Wisconsin is a moderately populated but important Midwestern state that is a crossroads between the Twin Cities, Chicago, and Michigan. With its diverse population and industries, Wisconsin can be a good fit for many new businesses serving a variety of different populations. And for people just starting businesses, the LLC way to do it.
First, though, you will have to put down some money if you want to get started. That might sound ominous, but it’s relatively painless if you know what you’re doing. We’re here to help you figure out where you need to spend your money, as well as optional purchases you’ll want to make that can make your life easier, both now and in the future.
This article will help you make a budget for starting an LLC in Wisconsin. Be sure to also check out our How to Start an LLC in Wisconsin article for more general information.
- The required costs for every LLC
- Extra costs we recommend you incur
- The different ways you can form your LLC, as well as the pros and cons of each
Total Wisconsin LLC Cost – $130 or $170
Wisconsin’s Department of Financial Institutions (WDFI) is the body you must go to if you want to form an LLC. To do so, you need only file your LLC’s articles of organization. According to WDFI’s fee schedule, you’ll need to pay $170 to file a hard copy of your articles. If you use the state’s online system, though, the fee is reduced to $130.
Keep in mind that you will likely need to do more than just legally form your business entity. Many owners find that they need to pay local costs for licenses and permits. Several optional services are often crucial to getting a company off the ground. We’ll discuss these in greater detail below.
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How Much it Costs to Start a Wisconsin LLC
Just as with anything else, paying the least you can get away with is not a great idea when starting your LLC. There are likely many costs that you’ll need to think about if you want to make your experience easier and more efficient.
Articles of Organization Filing Fee – $130 or $170
Your Wisconsin LLC articles create your company. Without them, it just doesn’t exist. After they’ve been filed, your LLC can buy, sell, borrow money, and conduct other lawful business. Thus, making sure that you have this document correctly drafted and filed is your first major step.
Maybe you think drafting the LLC articles sounds hard, but it doesn’t have to be. WDFI gives you an easy fill-in-the-blank form on its website.
Of course, if you, your LLC formation service, or your lawyer want something more involved, you’re free to draft your own. But keeping things simple with WDFI’s form is a good way to get started.
Wisconsin LLCs – Optional Costs to Consider
Starting a business involves more than just paying money and forming a company. You also need to think ahead regarding the needs of your LLC and how to ensure its health and survival when the unexpected happens. To cover your bases, here are some different products and services we strongly recommend you think about buying.
Expedited Processing Fee – $25
Processing time for articles of organization in Wisconsin is 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. WDFI says it will take action on expedited documents no later than the end of the first business day after you file them.
Business License – Variable
Wisconsin doesn’t require a general statewide business license. Your LLC may need a local business license, though, depending upon its city and/or county. If you open a business in Milwaukee, for example, there are some different licenses that you might have to obtain to open shop.
Depending on the kind of business you want, a license could be free, or it could cost several hundred dollars. Make sure you contact your county and city governments to comply with all local laws.
Registered Agent Fee – $100
Every state has some version of a registered agent law, and Wisconsin isn’t any different. A registered agent is a person or company you name that makes their address publicly available. You need to have an agent so that, if the state or someone else needs to contact your company, there is one place they can always go.
Your Wisconsin registered agent will receive the legal papers if your LLC is ever sued. That might not be fun to think about, but if it happens, you need to know as soon as possible.
Many LLC owners are tempted to serve as their companies’ agents. This is usually not a good idea. It involves making your address public and being constantly available just in case someone wants to sue your company.
It’s an easier and cost-efficient plan to hire a Wisconsin registered agent service for your company. These agents usually charge $100 per year and take care of all your company’s registered agent needs. It’s money well spent.
Operating Agreement — Variable
An operating agreement sets down the rules of your LLC. It says how the people in charge should do their jobs, when meetings must be held, how members can enter and exit the company, and almost any other matter you might need to address.
State law won’t force your business to have an LLC operating agreement, but we strongly recommend that you take the time to set down a good one in writing and keep it in a safe place. Without a binding contract, you have much less control over what happens to your company if and when something unexpected happens.
If you choose to have an operating agreement, the good news is you don’t have to file it with the state. You can write it yourself, but unless you are a lawyer or know exactly what it’s supposed to look like, we don’t recommend that option.
A lawyer would likely charge you by the hour for drafting a Wisconsin LLC operating agreement. While that contract would likely be a good one, that could also run you at least a few hundred dollars. You can have a good one drafted, though, for as little as $39 when you use a formation service.
DBA/Name Reservation Fee — $15
Even if you like your LLC name, it might be too long or otherwise unsuitable to put on a sign or an ad. Or maybe your LLC name is too similar to the name of another business, and you want to make sure people don’t confuse them.
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
If you don’t have your LLC yet, you can also apply just to reserve the business name, and it will be good for 10 years. It costs $15 to file a statement. You can find instructions on the WDFI website for filing in person or online.
Domain Name — about $20 per year
In this day and age, small businesses need a presence on the Internet. The first step in creating a good website is to get your own domain name. While this might have been pricey in the past, it is now quite affordable.
You should secure your domain name as soon as possible, even if you don’t have plans for a website right now. If you don’t, a competitor could buy your ideal domain and its variations to block you from using them. Domain squatters also sift through newly registered LLC names and will buy their domains only to relist them with huge markups.
In general, a domain ending in .com will be more expensive than a .net or .info domain, and some names will likely be taken, meaning you will have to do some searching (and maybe compromising).
A domain name from GoDaddy.com or a similar registrar may cost you between $20 and $50 per year, with regular specials and sales where you can get substantial discounts.
Registering with the State Tax Office — $20
All new businesses should register with the Wisconsin Department of Revenue so that they can pay their taxes, like employer withholding tax and sales and use tax. For further details about any Wisconsin LLC taxes that could be due for your business, contact the Department of Revenue.
Getting an Employer Identification Number (“EIN”) — Free
An EIN is a tax ID number created by the Internal Revenue Service and assigned to a business for paying federal taxes. (Think of an EIN as a social security number for a business.)
While some LLCs don't need them, we still recommend that you get one. Many banks won’t allow your LLC to have its own business bank account unless it has an EIN. Having an EIN can also simplify the process of getting credit.
You can apply online and get an EIN for free in minutes, or you can apply for one through the mail or fax. Whatever you do, don’t pay someone else to get an EIN for you. It’s too easy to pay someone else to do it unless it is part of a broader service package.
Read More: How to Get an Employer Identification Number in Wisconsin
Foreign LLC Qualification Fees — about $100 per extra state
If your LLC does well, you may want to expand to new locations. If one of those places is in another state, you’ll have to pay to do business there. You won’t have to re-form your company, but you will have to register with the Secretary of State there and pay some extra fees.
The exact fees will depend on the state in which you are registering. As a rule of thumb, expect to pay about $100 in filing fees to register your limited liability company as a foreign LLC in another state.
Writing Formation Costs Off
Because it takes money to start your business, you can write off many, if not all, of your costs on your taxes for a deduction. The IRS has a lot of guidance on this matter, and you should compare your specific costs to the materials on the IRS website.
Keep in mind that, in most cases, a limited liability company is taxed by the IRS as a pass-through entity. Generally speaking, LLC owners can deduct up to $5,000 of their business startup expenses in the first year.
While the IRS allows an itemized deduction of business startup costs, Wisconsin does not allow itemized income tax deductions outside of its standard deduction.
According to the Department of Revenue, while there are tax credits of which a new business may be able to take advantage in the state, they are different from federal deductions. Consult with a Wisconsin account to see whether your LLC is eligible.
Kyle makes his own ice cream and wants to sell it from a food truck on the streets of Milwaukee. He figures this arrangement will work because he doesn’t need employees or restaurant space and can move the truck all over the city. He names his company Kyle’s Treats LLC but wants to use the name “Polar Bear Ice Cream” on the truck.
Kyle’s brother-in-law is giving him a truck to use in exchange for a 33% interest in profits. To keep track of money and legal arrangements, Kyle gets an LLC formation service to help him draft an operating agreement. He also designs a website that will tell customers where the truck is on any given day.
Kyle’s LLC formation costs are as follows:
- Wisconsin Articles of Organization filing fee (online): $130
- Milwaukee Ice Cream Peddler Permit (one year): $75
- Resident agent service fees: $100
- DBA fee: $15
- Operating Agreement: $39
- Web domain costs: $50
Kyle has elected to have his LLC taxed as a pass-through entity by the IRS. This means that he will claim his business income and deductions on his personal tax return.
Kyle’s startup costs, which will form his deduction, total $409. His taxable income before the deduction was $30,000, which puts Kyle in the 12% income tax bracket.
With the deduction, Kyle’s taxable income in Wisconsin will be reduced to $29,591. That saves him $49.08 in federal taxes.
Keep in mind that if Kyle had more than $5,000 in startup expenses, he would likely be able to claim those, but he could not deduct them all in the first year.
Cheapest Way to Start an LLC in Wisconsin
Now that you know all the basic costs, it’s time to shop around. Not every business needs to be formed in the same way, and you can save both time and money by picking the best option for you.
Formation Service – $39 + state fees
A business formation service is a popular and inexpensive way for new LLC owners to get started.
These companies are dedicated to helping entrepreneurs bring their visions to life. They have not only the knowledge of all the state laws you need to know, but also forms, documents, and procedures to make your life as easy as possible.
Formation services are quick and complete ways to handle formation needs for most LLCs.
- They’re easy. In most cases, a formation service will have helped hundreds of people through the exact process you are struggling with now. They have all the documents, information, and expertise you need right on hand.
- They don’t cost much. Because formation services have such a large volume of business, they don’t have to charge their clients that much money.
- They’re reliable. All of the formation services’ products and procedures have been tested hundreds of times over in the real world. That kind of experience should give you peace of mind and confidence going forward.
- They’re fast. Formation services have seen almost every business formation situation already. Chances are, they have many solutions for you that are ready right now before you even know you need them.
While formation services can be great for most people, they are not always the best choice. Some cons for these services are:
- They’re not the best solution for complex LLCs. If you are forming a complicated company or one in a heavily regulated industry, you will have concerns that probably need more focused expertise in that area of business.
- Even if a formation service is a good fit, you can expect upselling. Formation services have to make money too, and some of them may pressure you to buy formation products you don’t need. Even when you are using a formation service, you need to be a smart and informed consumer.
Using a professional LLC formation service can be a great way to set up a business. Check out our Best LLC formation services article for some of our suggestions.
Attorneys are licensed, reliable, and powerful resources for business formation. They are also quite expensive. For business formation services, most lawyers will charge by the hour, with fees that will at least cost you several hundred dollars per hour. After only a little bit of work, that means that you could have a lawyer send you a bill for well over $1000.
That’s not an effective way to spend your money. A business owner with more money, though, could benefit from having an attorney if their business was at all complicated. For that reason, some owners choose to go this route.
Despite the expense, sometimes hiring a lawyer is the best choice.
- Lawyers help you manage risk. An LLC with complicated legal issues needs a lawyer. If Kyle had wanted to start a bar instead of an ice cream truck, for example, he would have more legal and insurance issues. In that case, hiring a lawyer might make sense.
- Lawyers offer more customization when you need it. Do you need specific things put in an operating agreement? Is your company going to have a unique ownership structure? You may need an attorney to make sure these issues are handled properly.
For most people, getting an attorney comes with considerable downsides that outweigh any benefits.
- Lawyers cost more than any other option. The price tag alone should convince you that if you don’t need a lawyer, it’s not worth hiring one.
- Finding a lawyer takes a long time. Getting a lawyer who specializes in what you need, costs what you’re willing to pay, and can work with you well is a tall order.
- Lawyers also take longer to form a business than a formation service. Because lawyers are also very caring people, they will generally take much longer to form your company than non-lawyers would. Fortunately, most people don’t need a lawyer. In 90% of cases, a formation service will do just fine.
Do it Yourself
Many people, after searching the Internet for the information they need, decide to try forming their new LLCs themselves. This process can give you a lot of personal expertise, but remember that time is money. If you are spending hours on your business formation, that’s time you’re not spending on the substance of your business.
In most instances, then, it is more cost-effective to just pay an LLC formation service, with confidence that everything has been done correctly, rather than try to reinvent the wheel yourself.
- Personal knowledge. A DIY business owner will learn a lot about the process while forming their own business, and they probably will retain that knowledge for years to come.
- It costs less upfront. If you don’t figure out the value of your time, a DIY solution is the cheapest option.
- You’re losing money when you consider how much time it takes to DIY. If you figure out that your time is worth $30 per hour, and you take 20 hours to complete your business formation, you have essentially spent $600 on business formation.
- There’s the risk of making a mistake. DIY business owners can easily make a mistake with all the paperwork that then costs them more time and money.
- It’s a headache. State workers are very helpful, capable people. But they will also tell you that the laws and rules governing business formation are not easy, and they follow those rules for a living. It’s going to be even harder for you.
Annual Wisconsin LLC Fees: How Much Will it Cost to Maintain your LLC?
Even after you’ve formed the LLC, there are annual costs for which you will have to budget. These include both government fees and amounts paid to third parties, like:
- Local Business License, depending on exact location: Varies. This could be zero dollars or several hundred, depending upon your business.
- Annual report fee: $25
- Registered agent fee: $100
- Domain name: $20
The annual report is due each year during the quarter of the year when your LLC has the anniversary of its formation. For instance, if your articles were filed on February 1, you would have to file your annual report in the first quarter of each year.
Also, any small business should have an accountant. Costs for accounts vary significantly, but you should spend an average of $2,000 to $3,000 per year on an accountant in most cases.
How Much are LLC Taxes in Wisconsin
If the IRS treated your LLC as a pass-through business entity, Wisconsin will do so too and will not tax your LLC’s income directly. Instead, you will pay taxes on the amount you receive from the LLC. Wisconsin’s income tax brackets are between 3.54% and 7.65%.
If you elect to have your LLC treated as a corporation for tax purposes, your LLC will pay a flat 7.9% franchise tax.
You will likely have to pay other taxes associated with your business. For example, if your LLC hires workers, you will have to pay employment taxes. If it sells goods and services (and it almost certainly will), you'll also have to collect sales and use tax. You can learn about all of these by contacting the Wisconsin Department of Revenue.
Wisconsin LLC Formation Costs Quick Links
- City of Milwaukee — License and Permit Applications
- IRS — 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 — Information About Trade Names and DBAs
- WDFI — LLC Fee Schedule
- Wisconsin Department of Revenue — Sales and Use Tax
- Wisconsin Department of Revenue — Summary of Tax Exemption Devices
- Wisconsin Department of Revenue — Withholding Tax
- Wisconsin Department of Safety and Professional Services — A-Z Boards & Councils List
- WDFI — Online Filing (Articles of Organization)
- Wisconsin Statutes Chapter 132 — Trade Names/DBAs
Wisconsin LLC Formation Costs FAQs
How much does it cost to start an LLC in Wisconsin?
The minimum cost is $130. You must pay at least this amount to file your LLC’s articles of organization online. If you file a hard copy, the state fee will be $170.
What is the cheapest way to start an LLC in Wisconsin?
A do-it-yourself approach will have the lowest price tag, but it isn’t the cheapest in terms of your time. The best balance of price and time, for most people, is to use an LLC service for your business formation.
Do I need to hire an attorney to form an LLC in Wisconsin?
No. Most people will not need to invest the considerable expense and time of hiring a lawyer. A formation service or a DIY approach will work for most business owners.
Can I pay to form an LLC more quickly in Wisconsin?
Yes. Formation services will generally complete formation tasks faster than business owners acting on their own. For an extra $25 state fee, Wisconsin will also start to process your documents within two business days instead of five.