distributable to the member, in addition to pursuing any remedies provided for in an operating agreement or otherwise available under applicable law.

(b) If a member acquired an interest in a limited liability company for no or nominal consideration or owns an interest as to which the power to withdraw is prohibited or otherwise restricted in the operating agreement, the member may withdraw from the limited liability company with respect to that interest only in accordance with the operating agreement and only at the time or upon the occurrence of an event specified in the operating agreement. If the operating agreement does not specify the time or the event upon the occurrence of which the member may withdraw, a member who acquired an interest in the limited liability company for no or nominal consideration may not withdraw prior to the time for the dissolution and commencement of winding up of the limited liability company without the written consent of all members of the limited liability company. Unless otherwise provided in an operating agreement, in the case of a limited liability company that is organized for a definite term or particular undertaking, the operating agreement shall be considered to provide that a member may not withdraw before the expiration of that term or completion of that undertaking.

History: 1993 a. 112; 1995 a. 400; 1997 a. 27; 2001 a. 44.