How to Start an LLC in Wisconsin
Wisconsin is home to 460,000+ small businesses. The Badger State is known for large tax incentives to keep work in the state, great infrastructure for transportation, many supportive agencies, and a long history of manufacturing. For those who choose to take advantage of the state’s thriving economy, an LLC is often the business structure they choose. Not only does an LLC offer personal asset protection and tax benefits, but it is also easy to form one through Wisconsin’s processes – just follow this step-by-step guide.
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Some of the hardest work when it comes to starting a business is in preparation. Once you have crafted business plans, raised funds, and are ready to take the plunge, there are formalities you’ll need to complete. Registering your business as an LLC with the state of Wisconsin is one of the first things you need to do – luckily, the process is simple if you follow the steps below.
Name your LLC
Have a name in mind? See if it’s already listed in the state’s business directory. If the name comes up in a search, it’s taken. If it doesn’t, it’s yours to claim.
Most LLCs operate under the same name that they are registered with, which means that you will need to decide your business’s legal name early on. This will include not only considerations of Wisconsin’s naming rules, but the best name for your marketing efforts and online presence.
Naming rules in Wisconsin
In Wisconsin, each business entity must have a name that is completely unique and distinguishable from all other business names. Since all business names are public records, you can search the state’s database to check on name availability. Run the name search before you move on.
Additional naming guidelines for Wisconsin include:
- Must include a designator, like the words “limited liability company” or an abbreviation.
- Cannot include words used to name a government agency, like Treasury or FBI.
- Cannot use restricted words (like bank or university) without the proper licensure and documentation.
- Cannot imply the business was formed for an unlawful purpose.
- Cannot imply the business was formed for a purpose other than its stated purpose. For example, you cannot open a hardware store called “Sally’s Hair Salon.”
- Cannot contain obscenities.
Once you have chosen a name, it is important to make sure you claim it so that it is not taken by another business. This is automatically done when you form your LLC, but if you aren’t ready to take that step, you can also reserve the name for 120 days. There is a $15 fee to do this.
Considerations in naming your LLC
While you are bound to the Wisconsin naming guidelines, there are other factors worth thinking about before you finalize a name. Your name should be a tool that clients can use to find your business, so optimizing the name is important.
Names do not have to be unique across states, and only a national trademark will prevent a name from being used multiple times. Even if a name is available in Wisconsin, you should do an online search to see if it’s been used in other places and if clients may be confused. It may also be worth checking on your planned domain name and social media username to see if it is available.
Keep in mind that people may be trying to perform the same search online, so thinking about if your name is easy to spell and remember is also key.
You file a name reservation in Wisconsin for one year.
Select a registered agent
Each LLC in Wisconsin will need to have a registered agent appointed as a part of the formation process. The registered agent is authorized to receive official legal documents, like service of process, on behalf of the company. This allows the state to know they can reach the LLC and acts as a sort of contract to ensure you do not accidentally miss information.
A registered agent can be any individual over the age of 18 who has a physical address in Wisconsin, not a P.O. box. This person does not have to be affiliated with your LLC and can be any person you trust, or it can be the LLC’s members, employees, and managers. By agreeing to be the registered agent, you commit to being at the business address during all normal business hours.
Because of the time commitment, some LLCs will use a registered agent service instead of an individual. These formation services charge a fee to receive your documents and ensure all requirements are met. Any business that has a physical address and can do business in Wisconsin is eligible.
File Articles of Organization
Your LLC is officially a business when it is registered in Wisconsin. This is done through a document called the Articles of Organization, which establishes all the basic information about your business for the state’s records.
The Articles of Organization will ask you to provide:
- The name of your LLC
- The name and address of your registered agent
- Management structure (member-managed or manager-managed)
- Name and address of each organizer
- Name of the drafter
- Effective date, if delayed
- Email or mailing address for a copy of the document to be sent to
- Phone number to be contacted at
Once you have completed the form, it can be submitted online or by mail to the Department of Financial Institutions. Upon approval, you will be issued a certificate that confirms the existence of your LLC and provides a copy of the paperwork.
You can fill out and submit your LLC formation documents here.
For Articles of Organization submitted online, there is a $130 LLC filing fee due at the same time. Those submitted by mail have a $170 filing fee that should be made payable to the Department of Financial Institutions. These state fees are not refundable for any reason.
Wisconsin processing time
Processing is completely immediate for those who file online. For those submitted by mail, 5 business days is the expected turnaround time.
Create an LLC operating agreement
Wisconsin has no requirement for LLCs to provide an operating agreement or any other governing documents. But it is still best practice for startups to have some formal documentation in place. An operating agreement can be a simple legal document that outlines the ownership and operating procedures for an LLC.
By having an operating agreement in place, you can establish rules early on and avoid future conflict. If there is a conflict that needs to be settled by a third party, the agreement will give them a basis to work on, rather than defaulting to Wisconsin’s statewide LLC rules.
The basic provisions covered in an operating agreement are:
- Ownership allocation among members.
- Distribution of profits and losses among members.
- Procedures for adding a new member or removing an existing member.
- Voting processes.
- Management structure: Single-member LLCs, manager-managed, or member-managed
- Roles and responsibilities of each member and/or manager.
- Dissolution protocols in case the new LLC is closed.
There are a number of free templates you can find online, or some businesses will prefer to use a business attorney to draft their operating agreement. However you write the document, be sure all members have signed it and it is stored somewhere safely for reference. There is no need to submit your operating agreement to the state.
Now that your LLC is formed and officially recognized, you can move on to other important tasks that a business owner must complete. Ensuring you are on top of these responsibilities will help your business launch smoothly and help you remain in good standing in Wisconsin.
Get your EIN
Just like you have an individual Social Security Number used to identify you to the government, your business can be issued an EIN. These Employer Identification Numbers are nine-digit, unique numbers that are considered your business’s federal tax ID. The primary purpose of an EIN is to allow the Internal Revenue Service to easily track and identify your business’s federal taxes, but they can be used in other contexts as well.
A common example is when applying for a business bank account. You will be asked for a tax ID number, and if you cannot provide one, you may be denied the account. Other scenarios may allow you to use your Social Security Number in place of an EIN, but this can open you up to identity theft and other concerns.
Obtaining an EIN is fast and free, so it is a good idea to move forward whether you are required to or not. But if you have employees or pay excise taxes, it is also a requirement before you can run your business.
Sole proprietorships don’t need an EIN, in most cases.
You can get your EIN by visiting the IRS website.
Get Wisconsin business licenses
The exact licenses you need will depend on a variety of factors, including what type of business you run and where within Wisconsin you are located.
Licenses all Wisconsin LLCs need
Almost every business in Wisconsin will need to obtain a Business Tax Registration, which doubles as a seller’s permit. If the business is selling or leasing anything subject to state sales tax, this registration will allow them to collect that tax. It also registers the business for any state taxes it will need to pay.
In a handful of cases, a business will not be selling anything considered taxable. Even then, they will likely need to register for the purpose of paying other taxes.
The Business Tax Registration is $20 for the initial application and must be renewed every 2 years for a $10 fee.
Local Wisconsin business permits
Each local government within Wisconsin has the ability to set its own requirements for businesses. The location of your LLC’s physical offices can determine exactly what licenses you need based on these requirements. You should always contact the town and county offices where you are operating to ask about licensing requirements.
Industry-related business licenses in Wisconsin
There are a number of industries that are regulated by the federal government, like agriculture and fishing. If your business falls into one of these categories, there are permits you will need to obtain at the federal level.
Wisconsin similarly has certain industries and professions that require more regulation. If you are involved in these areas, which include things like nail technicians and accountants, you will need to ensure you have the proper professional licensing in Wisconsin.
Open business bank accounts
For LLCs, there is no law that requires you to have a separate business bank account. However, using your personal bank account for business expenses can have severe penalties if it appears like you are mixing finances. It could lead to a loss of personal asset protection or even accusations of tax evasion. The best thing to do is set up a separate checking account from the start.
A checking account is the most important bank account to set up for your LLC, as it can handle income and expenses quickly. Having this account in place can also establish your relationship with a bank, which can help you secure lines of credit or business credit cards down the line.
Review LLC tax rules in Wisconsin
Like the majority of states, Wisconsin imposes a tax on all corporate income – this is called the franchise tax and is a flat 7.9% of all corporate income. LLCs can be set up to be taxed in this manner, but by default, they are treated instead as a pass-through entities. All business profits and losses are able to be reflected on the members’ personal income taxes and are subject to their normal rates, rather than the corporate rate.
Outside of the income tax structure of an LLC, they will be expected to pay all other business taxes in Wisconsin. This may include sales tax and taxes related to payroll and employment.
Regardless of what taxes they pay, all LLCs are required to file an annual report in Wisconsin. You can expect to receive forms and notifications in advance of the due date, which is the end of the calendar quarter of the anniversary of your business formation. For example, if you formed your LLC on February 15th, your due date would be March 31st. There is a $25 fee to file, which can be done online.
Get insurance for your LLC
Establishing a business as an LLC means that your personal assets are protected from financial obligations, like a lawsuit, that your business may have. But it is important to protect the business itself from these cases as well, which is where insurance comes in. While most insurance is not required, at least basic coverage is recommended.
Some types of insurance that are common for LLCs include:
- Workers’ compensation insurance, which is required for any business in Wisconsin with three or more non-owner employees. This provides coverage for employees who are injured, made ill, or even killed on the job.
- General liability insurance, which offers coverage for broad lawsuits like those related to injuries or property damage.
- Professional liability insurance for some professional services who may be faced with charges of malpractice or business error.
Additional resources to help you set up a business in Wisconsin
The various state agencies involved in business regulation in Wisconsin work together to ensure that LLC owners and entrepreneurs are able to easily manage their ventures. You can find a range of resources on the state website.
- One Stop Business Registration, which allows you to register a business with multiple agencies at once.
- A guide to Wisconsin taxes for new businesses.
- Wisconsin’s Small Business Development Center, dedicated to helping new businesses succeed.
Does Wisconsin have a seller’s permit?
A seller’s permit is the common term for a license that allows businesses to collect sales tax, as well as register them to pay the tax back to the state. In Wisconsin, Business Tax Registration serves this purpose and is required by almost all businesses.
What is the Wisconsin tax rate for LLCs?
Most LLCs are treated as pass-through entities, which means profits are taxed as the owners’ personal income. This means the tax rate will be the same as their personal tax rate. If you choose to have your LLC taxed as a corporation, it will pay the flat corporate tax of 7.9% of net income.
What’s the benefit of an LLC over other business structures?
An LLC offers personal liability protection, which means personal assets are safeguarded. Plus, doing business as an LLC is easy to set up and taxes are paid via the owner’s personal tax returns.
How long does it take to create an LLC in Wisconsin?
Once you have completed all information on your Articles of Organization, it can be approved immediately when submitted online. By mail, this can take up to 5 business days. This does not account for the time you spend preparing the forms or applying for licenses after the fact.
Does Wisconsin require a general business license?
The only state-level license required across Wisconsin is the seller’s permit, or business tax registration. All other licensing is either specific to certain industries or issued by local governments. Cities and counties may have general business licenses that they issue, but it varies across the state.
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