Wisconsin LLC Operating Agreement
Every Wisconsin LLC should have an operating agreement in place.
While not legally required by the state, having a written operating agreement will set clear rules and expectations for the management and operations of your LLC.
Download our free Wisconsin operating agreement template below or sign up to create a custom operating agreement using our free tool.
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Free Wisconsin LLC Operating Agreement Templates
We offer operating agreement templates for single-member LLCs and multi-member LLCs (including member-managed and manager-managed) as well as a customizable operating agreement tool.
Single-Member LLC Operating Agreement
Our single-member LLC operating agreement template was created for limited liability companies with only one member, where the sole member has full control over all affairs of the LLC and no other individuals have a membership interest in the company.
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Multi-Member LLC Operating Agreements
Our multi-member LLC templates are meant for LLCs with more than one member. There are two types available: manager-managed and member-managed.
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Create Custom Operating Agreement
Create a custom operating agreement using our free tool. Just answer a few basic questions, and the tool will develop an operating agreement for your new LLC.
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What Is a Wisconsin LLC Operating Agreement?
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An operating agreement is a legal document that outlines the ownership structure and operating procedures of an LLC.
Whether you are starting a single-member or multi-member LLC, your operating agreement should address all of the topics below. Some of these stipulations will not have much bearing on the actual operations of a single-member LLC, but are still important to include for the sake of legal formality.
- Organization: When the LLC was officially formed, who its members are, and how ownership is divided. Multi-member LLCs may utilize an equal ownership structure or assign various members different “units” of ownership.
- Management & Voting: Whether the LLC will be managed by its members or by an appointed manager, and how members will go about voting on business matters. Typically, each member has one vote, but you may wish to give some members more voting power than others. For more information on managing your LLC, read our Member-Managed vs Manager-Managed guide.
- Capital Contributions: The amount of money each member has invested in the business. This is also where you should establish an approach to raising additional funds in the future.
- Distributions: How profits and losses will be divided among the members. The most common option is to distribute profits evenly. If you want them divided a different way, this should be detailed in your operating agreement. For more information on the basics of LLC ownership, read our Contributions and Distributions guide.
- Changes to Membership Structure: How roles and ownership will be transferred in the event that a member leaves the company. It’s essential to lay out the process for buying out and/or replacing a member in the LLC’s governing document.
- Dissolution: Dissolution: If at some point all the members of your LLC decide you no longer wish to conduct business, you should officially dissolve it. Outlining the hypothetical process of dissolving your business is an important aspect of your operating agreement. To learn how to dissolve your Wisconsin LLC, read our Wisconsin LLC Dissolution article.
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Why Should I Have a Wisconsin LLC Operating Agreement?
No matter what type of Wisconsin LLC you're starting, you'll want to create an operating agreement. Here's why:
It’s recommended by the state. According to Wisconsin Statutes, Uniform Limited Liability Company § 183.0105, all members of a Wisconsin LLC may enter into an operating agreement to regulate the internal affairs of the company.
- It'll prevent conflict among your business partners. If you're starting a multi-member LLC, having an operating agreement will prevent misunderstandings amongst your team by setting clear expectations about each partner's role and responsibilities.
- It helps preserve your limited liability status. If you're the sole owner of a single-member LLC in Wisconsin, having an operating agreement will help to ensure your limited liability status is upheld by court officials, and add to your business's credibility as a whole.
The full text of the statute can be found below:
(1) Except as otherwise provided in subs. (3) and (4), the operating agreement governs all of the following:
(a) Relations among the members as members and between the members and the limited liability company.
(b) The rights and duties under this chapter of a person in the capacity of manager.
(c) The activities and affairs of the company and the conduct of those activities and affairs.
(d) The means and conditions for amending the operating agreement.
(e) Mergers, interest exchanges, conversions, and domestications under subch. X.
(2) To the extent the operating agreement does not provide for a matter described in sub. (1), this chapter governs the matter.
(3) An operating agreement may not do any of the following:
(a) Vary the law applicable under s. 183.0104 or 183.0110.
(am) Vary the provisions of this section.
(b) Vary a limited liability company's capacity under s. 183.0109 to sue and be sued in its own name.
(c) Vary any requirement, procedure, or other provision of this chapter pertaining to any of the following:
1. Registered agents, except to require some form of vote or consent of the members notwithstanding s. 183.0116 (2).
2. The department, including provisions pertaining to records authorized or required to be delivered to the department for filing under this chapter.
(d) Vary the provisions of s. 183.0204.
(e) Alter or eliminate, or restrict the remedies for breach of, the duty of loyalty or the duty of care, except as otherwise provided in sub. (4).
(f) Eliminate, or restrict remedies for the breach of, the contractual obligation of good faith and fair dealing under s. 183.0409 (4), but a written operating agreement may prescribe the standards, if not manifestly unreasonable, by which the performance of the obligation is to be measured.
(g) Relieve or exonerate a person from liability for conduct that constitutes any of the following:
1. A willful failure to deal fairly with the company or its members in connection with a matter in which the person has a material conflict of interest.
2. A violation of the criminal law, unless the person had reasonable cause to believe that the person's conduct was lawful or no reasonable cause to believe that the person's conduct was unlawful.
3. A transaction from which the person derived an improper personal profit.
4. Willful misconduct.
(h) Vary the information required under s. 183.01075 or unreasonably restrict the duties and rights under s. 183.0410, but the operating agreement may impose reasonable restrictions on the availability and use of information obtained under that section and may define appropriate remedies, including liquidated damages and security for liquidated damages, for a breach of any reasonable restriction on use.
(i) Vary the causes of dissolution specified in s. 183.0701 (1) (d).
(j) Vary the requirement to wind up the company's activities and affairs as specified in s. 183.0702 (1), (2) (a), and (5).
(k) Unreasonably restrict the right of a member to maintain an action under subch. VIII.
(m) Vary the right of a member to approve a merger, interest exchange, conversion, or domestication under s. 183.1023 (1), 183.1033 (1), 183.1043 (1), or 183.1053 (1), except by provision in a written operating agreement that does not impair the rights of a member under s. 183.1061.
(n) Vary the required contents of a plan of merger under s. 183.1022 (1), plan of interest exchange under s. 183.1032 (1), plan of conversion under s. 183.1042 (1), or plan of domestication under s. 183.1052 (1).
(o) Except as otherwise provided in ss. 183.0106 and 183.0107 (2), restrict the rights under this chapter of a person other than a member or manager.
(4) Subject to sub. (3) (g), without limiting other terms that may be included in an operating agreement, the following rules apply:
(a) The operating agreement may do any of the following:
1. Specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may be authorized or ratified by one or more disinterested and independent persons after full disclosure of all material facts.
2. Alter the prohibition in s. 183.0405 (1) (b) so that the prohibition requires only that the company's total assets not be less than the sum of its total liabilities.
(b) To the extent a written operating agreement of a member-managed limited liability company expressly relieves a member of a responsibility that the member otherwise would have under this chapter and imposes the responsibility on one or more other members, the written operating agreement also may eliminate or limit any fiduciary duty of the member relieved of the responsibility which would have pertained to the responsibility.
(c) Except as provided in sub. (3) (g), a written operating agreement may do any of the following:
1. Alter or eliminate the aspects of, or restrict remedies with respect to, the duty of loyalty stated in s. 183.0409 (2) and (9).
2. Identify specific types or categories of activities that do not violate the duty of loyalty or the contractual obligation of good faith and fair dealing.
3. Alter the duty of care, but may not authorize conduct described in sub. (3) (g).
4. Alter or eliminate any other fiduciary duty.
(5) The court shall decide as a matter of law whether a term of an operating agreement is manifestly unreasonable under sub. (3) (f). The court shall make its determination as of the time the challenged term became part of the operating agreement and by considering only circumstances existing at that time. The court may invalidate the term only if, in light of the purposes, activities, and affairs of the limited liability company, it is readily apparent that the objective of the term is unreasonable or that the term is an unreasonable means to achieve the term's objective.
After Creating Your Wisconsin LLC Operating Agreement
Once you have finished your operating agreement, you do not need to file it with your state. Keep it for your records and give copies to the members of your LLC.
Following any major company event, such as adding or losing a member, it is a good idea to review and consider updating the operating agreement. Depending on how your operating agreement is written, it may require some or all of the members to approve an amendment to the document.
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Frequently Asked Questions
Yes. Although you won’t file this document with the state, having an operating agreement in place is the best way to maintain control of your Wisconsin LLC in the face of change or chaos.
While it's a good idea to create an operating agreement before filing your Articles of Organization, the state does not discourage LLCs from waiting until the formation process is complete. It's worth noting that some banks require you to submit an operating agreement in order to open a business bank account.
No. Operating agreements are to be retained by the LLC members. There is no need to submit this document to the WI Department of Financial Institutions.