Wisconsin Business Law Blog : Waukesha, New Berlin, Oconomowoc Corporate & Real Estate Lawyer & Attorney

According to Section 19.36(3) of the Wisconsin Statutes, the records of those entering into contracts with government constitute public records, and therefore open to public inspection upon request, subject to specific exemptions set forth in the law.  As governments generally, and particularly local governments, look more and more to private contractors to perform or assist in performing public services, businesses that enter into such agreements must be aware of the ramifications of this statute.

This statute has not been construed to apply to any record of a public contractor, but rather to records which are specifically related to performance of the contract.  As those records are deemed public records, they should not be destroyed except in accordance with the law (normally, public records are to be retained at least 7 years).  Also, since such records are, in effect, presumptively open for inspection by the public, businesses which contract with government must understand that a public records request applicable to such records may be used as an informal discovery device by parties seeking to make a claim against the business or the government.

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Similar to the required practices of maintaining a Corporation, it is a good idea to keep the important documents and minutes recording important transactions and happenings of an LLC in a minute book, to be maintained at the main business office and at the office of your attorney who can then remind you to annually file your annual report and update your minutes.  

Statutory requirements for Wisconsin LLC's are less than that of a Wisconsin corporation. However, it is important to note that pursuant to Wisconsin Statutes, a LLC is required to file an annual report, keep certain written records, including copies of the LLC's tax returns, records of the LLC members, the value of each member's contributions to the LLC, records of the times at which, or the events upon which, any additional contributions are agreed to be made by each member.

The minute book would be an appropriate place to keep much of this information. In addition, even though "formalities" such as annual meetings are not required of LLC's, following such formalities can be important to help protect the limited liability benefits provided by the LLC law in Wisconsin.   For example, maintaining an LLC minute book is one of the things you can do to help ensure that the "limited liability veil" is not pierced. When the courts "pierce the limited liability veil", they assign liability to individuals for actions that the limited liability company performed. It is not uncommon for plaintiffs to name individuals associated with a corporation or LLC as defendants in any litigation against a LLC or corporation.

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A common, but important, mistake that business owners make when selling their business is failing to adequately investigate what their and their spouse's health coverage will be after the sale of the business.  Obviously, many prior owners will sell their business before they are eligible for Medicare leaving them facing the high costs of obtaining private individual insurance if their spouse is not covered under another group plan.

Commonly, as a potential solution, the prior owners will negotiate to stay on with the new owners as consultants under a consulting agreement or as employees under an employment agreement with the proviso that they be added to the new owner's group health plan until the prior owners are eligible for Medicare or some other pre-negotiated timeframe. 

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Think first before getting into an LLC. While the LLC has become the entity of choice, there are plenty of reasons to avoid them and consider the use of other forms within which to operate. This article will expose and arm you with the 10 best reasons for you to consider avoiding LLC’s.

1. LLC's are not unique. When LLC’s first came into vogue about 20 years ago, everyone – attorneys, accountants, bankers, insurance experts – all said that LLC’s would change the business world. In those 20 years I have attended dozens of business seminars related to the type of entity within which to do business. I’ve asked the experts what you can do with an LLC that you couldn’t have done with the already existing entities, such as an S corporation. I have never gotten a good answer

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The Wisconsin Supreme Court in the case of Walgreens v. City of Madison ruled that in assessing the value of leased commercial property, an assessor must take into account the actual rent and terms of a lease applicable to the property in determining its value under the income approach.  The lease is question in that case imposed rents significantly below market rates, and the City of Madison had argued that market rates were to be used in assessing the property.  The Budget Bill as adopted by the legislature would have in effect "reversed" the Wisconsin Supreme Court's decision, making market rental rates applicable.

Governor Doyle has used his veto power to veto this portion of the Budget Bill.  Therefore, the court's decision will stand.  This will allow lessors and lessees of property to structure creative lease arrangements without fear that the lease terms will be disregarded in determining the  property's assessed value and, therefore, the property tax to be imposed.

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