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Wisconsin Single-Member LLC Operating Agreement

Create a Wisconsin single-member LLC operating agreement with state-specific guidance on Chapter 183 defaults, fees, and liability protection.

Introduction

A single-member LLC operating agreement is the internal document where you, as the sole owner of a Wisconsin LLC, set the rules for how your business runs, how distributions are shared, and what happens if you close the business later. Wisconsin does not require an operating agreement to be in writing, even for a single member, and oral or implied terms are legally valid, but a written agreement is required to change the duty of loyalty or duty of care you would otherwise owe the LLC. It is the clearest evidence, if a court or the IRS ever asks, that you are running a real business, not just using the LLC as a personal wallet.

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Key Things to Know

  1. 1

    Written form is not required for a Wisconsin operating agreement, even for a single member; oral or implied terms are legally valid (Wis. Stat. Section 183.0102). A written agreement is required only to change the duty of loyalty or duty of care (Section 183.0409, Section 183.0105(4)).

  2. 2

    Without an operating agreement, Wisconsin law shares distributions among members based on the value of each member's contributions, not split evenly (Wis. Stat. Section 183.0404).

  3. 3

    An LLC is member-managed by default. Switching to manager-managed requires a written operating agreement that says so; an oral understanding to that effect is not enough (Wis. Stat. Section 183.0407).

  4. 4

    A charging order is the exclusive remedy for a member's personal creditors against that member's LLC interest (Wis. Stat. Section 183.0503). If a court forecloses that lien against a sole member, the purchaser becomes a member and takes the member's entire interest, not just the economic share.

  5. 5

    Wisconsin has no franchise tax or minimum annual entity-level tax on an LLC. The recurring state obligation is a $25 Annual Report filed online with the Department of Financial Institutions each year.

  6. 6

    The operating agreement itself is not filed with the state. You form the LLC by filing Articles of Organization ($130 online, $170 by mail) with the Wisconsin Department of Financial Institutions.

  7. 7

    Even a written operating agreement cannot excuse a member or manager from a willful failure to deal fairly in a conflict of interest, a criminal law violation, an improper personal profit, or willful misconduct (Wis. Stat. Section 183.0105(3)(g)).

Key decisions before you file

Before you file a LLC Operating Agreement in Wisconsin, a few decisions shape the document: which option to choose and what each one means. The LLC Operating Agreement guide walks through them.

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Wisconsin-Specific Provisions

Use this together with the complete LLC operating agreement template, which covers the standard provisions your agreement also needs: capital contributions, management structure, meetings, transfers, withdrawal, and dissolution. The sections below cover only what is specific to Wisconsin law.

1. Governing Law

This Agreement is governed by the laws of the State of Wisconsin, including the Wisconsin Uniform Limited Liability Company Law, Wisconsin Statutes Chapter 183.

2. Allocation of Distributions

Unless otherwise stated elsewhere in this Agreement, distributions made by the Company before dissolution shall be shared among the Members in proportion to the value of each Member's contributions, as stated in the Company's required records, as provided by Wis. Stat. Section 183.0404 absent a contrary agreement.

3. Fiduciary Duties

The Member or Manager, as applicable, owes the Company the duties of loyalty and care under Wis. Stat. Section 183.0409. This Agreement may restrict remedies for breach of loyalty, identify activities that do not violate loyalty or the obligation of good faith and fair dealing, and alter the duty of care, only because these changes are set forth in this written Agreement, as required by Section 183.0105(4). No provision of this Agreement excuses a willful failure to deal fairly in a matter involving a material conflict of interest, a criminal law violation, an improper personal profit, or willful misconduct, as provided by Section 183.0105(3)(g).

4. Charging Order; Foreclosure Against Sole Member

A charging order is the exclusive remedy by which a judgment creditor of a Member may satisfy a judgment from the Member's interest, as provided by Section 183.0503. If the Company has only one Member and a court forecloses a charging order lien against that interest, the purchaser obtains the Member's entire interest, becomes a Member, and the former Member is dissociated, as provided by Section 183.0503(6).

5. Indemnification

The Company may reimburse, indemnify, advance expenses to, and insure a Member or Manager as set forth in the complete template, consistent with Section 183.0408, except for conduct excluded from exoneration under Section 183.0105(3)(g).

6. Execution

This Agreement is effective as of the date signed below. Wisconsin law does not require an LLC operating agreement to be notarized or witnessed to be valid. The provisions of Section 3 above are effective only because they are set forth in this written, signed Agreement.

[MEMBER] Signature: _____________________ Date: _____________

Printed Name: _____________________

Wisconsin Requirements for LLC Operating Agreement

Operating Agreement Authority (Wis. Stat. § 183.0105)

The Operating Agreement governs the relations among the Members and between the Members and the LLC, and the rights and duties of a person acting as a Manager. It may not vary the LLC's capacity to sue and be sued, requirements involving the Department of Financial Institutions or registered agents, or the choice of Wisconsin law, and it may not alter or eliminate, or restrict the remedies for breach of, the duty of loyalty or the duty of care except as specifically permitted in a written agreement (Wis. Stat. Section 183.0105). Where the Agreement is silent, the Wisconsin LLC Act supplies the default rule.

Limited Liability Protection (Wis. Stat. § 183.0304)

A debt, obligation, or other liability of the LLC is solely the LLC's, and a member or manager is not personally liable for it solely by reason of being or acting as a member or manager (Wis. Stat. Section 183.0304(1)), subject to the liability-for-contributions and improper-distribution rules in Sections 183.0403 and 183.0406. The LLC's failure to observe formalities relating to its powers or management is not, by itself, a ground for imposing personal liability on a member or manager (Section 183.0304(2)).

Management Structure (Wis. Stat. § 183.0407)

A Wisconsin LLC is member-managed by default. It becomes manager-managed only if a WRITTEN operating agreement states the company is or will be "manager-managed," "managed by managers," or that management is or will be "vested in managers" -- an oral or implied understanding to that effect is not enough. In a member-managed LLC, ordinary-course matters are decided by a majority of the members; in a manager-managed LLC, ordinary matters are decided by the manager, or a majority of managers if more than one (Wis. Stat. Section 183.0407).

Fiduciary Duties (Wis. Stat. § 183.0409, § 183.0105(3)(g))

Members (in a member-managed LLC) or managers (in a manager-managed LLC) owe the duty of loyalty and duty of care under Wis. Stat. Section 183.0409. A WRITTEN operating agreement may restrict remedies for breach of the duty of loyalty, identify activities that do not violate loyalty or the obligation of good faith and fair dealing, and alter the duty of care (Section 183.0105(4)). No operating agreement, written or otherwise, may excuse a willful failure to deal fairly in a matter involving a material conflict of interest, a criminal law violation, an improper personal profit, or willful misconduct (Section 183.0105(3)(g)).

Voting Rights (Wis. Stat. § 183.0407)

In a member-managed LLC, a matter in the ordinary course of the LLC's activities may be decided by a majority of the members; a matter outside the ordinary course, such as selling substantially all of the LLC's property, requires the affirmative vote or consent of all members (Wis. Stat. Section 183.0407). Amending the operating agreement itself always requires the consent of all members, regardless of any lower threshold set for other decisions.

Capital Contributions (Wis. Stat. § 183.0402, § 183.0403)

A member's contribution may take any form the operating agreement permits, including cash, property, services, or a promissory note (Wis. Stat. Section 183.0402). A member who fails to make a promised contribution remains liable to the LLC for the value of the unmade contribution, regardless of the member's inability to perform, unless the operating agreement provides otherwise (Section 183.0403).

Allocation of Profits and Losses (Wis. Stat. § 183.0404)

Unless the operating agreement provides otherwise, distributions made by the LLC before dissolution are shared among the members in proportion to the value of each member's contributions, as stated in the LLC's required records, not split evenly among members (Wis. Stat. Section 183.0404(1)). The Operating Agreement can set a different split.

Distributions (Wis. Stat. § 183.0405)

A Wisconsin LLC may not make a distribution if, after giving it effect, the LLC would be unable to pay its debts as they become due in the ordinary course of its activities, or the LLC's total assets would be less than or equal to its total liabilities plus the amount needed to satisfy members' and transferees' preferential rights on a hypothetical dissolution (Wis. Stat. Section 183.0405).

Transfer of Membership Interests (Wis. Stat. § 183.0501, § 183.0502)

A member's transferable interest, the right to receive distributions, may be transferred in whole or in part (Wis. Stat. Sections 183.0501, 183.0502). Unless the Operating Agreement or the other members provide otherwise, a transferee does not become a member, gains no right to participate in management, and receives only the distributions the transferor would have received.

Withdrawal or Dissociation of Members (Wis. Stat. § 183.0601, § 183.0602)

A member may dissociate from a Wisconsin LLC at any time, rightfully or wrongfully (Wis. Stat. Section 183.0601). Dissociation also occurs on events including the member's expulsion under the operating agreement, a foreclosure sale of the member's entire interest, or unanimous expulsion for unlawfulness of continued membership (Section 183.0602). The Operating Agreement should state any buyout terms; Wisconsin's default rules do not guarantee a departing member an automatic payout.

Dissolution and Winding Up (Wis. Stat. § 183.0701, § 183.0702)

A Wisconsin LLC dissolves upon the first to occur of an event stated in the operating agreement, the consent of all members, or an event listed in Wis. Stat. Section 183.0701 (including judicial or administrative dissolution). Once dissolved, the LLC continues only to wind up its business under Section 183.0702, and the Operating Agreement should name who is responsible for winding up.

Records and Accounting (Wis. Stat. § 183.0410)

A member may, on reasonable notice, inspect and copy during regular business hours any LLC record material to the member's rights and duties, and the LLC must furnish without demand any information it knows to be material to a member's proper exercise of those rights (Wis. Stat. Section 183.0410). A member may also make a written demand for specific information; the LLC must respond, in a record, within 10 days of receiving the demand.

Amendment Procedures (Wis. Stat. § 183.0407(2)(e))

The operating agreement may be amended only with the consent of all members (Wis. Stat. Section 183.0407(2)(e)). Wisconsin's LLC Act does not set a lower default amendment-voting threshold; unanimous consent applies unless the Agreement itself changes that rule for future amendments.

Indemnification and Advancement (Wis. Stat. § 183.0408)

The LLC shall reimburse a member or manager for payments made, and shall indemnify and hold a member or manager harmless from a claim or liability, arising from that person's status as a member or manager, so long as the conduct did not breach the duty of care or standards of conduct. The LLC may also advance reasonable expenses and purchase liability insurance (Wis. Stat. Section 183.0408). No indemnification may cover conduct excluded from exoneration under Section 183.0105(3)(g).

Frequently Asked Questions

It's the internal document where a Wisconsin LLC's sole owner sets the rules for running the business and sharing distributions. Wisconsin doesn't require it to be written, oral or implied terms are legally valid, but writing it down is the clearest proof the LLC is a real business, not just a personal wallet.

Not by blanket legal requirement. Wisconsin allows an oral or implied operating agreement, even for a sole member (Wis. Stat. Section 183.0102). But without a written one, state default rules fill every gap automatically, and you cannot change your own duty of loyalty or duty of care without a written agreement.

Wisconsin's default LLC rules fill the gap. Distributions are shared among members based on the value of each member's contributions rather than however you'd choose to split them, which matters most once you bring on a second member and haven't defined your own split (Wis. Stat. Section 183.0404).

It supports that protection. Wisconsin law makes a charging order the exclusive remedy for a member's personal creditors against that member's LLC interest (Wis. Stat. Section 183.0503). No Wisconsin case addressing an alter-ego exception to that exclusivity for LLCs was found, but keeping finances separate still matters.

Wisconsin LLCs owe no franchise tax or minimum annual entity-level tax. The recurring state obligation is a $25 Annual Report filed online with the Department of Financial Institutions each year, due in the calendar quarter containing your LLC's formation anniversary.

No. You file Articles of Organization ($130 online, $170 by mail) with the Wisconsin Department of Financial Institutions to form the LLC, but the operating agreement itself is an internal document. You keep it with your own business records; it's never submitted to the state.

Broadly yes, but only in writing. A written operating agreement can restrict remedies for breach of the duty of loyalty and alter the duty of care (Wis. Stat. Section 183.0105, Section 183.0409). It can never excuse a willful failure to deal fairly in a conflict of interest, a criminal law violation, improper personal profit, or willful misconduct.