178.0105 Partnership agreement; scope, function, and limitations.
(1) Except as otherwise provided in subs. (3) and (4), the partnership agreement governs all of the following:
(a) Relations among the partners as partners and between the partners and the partnership.
(b) The business of the partnership and the conduct of that business.
(c) The means and conditions for amending the partnership agreement.
(d) Mergers, interest exchanges, conversions, and domestications under subch. XI.
(2) To the extent the partnership agreement does not provide for a matter described in sub. (1), this chapter governs the matter.
(3) A partnership agreement may not do any of the following:
(a) Vary the law applicable under ss. 178.0104 (1) and 178.0110.
(b) Vary the provisions of this section.
(c) Vary the provisions of s. 178.0307.
(d) Unreasonably restrict the duties and rights under s. 178.0408, but the partnership agreement may impose reasonable restrictions on the availability and use of information obtained under that section and may define appropriate remedies, including liquidated damages, for a breach of any reasonable restriction on use.
(e) Alter or eliminate, or restrict remedies for the 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. 178.0409 (4), but the partnership agreement may prescribe the standards, if not manifestly unreasonable, by which the performance of the obligation is to be measured.
(g) Unreasonably restrict the right of a person to maintain an action under s. 178.0410 (2).
(h) Relieve or exonerate a person from liability for conduct that constitutes any of the following:
1. A willful failure to deal fairly with the partnership or its partners in connection with a matter in which the partner has a material conflict of interest.
2. A violation of the criminal law, unless the partner had reasonable cause to believe that the partner's conduct was lawful or no reasonable cause to believe that the partner's conduct was unlawful.
3. A transaction from which the partner derived an improper personal profit.
4. Willful misconduct.
(i) Unless the partnership is a limited liability partnership, vary the power of a person to dissociate as a partner under s. 178.0602 (1), except to require that the notice under s. 178.0601 (1) be in a record and to not unreasonably specify how the notice must be given.
(j) Vary the grounds for expulsion specified in s. 178.0601 (5).
(k) Vary the causes of dissolution specified in s. 178.0801 (4) or (5).
(L) Vary the requirement to wind up the partnership's business as specified in s. 178.0802 (1), (2) (a), and (4).
(m) Vary the right of a partner under s. 178.0901 (6) to vote on or consent to a cancellation of a statement of qualification.
(n) Vary the right of a partner to approve a merger, interest exchange, conversion, or domestication under s. 178.1123 (1), 178.1133 (1), 178.1143 (1), or 178.1153 (1), except by written provision in the partnership agreement that does not impair the rights of a partner under s. 178.1161.
(o) Vary the required contents of a plan of merger under s. 178.1122, plan of interest exchange under s. 178.1132, plan of conversion under s. 178.1142, or plan of domestication under s. 178.1152.
(p) 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 partners notwithstanding s. 178.0909 (2).
2. The department, including provisions pertaining to records authorized or required to be delivered to the department for filing under this chapter.
(q) Except as otherwise provided in ss. 178.0106 and 178.0107 (2), restrict the rights under this chapter of a person other than a partner.
(4) Subject to sub. (3) (h), without limiting other terms that may be included in a partnership agreement, the following rules apply:
(a) The partnership 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. 178.0406 (1) (b) so that the prohibition requires only that the partnership's total assets not be less than the sum of its total liabilities.
(b) To the extent the partnership agreement expressly relieves a partner of a responsibility that the partner would otherwise have under this chapter and imposes the responsibility on one or more other partners, the agreement also may eliminate or limit any fiduciary duty of the partner relieved of the responsibility which would have pertained to the responsibility.
(c) Except as provided in sub. (3) (h), if not manifestly unreasonable, the partnership 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. 178.0409 (2).
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.
4. Alter or eliminate any other fiduciary duty.
(5) The court shall decide as a matter of law whether a term of a partnership agreement is manifestly unreasonable under sub. (3) (f) or (4) (c). The court shall make its determination as of the time the challenged term became part of the partnership agreement and by considering only circumstances existing at that time. The court may invalidate the term only if, in light of the purposes and business of the partnership, 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.
History: 2015 a. 295.