On April 15, 2022, Gov. Tony Evers signed a new limited liability companies (LLC) law that applies to new LLCs formed on or after January 1, 2023, the effective date of the new law.

Existing LLCs have a choice to make regarding the application of the new LLC law.

1. Existing LLCs may opt in to the new LLC law prior to the January 1, 2023, effective date by filing a Statement of Applicability, found at www.wdfi.org/_resources/indexed/site/corporations/dfi-corp-399-599.pdf, with the Wisconsin Department of Financial Institutions (DFI).
2. Alternatively, existing LLCs may also opt out of the new LLC law prior to the January 1, 2023, effective date and continue to be subject to the prior law by filing a Statement of Nonapplicability, found at www.wdfi.org/_resources/indexed/site/corporations/dfi-corp-398-598.pdf.
3. If LLC members do nothing, the new law will apply. 

The applicability and nonapplicability forms are fillable online, but they need to be printed, signed and mailed to DFI. There is no filing fee.

Obviously, the best thing for real estate licensees and others who have LLCs is to consult with their attorney as to which choice they should make. Issues that may need to be discussed, depending upon the size and management style of the LLC, are operating agreements, apparent authority, fiduciary duties and management.

LLC members may want to consider that several attorneys in this field have observed that for single-member LLCs, whether they are governed by the new law or the old law, should hold few consequences since there is only the one member. If they do nothing, they will be under the new law.

For existing LLCs with no written operating agreement, the old law provides the rules by which the LLC must operate, while under the new law, courts are empowered and required to create an operating agreement on behalf of the LLC members based on the LLC members’ course of actions. For LLCs with written operating agreements, the choice is a bit more complicated — they should confer with legal counsel.

Also note that an LLC that files a Statement of Nonapplicability may later decide to be subject to the new version of the law by filing a Statement of Applicability with the DFI. Statements of Applicability, however, are not revocable, so filing a Statement of Applicability is a final decision. Filing a Statement of Nonapplicability is not.

The LLC law is found in Wis. Stat. Chapter 183, which has been entirely rewritten. The new LLC law is found at docs.legis.wisconsin.gov/statutes/statutes/183.pdf and the provision regarding applicability is found in § 183.0110 at docs.legis.wisconsin.gov/statutes/statutes/183/i/0110.