The weather might be cold, but Wisconsin is known for its warm, friendly people. Apart from its famous dairy industry, though, there are quite a few business opportunities to be had in this Midwestern state, including tourism and the film industry, which support a variety of businesses. Starting your own business can get you in on the action.
Forming an LLC is a great first step on that journey. It’s not hard, but there’s a ton of information, and parsing it can take a long time. That’s why we’re here — to strip away the confusing stuff you don’t need and distill the process into simple, easy-to-follow steps.
In this article, you’ll find all the tools you need to start an LLC in Wisconsin, including:
- Tips on drafting and filing the legal documents you need for your Wisconsin LLC formation
- Guidelines for staying within state and federal law
- The actual laws and rules you need to follow
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Step 1: Name your Wisconsin LLC
Your first job is a small but important one: finding a good name for your Wisconsin limited liability company. You must give this some thought because state law has some hard rules about what you can and can’t do.
Words You Have to Use
Wisconsin Statutes section 183.0103 sets forth the basic rule. Your company name must have the words “limited liability company” or the abbreviation “LLC” in it. You can also use the abbreviation “co.” if you wish.
The statute also states that your LLC’s name has to be distinguishable from that of other companies formed or doing business in the state, as well as from any names that have been reserved for any of those companies. Under the law, a name is not distinguishable merely because of added terms like “LLC” or “corporation.”
Let’s say that you want to open a clothing store with the company “Badger Fashions, LLC.” Upon doing a name search, however, you find a company named “Badger Fashions Corporation.”
Under Wisconsin’s law, those names are not distinguishable. You would therefore have to add words to your company name for it to be legal. “Red Badger Fashions, LLC” would probably be okay.
Words You Can’t Use
As in other states, you can’t give your company a name that will lead the public to think that it is part of a government agency. So words like “FBI” or “tax collector” can’t be used.
There are also words you can’t use unless your company is subject to regulation by the state. For example, you can’t use the word “bank” in your name unless you report to the state’s banking division. The same is also true for professions like law: if you’re not licensed by the state bar, calling your business a “law firm” will get you in trouble.
The big rule is this: if you need a license to do your job, double-check with the Secretary of State to make sure your company name complies with the law.
Research the LLC Name You Want
Before you start forming your company, research your desired name using the Corporate Records Search provided by the Wisconsin Department of Financial Institutions (WDFI).
You should run several different searches using different words from your preferred name to make sure that the name you want is different enough from those of other registered companies.
Get a Matching Domain
Once you settle on an LLC name, we recommend you get a matching domain, even if you don’t have immediate plans for a website.
Competitors can buy your perfect domain and its variations to block you from using them.
Domain squatters sift through public records of newly registered LLCs and will buy their matching URLs, only to relist them with huge markups.
A domain name from GoDaddy.com or a similar registrar will cost you between $20 and $50 per year, with regular specials and sales where you can get large discounts.
It pays to check now.
Once you have your domain name, you can also create a branded email address through GoDaddy.
Wisconsin DBA: Using a Fictitious Business Name
Once you have settled on your business name, you might find that it is not the name you want to put on a sign outside your business. That could be because the name you wanted wasn’t available. Or maybe you want to make it clear that your business is different from another similarly named one.
Whatever the reason, this is a very common issue. The solution is to get a trade name, also known as a “doing business as” (DBA) name, for your LLC. Under Wisconsin law, you can do this by filing a statement with the WDFI that has the following information:
- Your LLC’s legal name
- Your LLC’s line of business
- Your LLC’s address
- A statement that your LLC has the right to use that name, and no one else is using that name or a similar one that could lead to confusion
- A confirmation that the contents of the statement are correct
It costs $15 to file a statement, and you can either file it in person or online with the WDFI.
Step 2: Appoint a Registered Agent for your LLC
Wisconsin Statutes section 183.0105 requires all LLCs to have a registered office and a registered agent in the state. A registered agent is someone who receives correspondence and service of process for the LLC, then passes it on to you.
Service of process is a legal term for business letters or legal papers. In other words, your agent is there for the state or the public to communicate with you.
Registered agents are crucial if your LLC is sued. When that happens, the person suing your LLC should serve your Wisconsin registered agent under Wisconsin Statutes section 801.11(5). If they can’t find your agent, there are other methods of service, but they will likely not be as quick, convenient, or reliable.
Even if the person suing does get the papers to you in some other way, they might not do so in enough time to allow you to respond. You could then lose the lawsuit by default judgment. (A default judgment happens when you lose because you didn’t answer.) Therefore, a registered agent is vital for the health of your company.
Wisconsin’s law allows you to choose (1) any resident of the state who does business at the registered office, and (2) a registered agent company to be your agent.
Some business owners try to save money and be agents for their LLCs. We don’t recommend this approach. Hiring a registered agent company lets the LLC use that company’s address as the registered office. That way, the agent handles your important letters and service of process for you.
Being a registered agent might sound easy — perhaps too easy to pay someone else to do. You may be tempted to be your LLC’s agent yourself for a few simple reasons:
- It’s cheap: You’re not paying someone for something you can do yourself.
- It’s simple: The only address and contact information you have to keep current is your own.
- It’s reliable: You will receive all important papers personally.
Those points are all correct. But there are also a lot of reasons not to do it yourself:
- No privacy: Your name and address will be published on the WDFI’s website.
- Junk mail/spam: You will get a ton of junk mail in addition to a small amount of real mail and any service of process.
- No breaks: Agents must be open for service during all business hours. They don’t get time off.
- Business interruptions: If your agency address is the same as your business address, your clients may be interrupted by people serving lawsuits. That could be embarrassing or hurt your reputation.
- It’s your fault if you miss something: You always have to make sure your agency address is correct and up to date. If you make a mistake or miss something, that’s on you.
Registered agent companies are an easy way to avoid these issues. They aren’t pricey, either. They often cost around $100 per year. Their name and address, not yours, are listed on the Internet. Depend on your agent to make sure you don’t miss anything. That way, you can focus on your business.
If you are looking for a professional registered agent service, take a look at our Best Registered Agent ranking for some of our recommendations.
A company can also help if your LLC will work in multiple states and you need to register as a foreign LLC. Just find a company that does business in all those states, pay them a single fee for multiple agents and offices, then let them worry about the details.
Step 3: File Your Wisconsin LLC Articles of Organization
Under Wisconsin Statutes section 183.0201, your LLC doesn’t legally exist until you file your articles of organization. This legal document is short but important because it is essentially the birth certificate for your company. It’s thus important to make sure that it’s done right.
If you would like to avoid the hassle of handling your LLC filing yourself, you can also use a professional LLC formation service. Check out our Best LLC formation services article for some of our suggestions.
What to include in my Wisconsin Articles of Organization?
Wisconsin Statutes section 183.0202 strictly prescribes that you include the following information, and nothing else, in your articles:
- A statement that your LLC is organized under Chapter 183 of the Wisconsin Statutes
- Your LLC’s name
- The street address for your LLC’s registered office
- The name of your agent at the registered office
- Whether your LLC has one or more non-member managers
- The name and address of each person who is organizing your LLC
- If you don’t want your LLC to be formed at the time you deliver your articles to the WDFI, then you can specify a date a time you want it to happen
Wisconsin offers a fill-in-the-blank PDF form for your convenience.
Wisconsin LLC Filing Fee
According to the WDFI’s fee schedule, the fee for your articles depends on the method of filing. If you file a hard copy at the WDFI’s office, the fee is $170. Filing electronically with the QuickStart LLC system, though, only costs $130.
Wisconsin LLC Processing Time
Processing time for articles of organization runs takes about five business days (one calendar week). If you are filing your articles by mail, you should add extra time for mailing. Mail filing, then, can take two weeks or longer to complete.
Online filing happens much more quickly. In that case, you can expect that the WDFI will process your articles within two business days.
If you want the fastest service possible, you can pay the expedited service fee of $25. The WDFI says it will take action on expedited documents no later than the end of the first business day after you file them.
Step 4: Draft your Wisconsin LLC Operating Agreement
Operating agreements are contracts between you and the other members of your LLC.
Wisconsin won’t force you to have an operating agreement for your LLC. Nonetheless, we still strongly recommend you make one. It states your company’s rules and can help settle disputes. It also tells you how to let in new members, let existing members exit, and manage a variety of other unexpected events.
If you want your contract to be binding, you will have to make sure it is in writing. Unlike some other states, Wisconsin Code section 183.0102(16) does not allow oral agreements. If you are going to go to the trouble to set up the rules, though, it makes sense to have the contract in writing anyway.
Every company’s needs are different, so every operating agreement should be different. This is your chance to set down the rules that will govern your livelihood for a long time. Wisconsin law takes these contracts very seriously, so it is important to give them a lot of thought.
A good operating agreement should have all up-to-date facts about your LLC. If you are forming your company with other people (LLC members), you likely each have your own job at the company. The agreement outlines all the jobs and sets standards to make sure everyone is doing their best.
According to the statutes, here are other popular uses of operating agreements:
- They outline what the LLC is legally able to do. The operating agreement should also set down how the company is allowed to conduct its business from day to day.
- They say what the manager has the right to do. Managers also have special duties to the company and the members. The operating agreement should state these.
- They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
- They say how new members can join the company. They also have rules about how existing members can leave, or how they can transfer their interest to someone else.
- They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
- They say whether members or managers are in charge. They also say how to hire and fire managers.
- They say how and under what circumstances the LLC should end. You might not want to dissolve your business now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
- They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.
Wisconsin has a thorough system of laws controlling what happens in each of these cases unless you have an operating agreement.
Therefore, without an operating agreement in hand, the future of your company could be in the hands of the legislators that wrote the most recent version of Wisconsin Statutes Chapter 183. If that makes you nervous, you’re wise. Thus, start thinking about what you want in an operating agreement as soon as possible.
As you consider your options, here is one last thing to keep in mind. Unlike your articles of organization, the operating agreement is a private contract. It doesn’t need to be filed with the state, and it can be amended as you and the other members of your LLC like.
Step 5: Get an EIN (Employer Identification Number) for Your Wisconsin LLC
Your personal income tax documents use your social security number to identify you. Companies don’t have social security numbers because they’re not people, but it’s just as important that the government keeps track of where their money is. The way it does that is by issuing EINs.
Not all LLCs need an EIN. To see whether your LLC needs an EIN, ask yourself these three questions:
- Does your LLC have more than one member?
- Does your LLC have any employees?
- Is your LLC taxed as a C corporation or S corporation?
If the answer to any of the above questions is yes, you will need an EIN. Also, note that most banks will need an EIN to open a bank account for your LLC.
The good news is that it’s not hard to get an EIN. The IRS has a detailed website on the topic and allows you to apply online. An application takes about five minutes. If you don’t want to go online, you can also file IRS form SS-4 via mail or fax.
Because it’s so simple, you should never pay anyone to get an EIN for you unless they are throwing it in as part of a bigger service package.
First Tasks After Registering your Wisconsin LLC
Your company is formed, and you’re ready to go. Before you put up your sign and open your doors, though, there are a few other crucial tasks you need to handle.
Open a Business Bank Account
Your first stop is the bank. You need to open a separate account for your LLC. There are three great reasons to do it:
- Accounting: You’re in business to make money. You can’t tell if you’re making money unless you know how much your company spends and deposits every month.
- Credit: Even successful companies need to borrow money. You don’t want to use your personal credit, though, for a business expense. Keeping LLC money separate helps it build up credit that it can use for its own needs.
- Personal Asset Protection: Keeping your company’s money separate from your own is the whole point of even forming an LLC instead of operating as a sole proprietorship. Without a business bank account, you risk losing that protection.
The accounting purposes for separating money are simple. Running a business means keeping detailed financial records about expenses and income. You can’t do that if you don’t keep your business and personal finances separate. The easiest way to do that is to use different accounts.
It’s important to plan for times in the future that your company might need to draw on credit, even if you don’t need it now. A few years down the road, you might need to make improvements, sign a new lease, or invest in new technology. When that time comes, the LLC should do the borrowing, not you.
The liability protection of an LLC is perhaps the most important reason for separate bank accounts. If someone sues it, your own assets are not at risk, and you won’t be liable for business debts. This company/individual separation is called the corporate veil. (Even though an LLC is not a corporation, it’s still called a “corporate” veil.)
If you treat your company’s assets like your own, the veil can be pierced. That means you would lose all liability protection. So, for example, if you are taking the company’s money and using it to pay your household bills, you could lose a key benefit of your LLC!
We can’t stress this enough: don’t mix your personal assets with those of your company. Get an LLC bank account as soon as possible, and it will be one less thing you have to worry about.
Get Business Insurance For Your Wisconsin LLC
It’s not fun to buy insurance or pay the premiums, but when you need it, you’ll be glad you did. Just like your health, car, and home, your new business needs to be protected. There are lots of types of insurance to think about. Here are some more common policies that you might need.
- General liability insurance: You’ll need this if there’s an injury on your property. It pays for damages and a lawyer if you need one.
- Commercial automobile insurance: This works like your own car insurance. It covers company drivers and vehicles.
- Workers compensation insurance: Though there are some small exceptions, virtually every employer in Wisconsin must purchase workers’ compensation insurance to protect against on-the-job injuries. Keep in mind, though, that LLC members do not count as employees for this purpose.
- Commercial property insurance: This protects from losses due to property damage. Flood insurance is often a separate policy.
- Professional liability insurance: Lawyers, doctors, architects, and other professionals need this insurance. It provides coverage and legal defense in the event of a malpractice case.
- Business income insurance: If you have to close for some time, business income insurance can pay back the loss of income. Policies vary, though. Make sure that you know what kinds of losses will be covered.
Keep Your Wisconsin Company Compliant
Congratulations. You’ve set up your company, and you’re ready to start. Just remember that your company will have ongoing obligations that it needs to fulfill to its local, state, and federal governments. With that in mind, here are some things you should remember as you do business.
Wisconsin Business Permits and Licenses
The state of Wisconsin doesn’t require a general business license for your LLC. You must, however, check with your city and county governments about what permits or licenses they require for doing business.
What’s more, Wisconsin also has a long list of professions that are regulated by state agencies. If your LLC will do business in one of these areas, it will probably require a separate license by that agency.
Wisconsin Tax Requirements
Because LLCs are “pass-through” entities by default, they are usually not taxed directly on their income. Rather, members are taxed on the income they each receive from the company. If you elect a different tax treatment by the state, your LLC will likely pay a 7.9% tax. For advice on these choices, talk to a Wisconsin lawyer or accountant.
Federal LLC Tax Filing Requirements
Your LLC is considered a pass-through business entity for federal tax purposes. Profits or losses from your LLC should be on Schedule C of your personal income tax return.
Annual Report and Other Filing Requirements
Wisconsin Statutes section 183.0120 requires your LLC to file a report with the state every year. That report must include:
- Your LLC’s name and home state (i.e., Wisconsin)
- The registered office address and registered agent for your LLC
- The address of your LLC’s principal office
- If your LLC has one or more managers, the name a business address of each
- A brief description of your LLC’s business
The annual report is due each year during the quarter of the year when your LLC has the anniversary of its formation. It costs $25 to file. The WDFI has further instructions and links for submitting your report online on its website.
Wisconsin Business Formation Quick Links
- Internal Revenue Service — apply for an EIN online
- IRS information regarding the federal tax treatment of LLCs
- Wisconsin Department of Financial Institutions (WDFI)
- WDFI — Annual Report Information and Instructions
- WDFI — Corporate Records Search
- WDFI — Form Articles of Organization
- WDFI — Information About Fees and Expedited Service
- WDFI — LLC Fee Schedule
- Wisconsin Department of Revenue — Sales and Use Tax
- Wisconsin Department of Revenue — Withholding Tax
- Wisconsin Department of Safety and Professional Services — A-Z Boards & Councils List
- Wisconsin Department of Workforce Development — Worker's Compensation Insurance Requirements
- WDFI — Online Filing (Articles of Organization)
- Wisconsin Statutes Chapter 132 — Trade Names/DBAs
- Wisconsin Statutes Chapter 183 — Limited Liability Companies
- Wisconsin Statutes Chapter 801 — Rules of Civil Procedure
Wisconsin LLC FAQs
How much does it cost to start a Wisconsin LLC?
It costs $170 to file your articles of organization in person or by mail. Online filing costs only $130.
What is the processing time to form my Wisconsin LLC?
Five business days by mail or in person, two business days if you file online. You can expedite the handling of your documents to the end of the next business day by paying an extra $25 fee.
What are the benefits of a Wisconsin LLC?
A Wisconsin LLC protects your personal assets while giving you favorable tax treatment. You can also use an operating agreement to customize your business structure so it best serves the needs of you and the other LLC members.
Where do I check if my Wisconsin LLC name is available?
Use WFDI’s free online Corporate Records Search. Make sure you check multiple words and phrases from your proposed name to distinguish it from reserved names and the names of other companies doing business in the state.