What Is a Wisconsin LLC Operating Agreement?
A Wisconsin LLC operating agreement establishes uniform guidelines for profit sharing, officer appointments, tax classification, and other aspects of the LLC’s operations. Company owners can decide on the specific terms together and sign the resulting document into effect. Members retain their own copies and can make amendments if the other members concur with the proposed changes.
An LLC operating agreement in Wisconsin can clarify whether the LLC will be member-managed or manager-managed. It also allows owners to define a single-member or multi-member structure.
Does Wisconsin Require an Operating Agreement for an LLC?
An operating agreement for an LLC in Wisconsin is not required. However, it’s strongly advised to have one. It reinforces liability protection, ensuring the owners’ assets remain separate from the company’s assets.
When you create an LLC operating agreement in Wisconsin, you can also dictate how your LLC functions. Without one, your LLC will be subject to default state laws. State laws support operability, but some regulations may not align with your preferences.
Banks and other financial institutions may require it before allowing your LLC to open a bank account or receive a loan. So, it’s good to have one readily available so your LLC can partake in activities to help it grow and stay funded.
How to Form an LLC in Wisconsin
While an LLC operating agreement is optional for a Wisconsin LLC, you must file the articles of organization to officially create your entity. This document is formally known as Form 502. You must file it with the Wisconsin Department of Financial Institutions (DFI).
Changes to Wisconsin LLC Operating Agreements Under the New 2023 Laws
The Wisconsin Uniform Limited Liability Company Law (WULLCL) went into effect on January 1, 2023. It governs all aspects of LLC operating agreements for LLCs formed after that date.
LLCs that existed before that date had the option to opt out of the new rules, provided that they submitted a Statement of Non-Applicability to the Wisconsin DFI. If they took no action, they automatically became subject to the new rules on January 1, 2023.
Some key changes that apply to operating agreements under the new laws include the following:
- Operating agreements don’t have to just be written. WI Stat § 183.0102(13) states that operating agreements can be written, oral, or implied. However, written operating agreements are still required for some topics, such as altering fiduciary duties.
- The manager-managed designation must be included in the operating agreement. Your operating agreement must state whether the LLC will be manager-managed. If no clarification is present, it will be assumed that the LLC is member-managed (WI Stat § 183.0407).
- Your operating agreement cannot adjust certain duties. All LLCs must comply with the duty of loyalty, the duty of care, and the obligations of good faith and fair dealing (WI Stat § 183.0409). You may not remove these duties from your operating agreement, but you can contract around them.
- Old operating agreements can remain valid. WI Stat § 183.0110(2)(d)(2) allows existing operating agreements to remain valid, provided that they comply with the provisions of the old law.
Sample Wisconsin LLC Operating Agreement
Below, you can see our Wisconsin LLC operating agreement template to learn more about its format and structure. When you’re ready, you can go through Legal Templates’s guided form to write your own rules for your Wisconsin LLC. Once you’re done, download it in PDF or Word format and distribute copies to all members. Retain a copy within the company records as well.
