The governance of Limited Liability Companies (LLCs) in Wisconsin is governed by Chapter 183 of the Wisconsin statutes. Those statutes set out the default rules regarding management and membership in an LLC. In an LLC, the owners are called members and have a membership percentage, rather than shareholders with shares of stock like a corporation. While any of these items can be modified by an operating agreement for an LLC (the written agreement between the members), the basic rights of a minority member (less than 50% ownership) are as follows:
- A vote equal to your percentage interest, pursuant to Wis. Stat. 183.0404. If the LLC is member managed, 51% vote is needed to decide any matter connected with the business of an LLC.
- Allocation of profits and losses commensurate with your contribution to the LLC pursuant to Wis. Stat. 183.0503. If not otherwise set forth in an operating agreement, the determination of the value of the contribution from each LLC member is to be determined pursuant to Wis. Stat. 183.0501 by unanimous consent of the members.
- Access to the books and records of the LLC pursuant to Wis. Stat. 183.0405.
While there may be disputes about any number of things within a company, and of course, an operating agreement may modify these rights, these basic rights of a member of an LLC hold up whether you are a 1% member or 99% member. If you are a member of an LLC and believe you are being denied these basic rights of membership, you should contact counsel to see what can be done.
Sean M. Sweeney is a shareholder at Halling & Cayo. His practice focuses on business litigation, civil litigation, stock broker fraud, business transnational law, and real estate law. Sean represents investors, small business owners, and companies locally in Wisconsin, all over the United States, as well as internationally with clients in Canada, Germany, and Australia.
Email Sean: [email protected]