How to start an LLC in Wisconsin
Looking to start a new business? One of the first steps is to form the business as a legal business entity. Unless you’re going the basic sole proprietorship route (not recommended for many businesses), you’re probably going to form either an LLC or a corporation. For entrepreneurs in Wisconsin, this guide is for you. Below, learn how to start a Wisconsin LLC step-by-step.
LLCs are a popular option because they provide some liability protection for the owners of the company, should the business ever get sued. Plus, they are typically easier to maintain than a corporation. To start an LLC in Wisconsin, you will need to work with the Wisconsin Department of Financial Institutions to file the Articles of Organization. This article shows you how.
Consider utilizing an LLC formation service
LLC formation services are professional services that can help you out with the business formation process. They aim to make the process much simpler and more efficient for entrepreneurs, saving them valuable time in the process.
Some good options for LLC formation in Wisconsin are Northwest Registered Agent and ZenBusiness. Both offer excellent service, fair pricing, and a quick turnaround. These services can save you a lot of time and effort, so it’s well worth the cost for most entrepreneurs. And they really aren’t too expensive; ZenBusiness has plans starting at only $49.
If you do work with one of these companies, they will guide you through the entire process to ensure that you complete all the necessary steps. If you don’t, you’ll just need to do more work on your own. The steps below outline what you will need to tackle.
Name your new company
Selecting a name for your Wisconsin limited liability company name is the next step you will need to take. You will want to take your time to find a name that you like, that’s relevant to your business, and that will be memorable for your clients/customers.
The name also needs to meet a handful of requirements that are established by the Wisconsin state government. For example, the name must include “Limited Liability Company”, or an abbreviation such as “L.L.C.”, “Limited Liability Co.”, or “LLC”.
Another important requirement is that the name must be unique. This essentially means that the name must not already be taken by another company that is already registered in Wisconsin. To confirm this, simply complete a business entity name search online.
Using a Trade Name in Wisconsin
Wisconsin does allow registered LLCs to also use “trade names”, otherwise known as Doing Business As names or DBAs. DBAs can be registered online once your LLC is formed. This means that you can legally operate your business under your formal LLC name, as well as the newly registered DBA. This is useful for branding and marketing purposes, and also means that you don’t need to worry too much about finding the perfect name for your LLC.
Trade names must be registered after you form your LLC. The trade name is not a business entity in itself; instead, it’s “attached” to your already registered LLC. It is essentially a secondary name for your business. You can register multiple trade names, allowing you some flexibility in branding and marketing efforts.
Appoint a Registered Agent
Wisconsin LLCs are required to appoint a registered agent, also known as an agent for service of process. Essentially, the registered agent is there to receive important documents on behalf of your business. This includes notices from the state of Wisconsin, as well as notice of lawsuits.
Anyone who is a resident of Wisconsin can be a registered agent for a WI LLC. This includes yourself, or an employee. Alternatively, companies registered in Wisconsin can also be registered agents for other companies. Because of this, there are a variety of registered agent services available in Wisconsin.
Two great options are Northwest Registered Agent and ZenBusiness. These companies can serve as your registered agent for a small fee (~$150 per year or less). This ensures professional handling of all important documents, and also means that you don’t need to make your own personal mailing address public record on your business registration.
Create an operating agreement
Note: This step is optional, but recommended.
Most LLCs should have an operating agreement on file. However, it’s not technically required, because it’s an internal document that is not submitted to any government agency. Once drafted, an operating agreement is simply kept on file with the business itself.
Although operating agreements are not required, they are important – especially for multi-member LLCs. These agreements establish the operating procedures of the company, as well as the key rights and responsibilities of each LLC member/owner. Thus, they can help make everything crystal clear for LLC members, helping to avoid future conflicts.
You will likely want to use a template to draft your operating agreement. Services like ZenBusiness provide this to clients who use their LLC formation services.
File LLC Articles of Organization
The Wisconsin LLC Articles of Organization must be filed with the Department of Financial Institutions. This is the formal document that establishes your LLC as a legal entity. You can file the document online or through the mail. There is a $130 filing fee if filing online, or $170 if filing by mail.
To file online
File online with the Department of Financial Institutions. Pay the $130 filing fee online using a credit/debit card or bank transfer.
To file by mail
Download and fill out the Articles of Organization form. Pay the $170 filing fee by including a check or money order for $170, made payable to The Department of Financial Institutions.
Once you file, you will need to wait for WI to process your application. This typically takes 5-7 business days. You will be notified when the application is processed, or if there are any issues to correct.
Apply for an EIN
EIN stands for an employer identification number. It’s a federal tax identification number that is issued by the Internal Revenue Service (IRS), and it’s used to identify business entities. It’s not technically required, but almost all businesses will still need one. An EIN is required to hire employees, and it’s often necessary for tasks as simple as opening a bank account for your business.
The good news is that it is very easy to get an EIN, and there is no cost for the process. Simply fill out this application on the IRS website to get started. You can also apply for an EIN through a business formation service if you already plan to use them for the formation process.
Apply for business licenses & permits
The steps above will establish your business as a legal entity. However, that’s not the only requirement in order to legally do business in Wisconsin.
Many businesses will require various business licenses and/or permits. This is true on each level of government – for example, federal permits for regulated industries, state liquor licenses, and local city/county general business licenses.
The specifics will vary depending on the type of business you are running, so you will need to do some digging to figure out what filings you need to complete.
For federal permits are mostly required for highly regulated industries, such as agriculture, aviation, and firearms.
For state permits and licenses, you’ll want to check out the Wisconsin One Stop Business Portal.
Finally, for local city and county governments, you will need to look into specifics in your area. Keep in mind that if you plan to have multiple locations, you will need to comply with all rules in each of those areas.
Keep your business in good standing
On an ongoing basis, there are various tasks that you will need to take care of to keep your business compliant. You need to keep your LLC in good standing with city, county, state, and federal agencies. If you don’t, you could face fines, penalties, or even the dissolution of your LLC.
These tasks include things like filing annual reports, filing tax returns, and renewing permits. The specifics will be slightly different for each business. However, there are a few common requirements that most businesses in Wisconsin will face. Some examples include:
Wisconsin Annual Report – due every year for all LLCs in Wisconsin
Wisconsin employer tax/payroll tax returns
Wisconsin sales tax returns
Federal employer taxes
Federal business taxes & income taxes
City/county tax returns
Business license renewals
In addition, you must always have a Registered Agent appointed. If your agent moves away, closes their business, etc. you will need to elect a new registered agent – and alert Wisconsin to the change.
There are other requirements, so this list is not complete. You will need to research the specifics of your business. In general, more regulated industries will require more reports and permit renewals.
It’s a good idea to make a list of all the required compliance activities for your business, and then create calendar reminders to keep yourself on track. If you use a formation service like ZenBusiness, they will be able to help with some activities. For instance, they can help you file the annual report, and can help remind you of some due dates. But for the most part, you will need to keep on top of things yourself.
Open a business checking account
Business owners must do everything they can to keep their business and personal finances as separate as possible. This means opening a dedicated business checking account and using this only for business purposes while maintaining a separate personal account.
This is important for bookkeeping purposes, as it simplifies the accounting process by avoiding the clutter of unrelated personal expenses. It’s also good for liability protection, as it separates your personal assets and keeps them safe from business-related lawsuits.
Each bank or credit union will have different requirements for signing up for an account. Most require an EIN, a small opening deposit, and a business license. There may be other requirements, so call ahead to be sure.
This is also a good time to research other financial tools for your company, such as a business credit card, business insurance, etc.