Having a Wisconsin LLC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in Wisconsin.
On this page, you’ll learn about the following:
- How to Start an LLC in Wisconsin
- After Starting your Wisconsin LLC
- Wisconsin Foreign LLC
- Why an LLC in Wisconsin
- Best Businesses in Wisconsin
- Wisconisin LLC Formation Review
How to Start an LLC in Wisconsin
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. This section gives you a step-by-step guide on how to start an LLC in Wisconsin.
Step 1: Decide a Name for Your LLC
Deciding on a business name is the first step to start an LLC. In Wisconsin, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the Wisconsin business naming requirements. Once you pass through them, you can successfully name your business.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, Wisconsin. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in Wisconsin. The cost of a name reservation is $15.
Important Quick Links:
Wisconsin Department of Financial Institutions
4822 Madison Yards Way, North Tower
Madison, WI 53705
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Step 2: Assign a Registered Agent in Wisconsin
A registered agent, (or agent for service of process) is a person/business entity that will act or work on your behalf. This person or business will do things like filing services and receive significant tax forms, legal forms, formation documents, a notice of lawsuits, and other official government correspondence in Wisconsin. Choosing Wisconsin-registered agents for your LLC is required.
Make sure your registered agents are residents of Wisconsin. It could also be a business. Here are the recommended agents and employees for you:
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Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Wisconsin. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Articles of Organization in Wisconsin
A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the Wisconsin Secretary of State, which costs $130 online. You may file them online or by mail.
This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Wisconsin, like if it is a member-managed or managers-managed.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Wisconsin LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county. To know more about online filing, visit the Wisconsin Certificate of Formation.
How to File by Mail
If you prefer filing real-life forms for your Wisconsin LLC registration, then you can download the Wisconsin Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others, your name, city, state, zip code, and signature. You may also file in person by visiting the office on business days.
Mail To: State of WI – Dept. of Financial Institutions
P.O. Box 93348
Milwaukee, WI 53293
Step 4: Create Your Wisconsin LLC Operating Agreement
An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to an LLC operating agreement Wisconsin does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve Wisconsin LLC later.
Step 5: Filing a Wisconsin LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
And that’s all! Congratulation, you are now done with all the necessary steps to form your Wisconsin LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
After Starting your Wisconsin LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Wisconsin business permits & licenses
- Get liability for business and professional liability insurance with coverage for employees
- File a Wisconsin LLC annual report or biennial report
- Already existing LLCs that wish to operate in Wisconsin must register as Wisconsin foreign LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Wisconsin Foreign LLC
To register a Wisconsin foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, Wisconsin. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check Wisconsin Foreign LLC to know more about having a foreign LLC.
Why an LLC in Wisconsin
Wisconsin is a popular state in the United States today. Not just being the ‘Dairyland’ of the nation, but also for its strong economy. Also, the state is the heart of food businesses. The state has more than thousands of active LLCs at this moment operating in different locations. Lately, the state has become one of the favorite spots for small and new businesses for its vast tax benefits and incentives. Along with the reduction in tax liabilities, the state offers various business funding options. Some of the benefits are discussed below,
Wisconsin Enterprise Zones – Tax Credit
If a limited liability co. Starting its operation in Wisconsin Enterprise Zone or expanding the existing business, the LLC can enjoy huge tax benefits. The Wisconsin Economic Development Corporation has initiated this program under which existing and new businesses will get tax credits and other benefits. Job creation projects, development projects, and such projects will get the advantage of this program.
Development Opportunity Zones – Tax Credit
Another program Wisconsin offers is the DOZ tax credit. Under this program, if a Wisconsin limited liability company starts its operation in Beloit, Janesville, or Kenosha, it may receive tax benefits. If your LLC involves job retention, job creation, development of stressful areas, and high capital investment in such areas, then you may enjoy the credits and incentives.
A certain type of business in Wisconsin gets freed from sales and use tax. As a start-up, if you operate businesses like manufacturing materials and equipment, pollution abatement, waste management, recycling materials, equipment, etc., you might get freed from the tax.
Flexible and Easy Profit Distribution
Unlike a partnership, the profit distribution in LLCs is not equal or 50%. The profit-sharing in Wisconsin LLCs is flexible and depends on the amount of contribution by each member. Also, it is much easier to file Wisconsin LLC documents if you have a registered agent to lend a hand.
Best Businesses in Wisconsin
If you have decided to form an LLC in Wisconsin, it must be the best decision to see the state’s business environment. But before you take any business decision, you should know the state’s overall economy and its top businesses. In the below-mentioned detail, you will get an overview of the following.
Agriculture based businesses
The state is known to produce around 26% of the nation’s cheese with the help of more than a million cows present in the state. More than 8,000 licensed dairy farms in the state produce around 3,37 billion cheeses in a year, with the help of which dairy farms alone have earned $5.4 billion.
Apart from dairy businesses, the state has the best in the class production of potatoes and corn. The state has around 68,700 farms contributing a total amount of $104.8 billion to the state GDP.
Manufacturing is the state’s biggest business industry, which is contributing more than $63.31 billion to the state. There are more than 7,737 active manufacturing firms in the state that are employing more than 475,000 workers. Top products that are manufactured in the state are:-
- Fabricated Metal Products
- Paper industry food and Beverages
- Tobacco products
- Computer and electronic services
- Aerospace equipment
All of these business firms provide 44% of employment to the state’s working population. Also, manufacturing has exported around $21.24 billion of goods, most of which are produced by small businesses.
The healthcare sector accounts to have produced around 92,930 jobs in the state. The healthcare industries have exponential growth, which is shown with the help of health insurance rates. More than 87% of people own health insurance, and the industry mainly aims to provide insurance to low-income families.
Some of the small income businesses that are running in the state are:-
- Health and beauty care business
- Automobile repairing business
- Sports and recreational business
Wisconisin LLC Formation Review
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Just to recap, here are the easy steps again when forming an LLC in Wisconsin. Click on the steps in this list to read the full detail.
- Name your Wisconsin LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a registered agent
In Wisconsin, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
If you are a resident of Wisconsis, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $130 (domestic LLC) and $100 (foreign LLC), LLC costs in Wisconsin include $25 for Annual Reports every year. LLCs are liable to pay sales tax of 5% every year.
It takes no time (immediately) to get a Wisconsin LLC if you file it online. For the mail filing, it takes 5 business days to get an LLC.
Every year all the LLC have to submit an Annual Report and pay $25 to the Wisconsin Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
Having an LLC is easier than other forms of business. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. On the other side, the formation of LLCs requires less paperwork and fewer legal complexities. If you have any questions, leave a comment below.