How To Start An LLC In Wisconsin | Form Your Limited Liability Company Hassle-Free & Without Unnecessary Costs

Do you want to start an LLC in Wisconsin?

There are more than enough reasons why you should start a Wisconsin LLC. For instance, the state is home to about six million citizens, which is good for business. It is also a center of agriculture, manufacturing, and healthcare.

Why should you go for a limited liability company?

An LLC combines the flexibility and lack of formalities of a sole proprietorship or partnership and the limited liabilities of a corporation. If you want to limit your personal liability in case of lawsuits or business debts, then you should consider an LLC. For example, you can check out here how to form a LLC in Maryland, or in nearby North Carolina in this post. In addition, we provide an article on effortless forming of an LLC in Colorado and LLC in Ohio State.

So, how do you form an LLC in Wisconsin?

How Much Does It Cost to Set Up an LLC in Wisconsin?

When starting a business, it’s vital to know the expected costs to plan accordingly.

LLC formation in Wisconsin is an affordable process.

First, you need to file your Articles of Organization either by mail or online. If you file by mail, it will cost you $170, while filing online will cost $130. If you wish to expedite the online process, the cost will increase to $155.

Apart from the cost of filing your Articles of Organization, you will also pay $15 to reserve your desired name.

The cost can increase if you decide to use a registered agent to acquire necessary permits, licenses, and insurance policies. Here, you can find out more about top LLC formation services, or chose the right state to form your LLC. For example, learn how to form your LLC in Illinois in this review.

Welcome sign in Wisconsin

Benefits of Forming a Limited Liability Company in Wisconsin

It’s not a must that you form a limited liability company in Wisconsin. You can choose to start a limited partnership, a corporation, or any other type of entity.

However, most entrepreneurs opt to form an LLC as it comes with tons of benefits, including:

  • An LLC exempts you from paying corporate taxes as you only pay personal taxes. In Wisconsin, you can consider the Enterprise Zone Tax Credit.
  • Your private properties are protected. You are not responsible for the business debts and lawsuits.
  • You enjoy less reporting with an LLC. Unlike a corporation, a limited liability company (LLC) has fewer meetings and reporting.
  • A Wisconsin LLC also offers you a flexible way of profit distribution and management. It doesn’t involve a board of directors. For a partnership, the profit distribution is 50/50, but in an LLC, you can come up with your way of sharing profits.

How Do You Start a Wisconsin LLC?

Forming a limited liability company in Wisconsin is a seamless and effortless process. Before you can start the process, it will help if you could collect necessary information about the business, including the name and address of members. Members are responsible for running and managing the company, and they can also use the profits to pay themselves.

After collecting the necessary information, use the following steps to start your Wisconsin LLC:

Choose a Name for Your LLC

The first step in forming an LLC in Wisconsin involves getting a unique name for your business. The name should be distinguishable from other entities’ names in the Wisconsin Department of Financial Institutions file.

You can check for the name’s availability with the Wisconsin Department of Financial Institutions business name database.

According to Wisconsin law, your choice of a business name for your LLC should contain the following phrases or abbreviations:

  • Limited liability company
  • Limited liability Co.
  • L.L.C
  • LLC

You can reserve a name for 120 days with the Wisconsin Department of Financial Institutions. You should file a Name Reservation Application (form 1) and post it by mail.

As you do business, it’s not a must that you use your business’s official name. Alternatively, you can use a trading name, also known as a fictitious name, assumed name, or DBA (doing business as). To use a trading name in Wisconsin, you should register with the department of financial institutions.

Note, your choice of name for your LLC in the state of Wisconsin cannot include words or phrases that can confuse it with other government agencies. Such government agencies can consist of the treasury, FBI, State Department, etc.

If the name includes restricted words such as a University, bank, or attorney, you require more paperwork and a licensed individual as part of the LLC.

Get a Registered Agent

Your Wisconsin LLC should have a registered agent for service of process. The registered agent acts as an intermediary between your business and the state. You can compare some of the top such services in our detailed IncFile reviewour Zen Business review, and we also reviewed Rocket Lawyer, to boot. We also included a ZenBusiness or Rocket Lawer side-by-side comparison.

The agent can be an individual or business entity that accepts legal suits and tax papers on behalf of the LLC. The registered agent should be a Wisconsin state resident or a registered business authorized to do business in the state.

The registered agent should have a physical address in Wisconsin state.

Can a foreign LLC do business in Wisconsin? Yes, it can. But it must get a registered agent in the Wisconsin state. You also need to register with the Wisconsin Department of Financial Institutions, which you can do online. You need to file a Foreign Limited Liability Company Certificate of Registration, which will cost you a $100 filing fee.

Before filing the application form, you should make sure the LLC’s name is available in Wisconsin by checking with the business name database. If the name is not available, you should find a fictitious name to use and register the business using the name.

To register the fictitious name, you should file a Foreign Limited Company or a Name Registration Application Foreign Corporation form with the department of financial institutions. It will cost you a $50 filing fee, and the registration should be done by mail.

The name of the foreign LLC expires on 31st December each year. As such, the foreign LLC should file a name application each year between 1st October and 31st December following the same procedure and filing fee. The application will be indicated as a renewal.

File Articles of Organization

Articles of Organization is the formal document that creates your business as an LLC. You should file the Articles of Organization (Form 502) with the financial institutions’ department in Wisconsin state.

The Articles of Organization should include:

  • The name of your LLC.
  • Name and address of the registered agent.
  • Whether your Wisconsin LLC will be manager-managed or member-managed.
  • Email address and phone number of the LLC.
  • Name and address of the organizers.
  • The signature of the organizer.
  • The name of the person who drafts the Articles of Organization.

You can file the Articles online at the department’s website or file them by mail. It will cost you $170 if you file by mail and $130 if you file online.

Get an Operating Agreement

An operating agreement is not a mandatory requirement while starting an LLC in Wisconsin state. However, it is highly advisable that you have one.

An operating agreement is a document that establishes the responsibilities, rights, duties, powers, obligations, and liabilities of members to themselves and the company.

The operating agreement is an internal document, and you don’t need to file it with the secretary of state as you file the Articles of Organization. If your newly created or existing LLC doesn’t come up with an operating agreement, the existing Articles of Organization, bylaws, limited liability company agreement, etc., will become the operating agreement.

An operating agreement ensures everybody is on the same page in running the business, whether the LLC is member-managed or manager-managed. This helps to avoid conflicts in the future.

Get an Employer Identification Number

An Employer Identification Number, also known as an EIN, is a number given by the department of revenue to identify the business for tax purposes.

The number is also known as Federal Tax Identification Number (FTIN) or Federal Employer Identification Number (FEIN.)

You need an EIN to:

  • File federal and state taxes.
  • Hite employees.
  • Open a business bank account.

You require an EIN if your LLC has more than one member, even if it doesn’t have an employee. You must also get an EIN if you form a one-member LLC and you intend to hire employees or have it taxed as a corporation rather than a sole proprietorship.

Your LLC may also require other state licenses and permits, depending on its location and nature of business.

If you’ll be selling goods, hire employees or collect sales taxes, you can register with the Wisconsin department of revenue online or using Form BTR-101, Application for Business Tax Registration.

File Annual Reports

All domestic and foreign LLCs operating in Wisconsin state must file an annual report with the department of financial institutions. You should file the annual report online on the department of financial institutions’ website.

The report should be filed on the calendar quarter of the anniversary month when you start your LLC. For instance, if you start the LLC in January, you should file the report by 31st March. The due dates for filing the annual reports are 31st March, 30th June, 30th September, and 31st December.

The department of financial institutions will send a notice to your registered agent with instructions on how you can file the annual reports online.

The reports filing will cost you a $25 filing fee for domestic LLCs and $80 for a foreign LLC.

The department of financial institutions will send a notice to your registered agent with instructions on how you can file the annual reports online.

The reports filing will cost you a $25 filing fee for domestic LLCs and $80 for a foreign LLC.

Conclusion

There are many types of businesses that you can start in Wisconsin state including a sole proprietorship and partnership. However, many entrepreneurs prefer an LLC because of the benefits it offers. For instance, you have no personal liability for the business lawsuits and debts. As such, the bank cannot come for your personal properties to settle their debt. If you want to start an LLC in Wisconsin state, you can use a registered agent’s services. However, creating the business in Wisconsin is seamless, and you can do it yourself and save the cost of hiring a registered agent for all business licenses. Above are the instructions you need to follow in starting the business.

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