183.0402 Duties of managers and members. Unless otherwise provided in an operating agreement:
(1) No member or manager shall act or fail to act in a manner that constitutes any of the following:
(a) A willful failure to deal fairly with the limited liability company or its members in connection with a matter in which the member or manager has a material conflict of interest.
(b) A violation of criminal law, unless the member or manager had reasonable cause to believe that the person's conduct was lawful or no reasonable cause to believe that the conduct was unlawful.
(c) A transaction from which the member or manager derived an improper personal profit.
(d) Willful misconduct.
(2) Every member and manager shall account to the limited liability company and hold as trustee for it any improper personal profit derived by that member or manager without the consent of a majority of the disinterested members or managers, or other persons participating in the management of the limited liability company, from any of the following:
(a) A transaction connected with the organization, conduct or winding up of the limited liability company.
(b) A use by a member or manager of the property of a limited liability company, including confidential or proprietary information or other matters entrusted to the person as a result of the person's status as member or manager.
(3) An operating agreement may impose duties on its members and managers that are in addition to those provided under sub. (1).
History: 1993 a. 112; 1995 a. 400.
Reading ss. 183.0402 and 183.0404 together, members with a material conflict of interest are not prevented from voting their ownership interest with respect to a given matter. Rather, they are prohibited from acting in a manner that constitutes a willful failure to deal fairly with the LLC or its other members by willfully acting, or failing to act, in a manner that will have the effect of injuring the LLC or its other members. Gottsacker v. Monnier, 2005 WI 69, 281 Wis. 2d 361, 697 N.W.2d 436, 03-0457.
The First LLC Case. Boucher & Kamperschroer. Wis. Law. Sept. 2005.
Fiduciary Duties of LLC Members and Managers. Boucher and Kramer. Wis. Law. Jan. 2018.
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