Changes for Wisconsin LLCs

by Marv Ripp, State Underwriting Counsel

Effective January 1, 2023, there was a new law regarding business entities. This law has a few changes, primarily regarding Limited Liability Companies (LLCs).

Operating Agreements

Operating agreements are not required as a condition to articles being filed with DFI. Of course, you should still set out a requirement, on sch B-1, for an operating agreement; but be aware that none is required. If there is only one member, we can use an affidavit as to just one member, especially for purchase mortgages. For refinances and sales, see who signed past mortgages for the LLC as a check against someone claiming to be the sole member.

Multiple LLC Members

If more than one member of the LLC and no operating agreement, then all members must sign if conveying all of the property. If not all of the LLC property, then a majority of membership owners must sign and represent a majority of ownership interest.

Statement of Authority

A Statement of Authority as to who can sign can be filed with the DFI. It is not required that such a statement be filed, but if it is and a certified copy is recorded at the Register of Deeds, then we can rely on it (unless we get conflicting information) for five (5) years from the date of DFI filing. It may be the exception rather than the rule that these statements will be kept current! There is probably not much chance you will recieve Statements of Authority on most files. A new filing can amend or cancel the Statement of Authority. Of course, it might be hard to find these Statements or changes to them in a tract search. It remains to be seen how effective and utilized this new law will be.