How To Start an LLC in Wisconsin? (In 4 Simple Steps)
The State of Wisconsin has specific requirements for the formation of an LLC. To complete the registration process, you will need to file several documents before your business can be recognized as a limited liability company (LLC).
With over a decade of practice as a business consultant for limited liability companies, I’ll provide information about what it takes to create an LLC in Wisconsin and how you can go about doing it successfully.
The article is backed with in-depth research and legal advice from our panel of lawyers to provide you with all the information you need.
Quick Summary
- To start a Wisconsin LLC, apply for a business name, appoint a registered agent, create an operating agreement, and submit all necessary documents.
- Once registered, obtain an EIN, open a business bank account, and acquire licenses and permits.
- The advantages of forming a Wisconsin LLC include personal asset protection, limited personal liability, and cost-effectivity.
How to Form an LLC in Wisconsin?
To form an LLC in Wisconsin, you must apply for a business name, appoint a registered agent, file the Articles of Organization, and draft an operating agreement.
LLC's formation documents are extremely important, so make sure you do everything by the books before submitting them to the Financial Institutions Department.
Step 1: Apply for a Business Name
The first step is applying for a business name through the Department of Financial Institutions Division of Corporate & Consumer Services.
You can look up an LLC in Wisconsin by checking the business name on the Wisconsin Secretary of State Business Search [1]. If it is available, you can file a reservation with the Department of Financial Institutions.
You may reserve a business name for 120 days at a $15 filing fee payable to the Financial Institutions Department.
Expedited processing is also available at an additional $25 filing fee. Keep in mind that you can only make name reservations by mail.
You need to follow certain guidelines for your name to be approved and registered:
- Your LLC name has to end with "Limited Liability Company" or the abbreviations "L.L.C" or "LLC."
- Your business name should be distinguishable from other registered companies [2].
- You cannot include words that are associated with any government agency.
- If the name contains professional services restricted by law, additional licenses may be required.
If you need to rename your LLC, read our article for more information on how to change an LLC name in Wisconsin.
Step 2: Appoint a Registered Agent
An LLC registered agent, or registered agent service, represents a Wisconsin LLC.
The registered agent in Wisconsin maintains a physical address to conduct service of process on behalf of the LLC.
The individual must be available during business hours to ensure receipt of official paperwork, legal documents, and filing Wisconsin annual reports.
Keep in mind that these filings are legally binding contracts once accepted by your company's representative on record. Any official paperwork can be received and presented according to statutory deadlines, such as the operating agreement.
It is essential to have a reliable registered agent with a physical address within the state to meet legal requirements.
Foreign and domestic LLCs must have a registered agent within the state.
Step 3: File Wisconsin LLC Articles of Organization
To make your LLC official, you will have to file LLC Articles of Organization with the Wisconsin Department of Financial Institutions. You can file online or directly.
Your articles must include:
- Your name and address (physical)
- The street number and entity name where you will be conducting business
- A description and purpose of the business needs to match the type on file with the county clerk's office in Wisconsin.
- Names and addresses of all members
The online filing fee for Wisconsin Articles of Organization is $130. If you choose to mail your Articles of Organization, the fee is $170.
You may speed up the processing of your Articles of Organization for an additional $25 expedited service fee.
Step 4: Make a Wisconsin LLC Operating Agreement
An LLC operating agreement is a document that defines the organizational operating structure of your LLC and outlines how business decisions are made.
More specifically, the operating agreement includes the following (but not limited to):
- Management of the company
- Members and their contribution
- Voting rights, responsibilities, and ownership percentages
- Profit and liability distribution
- Procedures for incoming and outgoing members
- Purpose and duration
- Articles of organization
- Dissolution clause
Seek professional assistance from a Wisconsin business attorney or legal specialist for drafting the agreement.
While not required by law, having an operating agreement is highly recommended to provide rules and procedures that all LLC managers and members have to abide by.
You can also read our article for more information on how to renegotiate a Wisconsin LLC operating agreement.
What to Do When You Form a Wisconsin LLC?
When you form a Wisconsin LLC, you need to make sure it stays compliant with the state by opening an LLC business bank account, obtaining an EIN, and acquiring necessary licenses.
1. Opening a Business Bank Account
If you're opening a limited liability company in Wisconsin, make sure the business bank account is separate from your assets to maintain limited liability protection.
A separate account allows you to keep track of all cash flow within the company.
LLCs must obtain an Employer Identification Number (EIN) from the Internal Revenue Service before establishing accounts under their company name with banks.
If you operate several distinct LLCs underneath the same LLC umbrella, make sure each has its own EIN rather than using a single number for all of your companies.
2. Obtaining Employer Identification Number
EINs are obtained through the federal government.
The paperwork needed to set up an LLC is done with your Secretary of State, but that federal ID number can be used across state lines for things like opening a business bank account and filing taxes in other states.
Every business must have a Federal Employer Identification Number (EIN) if it has employees or operates as a corporation, partnership, or trust.
An LLC can get an EIN the moment it files its Articles of Organization with the Secretary of State.
You can obtain an EIN online or by mail through the IRS website. There is no cost to using this service.
3. Obtaining Business Licenses and Permits
A business license is generally required to operate a firm on federal, state, and local levels.
The type of industry and nature of the business determines the licensing needs.
A general commercial permit will allow most businesses to operate legally, but licenses are required to provide professional services in Wisconsin, such as general contracting, general law, medical care, or legal advice.
Businesses must obtain local licenses from their city or county of operations if the locality requires one.
For federal licensing requirements, you may learn more about licensing regulations by visiting the Small Business Administration's website or calling the Department of Safety and Professional Services to inquire about the state business licenses.
What Are The Advantages Of Wisconsin LLCs?
The advantages of Wisconsin LLCs include personal asset protection, limited personal liability, and cost-effectiveness.
1. Personal Asset Protection
When you start an LLC in Wisconsin, your personal assets are separated from the business finances. This means that in case of lawsuits or debts, your personal bank accounts and property owned before forming the LLC remain protected and won't be used to pay off business-related liabilities.
2. Limited Personal Liability
Operating under a Wisconsin LLC structure minimizes personal liability risks. You can add or remove business partners without affecting the personal assets of other LLC members, providing flexibility for business growth.
3. Cost-Effective
Incorporating in Wisconsin is financially advantageous due to the low startup costs for forming an LLC in the state, making it an attractive option for new businesses.
Wisconsin LLC Taxes
A Wisconsin LLC default tax status is a pass-through entity. This means that income or loss from the LLC passes through to its members' personal taxes.
They are taxed at the same rate as individuals but can reduce taxation by filing deductions for expenses incurred during the year from operations, such as wages paid out to staff members or purchases of equipment used in production processes.
The default tax status for a Wisconsin LLC is that it will be treated as a sole proprietorship (for single-member business entities) or a partnership (in the case of a multi-member LLC).
If taxed like a corporation, earnings would be subject to double taxation: once at the business level and again on individual returns when distributed as dividends.
If you operate a Wisconsin LLC with staff, you must report to the Wisconsin Department of Workforce Development on Unemployment Insurance Tax and Employee Withholding Tax.
Related Articles:
- How to Cancel an LLC in Wisconsin
- Premium LLC Formation Services in Wisconsin
- How Long Does It Take to Start an LLC in Wisconsin
Wisconsin LLC FAQs
Can I Form a Foreign LLC in Wisconsin?
You can form a foreign LLC in Wisconsin by filing a Wisconsin Certificate of Registration Application with the Department of Financial Institutions online, in person, or by mail.
Do I Need Business Insurance for Wisconsin LLC?
You may need business insurance for your Wisconsin LLC, depending on the industry of your business.
Generally, LLCs with employees will need to carry workers' compensation insurance, while LLCs with no employees will need to have a general liability policy.
How Do I Find a Registered Agent in Wisconsin?
You can find a registered agent in Wisconsin by using the state's online system. The Wisconsin Department of Financial Institutions (DFI) website provides an agent search page where you can find registered agent information by name or city.
How Do I Add a DBA to an LLC in Wisconsin?
You can add a DBA to an LLC in Wisconsin by filling out a DBA application form, notarizing it, and submitting it to the Wisconsin Department of Financial Institutions along with the filing fee.
Does Wisconsin Allow LLC Domestication?
Wisconsin allows LLC domestication if you file a Certificate of Conversion with the Wisconsin Department of Financial Institutions.
How Do I Check the Status of My Wisconsin LLC?
You can check the status of your Wisconsin LLC by visiting the Secretary of State website and performing a search by business name, entity number, or filing date.
Starting a Wisconsin LLC
Starting a Wisconsin LLC involves a step-by-step process and legal requirements that should be complied with.
You'll need to do some research and have the option to seek legal advice by hiring a service provider, such as ZenBusiness to launch the business on your behalf and ensure legal compliance.
They can be your very own registered agent, which ensures you're compliant with Wisconsin laws.
References:
- https://www.wdfi.org/apps/corpsearch/search.aspx
- https://dfi.wi.gov/Documents/BusinessServices/BusinessEntities/Forms/CORP1.pdf
