Wisconsin Non-Profit Corporation-Issued Securities
Non-Profit Wisconsin Corporation-Issued Securities

Statute: § 551.22(8), Wis. Stats.

Used for: Securities issued by a domestic (Wisconsin) non-profit corporation to its members, and, under certain conditions, to non-members. The corporation must be organized exclusively for religious, educational, benevolent, charitable, fraternal, social, athletic, or reformatory purposes.

Filing requirement:

• For offers to non-members: Notice Filing, as set forth at §§ DFI-Sec 2.01(4)(a) and 2.03, Wis. Adm. Code.

• Filing fee: $200, as set forth at § DFI-Sec 7.01(2)(b), Wis. Adm. Code made payable to Wisconsin DFI-Division of Securities.
• Form required: There is no required form. File a cover letter (including the fee) at least ten days prior to the offering in this state, referencing the statute or rule section under which the notice is being made.
• Exhibits required: A copy of the prospectus, offering document, trust indenture, all other material to be delivered to offerees in connection with the transaction, and all other information the Division may require after the filing. If advertising is published or circulated in connection with the transactions or the securities underlying the transactions for which this exemption is claimed, it must be filed with the Division and may not be used unless and until the Division has allowed its use, unless exempt from this requirement under § DFI-Sec 7.02(1), Wis. Adm. Code.
• Review time: Ten calendar days, unless extended pursuant to § DFI-Sec 2.03(2), Wis. Adm. Code.

• For offers to members: Self-Executing. No filing or Consent to Service of Process is necessary in order to claim this exemption.

Administrative Code references: §§ DFI-Sec 2.01(4)(a)-(b), 3.03(4)(h)-(i), 3.04, and 7.06, Wis. Adm. Code.

NASAA Guidelines: See § DFI-Sec 3.03(4)(h) and (i), Wis. Adm. Code. Note: Only the disclosure provisions of the guidelines may be applied.

Frequently asked questions:

Q: Is the exemption self-executing?

    A: Yes. But, only for offers to members. For offers to non-members, notice filing  is required.

Q: Is this exemption available to non-profit corporations organized under the laws of states other than Wisconsin?

    A. No. This exemption is available only for a "domestic" (Wisconsin) corporation. Non-Wisconsin not-for-profit corporations may wish to examine the exemption set forth at § 551.23(15), Wis. Stats., and § DFI-Sec 2.02(8), Wis. Adm. Code.

Important interpretive letters:

6/10/83 letter re: Reformed Church in America-Extension Foundation. The non-profit corporation must be a domestic (i.e. Wisconsin) corporation. For transactions involving the securities of non-Wisconsin corporations, see the exemption set forth in § 551.23(15), Wis. Stats.

1/23/80 letter re: Theta Xi Chapter of Delta Sigma Pi. A limited partnership organized by a non-profit corporation as general partner could not use the exemption because the "issuer" of the securities was to be the partnership, not the Corporation. In addition, issuance to persons who would become "honorary members" of the non-profit corporation through the purchase of the securities would not qualify for the exemption, because § DFI-Sec 2.01(4)(b), Wis. Adm. Code, explicitly sets forth that a person cannot become a "member" for purposes of the exemption solely by purchasing the issuer's securities.

Letters regarding the definition of "member" in § DFI-Sec 2.01(4)(b), Wis. Adm. Code, for purposes of this exemption:

8/26/93 letter re: WELS Church Extension Fund, Inc. ("WELC CEF"). Staff took a no-action position with regard to the sale of WELS CEF notes to its member congregations, as well as to the members of those member congregations.

5/13/86 letter re: Unity of Madison, Inc. Issuance of Unity's bonds to its corporate as well as its congregational/non-corporate members was exempt from registration under § 551.22(8), Wis. Stats.

6/28/85 letter re: Pine Haven Christian Home. Issuance of the promissory notes of Pine Haven to members of the constituent churches of Pine Haven was exempt from registration under § 551.22(8), Wis. Stats.

11/16/82 letter re: Catholic Diocese of Green Bay. Issuance of bonds to members of the constituent parishes of the Diocese was exempt from registration under § 551.22(8), Wis. Stats.

5/20/81 letter re: Lutheran High School Association of the Greater Sheboygan Area, Inc. Issuance of promissory notes to members of the Association, as well as to members of the Association's member congregations, was exempt from registration under § 551.22(8), Wis. Stats.

7/14/77 letter re: Wisconsin Lutheran College Conference, Inc. Issuance of securities to members of the Conference, as well as to the members of the congregations of the Conference, was exempt from registration under § 551.22(8), Wis. Stats.

History:  Adopted on January 1, 1970. Is substantially similar to Uniform Securities Act section 402(a)(9). Differs from Uniform Act in that sales of evidences of debt to non-members requires prior filing with the Division under § DFI-Sec 2.01(4), Wis. Adm. Code. Has not changed since its adoption in Wisconsin.

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