How to Form an LLC in Wisconsin

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Wisconsin LLC Quick Facts

Wisconsin LLC Costs

Initial LLC Filing Fee –

 

  • Filing Online- $130
  • Filing by Mail – $170

 

Recurring State Fee: Annual Report Fee – $25

LLC Processing Tiime

  • Filing online – 2 business days
  • Filing by Mail – 5 business days

 

Expedited processing is also available for an additional fee.

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Quick Reference

The Limited Liability Company (LLC) is a popular entity structure for businesses starting in the state of Wisconsin. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Wisconsin without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting the business owner’s personal assets.

Related: How Does an LLC Protect You?

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, general partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

Cost to Form a Wisconsin LLC

To form a Limited Liability Company in Wisconsin, file the Articles of Organization with the Wisconsin Department of Financial Institutions.  The LLC filing fee online is $130 and $170 by mail.

Processing time for the LLC is typically around five days when filing by mail or 2 business days when filing online. Expedited service is available for an additional $25, which only takes 24-hours.

Guide to Forming an LLC in Wisconsin

The steps for filing online or by mail are largely the same.  The screenshots show how to file online.

Forming an LLC can be both affordable and is something most people can do themselves. Entity formation companies like IncFile or IncAuthority help guide you through the process and make sure there are no mistakes.

Related: Should you use a Formation Service, Hire an Attorney or Do it Yourself?

How to Form an LLC in Wisconsin

Step 1: Name of Domestic Limited Liability Company

Enter the name you want for the domestic LLC.  The name of the Limited Liability Company has to differ from other entity names registered with the Department of Financial Institutions.  You can also check on available LLC names in Wisconsin before going through the filing process to ensure the one you want is available.

The LLC name must include a designator at the end of the business name, which describes its type of business entity. Available designators can use the following words or abbreviations:

  • Limited Liability Company
  • Limited Company Co.
  • L.L.C.
  • LLC

Pay careful consideration to any periods as a missing period may impact the approval of the Articles of Organization.

A comma may be used after the business name and before the designator.  “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.

Enter the name along with the designator you would like to use and click on “Check Name Availability”  A new page will open, indicating whether the name is available or not.  Even if the search comes back with the name is available, the Department of Financial Institutions’ office will also review it to ensure it isn’t being used by someone else or that it is too similar to another name.

Before settling on a name, you may want to do a domain name search to match your business name and website address.

If there is a name you want, but are not ready to register the LLC, you can file the Name Reservation Application. The name reservation will hold a name for up to 120 days, at a cost of $15.

If you plan to use a different name from the one that you register (perhaps you want to run multiple businesses under the LLC), you can use a trade name (sometimes referred to as a fictitious business name, assumed name, DBA, or Doing Business As name).  To register, file the Trade Name Registration form and filing fee of $25 with the Wisconsin Department of Financial Institutions.

Wisconsin LLC Name Reservation

Step 2: Purpose

Generic language stating the LLC is organized under Chapter 183 of the Wisconsin Statutes.  This language is needed in order to form an LLC in the state, and no action is needed.

Step 3: Registered Agent Name

To have an LLC in Wisconsin, a Registered Agent must be identified.  The Registered Agent act as a single point of contact for service of process to receive important legal notices, tax documents, summons, subpoenas, etc., on behalf of the LLC.  The agent can either be a resident of Wisconsin, a Wisconsin registered entity, which could be an attorney, accountant, etc., or a Registered Agent service.

If it’s an individual, enter their name.  If it’s not an individual, click “Select Entity” to search the name in the state’s database.

Wisconsin LLC Registered Agent

Step 4: Registered Office Address

The Registered Agent must have a physical address in the state, and PO Boxes are not allowed.  This address may be the address of the LLC, but it doesn’t have to be.

You are not required to pay for a registered agent. Any individual meeting the requirements can be the agent; however, the agent’s name and address become public record, and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when doing business from home or are still employed and don’t want their employer to find out.  Hiring a company like Northwest Registered Agent to be the Registered Agent will reduce unwanted phone calls and mailings.

Enter the address information in the address fields.

WI Registered Office Address

Step 5: Management

This section asks if the LLC is Member-Managed or Manager-Managed.

  • Member-Managed LLCs have an active involvement in the management and have the authority to act on behalf of the LLC.
  • Manager-Managed LLCs are hired by the members to run the LLC, similar to a CEO of a corporation.  This is generally used when there are passive members in the LLC, and the members do not actively manage or operate in the affairs of the business.

Most LLCs are member-managed.

Select Manager(s) or Member(s) and “Next”

Wisconsin Manager vs Member-Managed LLC

Step 6: Organizer Information

An LLC Organizer is someone involved with the formation of the Articles of Organization.  The Organizer may or may not become a member, such as a mentor, attorney, or accountant, but any of the initial members can be listed as an organizer.

Enter the name and address of each organizer.

Step 7: Select the Drafter

The drafter is the person who entered the information into the Articles of Organization, and their name needs to be included in this section.  This is likely one of the members, attorney, or entity formation service.

Step 8: Delayed Effective Date

This is an optional section, but if you want the Limited Liability Company to start on a later date, click the “Declare Delayed Effective Date” button and then enter a date less than 90 days in the future.  The main reason for delaying the LLC start date is when the filing is being done close to the end of a calendar year, and the business isn’t going to have any activity until the start of the year.  By delaying until the following year, they will reduce the number of end-of-year filings.

By not selecting anything, the effective date will be the date when the Department of Financial Institutions files the Articles of Organization.

Wisconsin delayed effective date llc

Step 9: Signature

Have at least one organizer sign the document by selecting their name.  Click “Next” and enter their name, address, email, and phone number.

Those signing will be the point of contact should there be any issues with the filing of the Articles of Organization.

Step 10: Review

Review that all of the information is correct.  If there are no corrections, click “Next.”

Step 11: Pay and File

Pay and file the Articles of Organization.

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Tasks After Forming Your LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare a Wisconsin LLC Operating Agreement

The operating agreement is an internal document that governs the framework of an LLC.  This document covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.

LLCs in Wisconsin are not required to have an operating agreement, but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Related: Wisconsin operating agreement template

Obtain an EIN

The EIN or Employer Identification Number (also called a Federal Employer Identification Number or FEIN) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes. The EIN will be needed to hire employees, open a bank account, build business credit, register for business licenses and permits, file federal and state taxes, and more.

There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.

Related: How to Apply for an EIN

Elect the LLC’s Form of Federal Income Taxation

One of the significant benefits of the Limited Liability Company is the tax flexibility it provides.  When applying for the Employer Identification Number, you will choose how the entity will be taxed for federal income tax purposes. While there are some limitations, an LLC may be classified for federal income tax purposes as a:

  • Sole proprietorship
  • Partnership
  • C-corporation
  • S-corporation

While this may sound confusing, this refers to how the LLC is taxed, not the legal structure.

Related: How can an LLC be taxed?

By default, the taxation of an LLC is called pass-through taxation, which means the profits or losses of the LLC flow through to the members.

Single-member LLCs will, by default, be taxed as a sole proprietorship. The members can also elect to change the taxation to a C-corporation or an S-corporation.

Multi-member LLCs will, by default, be taxed as a partnership. The members can also elect to change the taxation to a C-corporation or an S-corporation.

In general, the difference between being taxed as a corporation and being taxed as a sole proprietorship or partnership the profits and losses are passed to the member’s federal income tax returns based on their percentage of ownership.  As a result, the owner will pay self-employment taxes on all business profits.  As an alternative, electing to be taxed as a corporation allows the members to take a reasonable salary and then pay payroll taxes.  Any remaining profits are distributed and aren’t subject to payroll taxes, resulting in potential tax savings.

Before electing how your LLC will be taxed, consider talking with an accountant to assess which one will be best for you. Some tax elections, such as the C corporation, may be detrimental for some people due to double taxation.

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original LLC formation paperwork from the state showing the creation of the LLC.
  • Driver’s licenses of the members.
  • Occasionally, the bank will request a Wisconsin Certificate of Good Standing to prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC 

Apply for Business Licenses and Permits

After forming the LLC, there will likely be various business licenses and permits needed before starting the business. Some common registrations include:

  • Business License – Some cities require businesses to obtain licensing before they can start.
  • Professional License – Certain services such as barbershops, accountants, salons, and others must be licensed. ​A full list of professions is maintained by the Wisconsin Department of Safety and Professional Services.
  • Seller’s Permit – In order to sell products and certain services, sales tax registration with the Wisconsin Department of Revenue will be necessary.

Related: What Business Licenses are Needed in Wisconsin?

Get Business Insurance

Even with the liability protection of the LLC, business insurance is important to protect the business. The most common types of insurance include:

  • General Liability Insurance – covers damages owed and medical expenses for accidents that happen at your place of business.
  • Business Property Insurance – replaces damaged, stolen, or lost business property. This includes your physical business location, equipment, supplies, and anything else you used to run your business.
  • Business Vehicle Insurance – covers company vehicles and may also include coverage for personal vehicles used for business-related activities. Many personal policies won’t cover your vehicle if there is an accident while being used for business purposes.
  • Workers Compensation Insurance – mandatory in most states if you have employees, this insurance covers medical expenses that occur because of an accident or injury that happens to one of your employees while they’re at work.

Related: 7 Types of Insurance Your Business May Need

File Annual Reports

LLCs are required to file an annual report with the Wisconsin Secretary of State.  The annual report updates ownership information and other details.

Related: How to File a Wisconsin LLC Annual Report