Forming an LLC in Wisconsin
If you're forming a Wisconsin limited liability company (LLC), then you'll want to make sure that you understand all of the requirements for Wisconsin LLC formation for your small business.
LLC laws vary from state to state, so it's important to get a good grasp of the steps you need to take to form your own startup LLC in Wisconsin. Following a step-by-step guide makes the process of creating your new LLC in Wisconsin simple.
Steps to Start a Wisconsin LLC
Name Your LLC
To make sure that your LLC name complies with the laws of Wisconsin, you'll need to take the state naming requirements and guidelines into consideration. Note that your business name must be distinguishable from all other business names on record with the state. This means that your name can't be the same as or too similar to a business name that's already registered or reserved. How do you know if a business name is already taken? You can conduct a name search through the Wisconsin business name database. If a name that you like is already taken, you need to pick a different name.
It's also important to note that your LLC name must include one of the following entity designations or abbreviations:
- Limited liability company
- Limited liability co.
When you settle on a name that's available, you might want to make sure it doesn't get taken before you can register your business. You may pay a fee and file a name reservation application by filing an application by postal mail. Once approved, your name reservation is good for 120 days.
Get a Registered Agent
Every Wisconsin LLC and foreign LLC doing business in Wisconsin must select a registered agent who agrees to accept legal documents if the company is sued.
The agent must have a physical street address in Wisconsin and be either a:
- Wisconsin resident
- Business entity authorized to do business in Wisconsin
You can serve as your own registered agent, but most business owners find that it's best to select someone else or use a registered agent service. Note that a P.O. Box is not acceptable for a registered agent address. Also, the Wisconsin registered agent must be a person or company that is available during normal business hours to accept service of process.
File Your Articles of Organization
This is the step that forms your LLC. To start an LLC, you must file the articles of organization with the Wisconsin Department of Financial Institutions. The filing (which includes fees) must include the following information:
- LLC's name and address
- LLC's purpose
- Registered agent's name and address
- Whether the LLC is member-managed or manager-managed
- Name of the drafter of the articles
- Name and address of each LLC organizer
You may file online or via regular mail. The filing fee is $130 for online filers. If you choose to file your Wisconsin articles of organization by paper, the filing fee is $170.
Draft an Operating Agreement
You should consider drafting an operating agreement for your organization, even though it's not required by law in the state of Wisconsin. It's an important internal document that can provide guidance if you ever face a dispute or any conflict among members of the organization. LLC operating agreements tend to address the:
- Process for admitting new members
- Voting procedures
- Rights, responsibilities, and liabilities of members
- Procedures for dissolution
Without a Wisconsin LLC operating agreement, state LLC laws will apply in the event there is a conflict.
Get an EIN
Most businesses are required to obtain a Federal Employer Identification Number (FEIN). It's essentially a Social Security number for your business issued for federal tax purposes. You can apply for one on the Internal Revenue Service (IRS) website for free.
Set Up Business and Tax Accounts
Wisconsin businesses may need to complete a business tax registration and pay a $20 fee. This is done through the Wisconsin Department of Revenue. The initial registration is good for two years then must be renewed yearly. The renewal fee is $10.
Business licenses and permits are often required for LLCs in Wisconsin. However, some licenses or permits are industry-specific, so you'll need to check with state and local agencies to determine what the needs are for your type of business. The Department of Safety and Professional Services provides a list of the licenses that are required by some professions.
Your LLC will likely be subject to various state business taxes depending on the type of business activities it conducts.
State Business Tax
If you choose to be taxed as a corporation instead of a pass-through entity (for which business income will be reported on your personal income tax return), you will pay the 7.9 % state corporate business tax.
State Employer Tax
If your LLC has employees, you must withhold the state income tax and register with the Wisconsin Department of Revenue for a Wisconsin withholding tax account number. The registration fee is $20 and valid for two years. After that, you must renew and pay the renewal fee of $10. As an employer, your LLC may also have to pay unemployment insurance to the state. More information about unemployment can be found on the Wisconsin Department of Workforce Development's website.
Sales and Use Tax
If your LLC sells, leases, or rents tangible property or taxable services in Wisconsin, you must apply for a seller's permit with the Department of Revenue unless you qualify for a sales tax exemption. You may be required to make a security deposit before you are eligible to receive your permit. It typically takes seven to ten business days to receive your permit once your application is received by the Department of Revenue. Retail businesses not located in Wisconsin but engaging in business within the state must obtain a use tax certificate.
Business Licenses and Permits
Your LLC may be required to get additional licenses and permits if your business involves alcohol, fuel, or tobacco. You can register for applicable business permits online through the Department of Revenue's website. Also, you may need to apply for local business licenses in the city or county where your LLC is located or does business. Contact your local city or county government to find out if your LLC needs to apply for any specific licenses to operate.
Registration in Other States
If you want to do business in another state, you will likely have to register as a foreign LLC in that state or jurisdiction. You will probably be required to submit an application, pay a fee, and provide proof of your LLC's good standing in its home state of Wisconsin.
All LLCs must file annual reports with the Department of Financial Institutions. You have the option of filing online through their One-Stop Business Portal. A $25 filing fee is required. Two years after your initial registration, you must renew your business tax registration each year and pay the $10 renewal fee. Your business will also be required to pay state and federal income tax yearly and remit sales tax.
Wisconsin LLC Formation FAQs
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