Deciding to form an LLC for your new or existing business is an exciting – and often overwhelming – step. There are many advantages to starting an LLC, but the bureaucracy and legalities involved can feel tedious.
While setting up an LLC in Wisconsin requires a bit of planning and effort, it doesn’t have to be complex. By taking the time to do it properly, you’ll avoid complications down the road. We’ve broken down the process into 7 simple steps to help you get started.
7 Steps to Start an LLC in Wisconsin
The easiest way to set up your LLC is through Wisconsin’s One Stop Business Portal. To do so, follow these seven steps.
1. Choose and Reserve Your LLC Name
Before forming an LLC, you’ll need to consider the name you want to register. Having a strong business name helps build brand awareness and makes it easy for customers to find you. You’ll also want to check to see if the corresponding domain name and social media handles are available, as a further consideration.
To form an LLC in Wisconsin, it’s important to have a proper and appropriate name. Under Wisconsin law, there are a few basic requirements that you must meet including:
- The name must be unique and distinguishable from any other business operating within the state. This helps prevent any confusion for customers.
- The name must include “limited liability corporation,” “LLC,” “L.L.C” – usually at the end.
- The name can’t include words associated with government agencies such as “FBI,” “CIA,” “DEA,” or “State Department.”
- The name can’t use words like “bank,” “financial institution,” or “insurance,” without proper documentation and licensure.
- The word “cooperative” may only be used by cooperative associations, formed specifically as such under the law. No other for- or non-profit business may use that term.
The Wisconsin Department of Financial Institutes (WDFI) maintains a database of existing names to help your decision. If the name you want is available, but you aren’t ready to register yet, you can reserve it for up to 120 days. You can do so by filing a name reservation application with the WDFI for $15.
2. Appoint a Registered Agent
Every LLC operating in Wisconsin must have a registered agent. A registered agent is a person or company that accepts all official documents, such as legal or tax paperwork, on behalf of the business.
The registered agent can be you or someone at your company. However, you can also hire a third-party registered agency to act on your behalf. The only requirements are that the agent must have a physical address in Wisconsin and be able to accept documents during normal business hours.
3. File the Articles of Organization
To make your LLC official, you’ll need to file the Articles of Organization with the WDFI. Though it sounds complex, it’s a simple form you can file either online or by mail. The online filing fee is $130, while the paper filing fee is $170. The process takes roughly 4-7 days, but you can expedite it for a $25 added fee.
Form 502 is the official Wisconsin form. To complete the process, you’ll need to provide the following information:
- Your proposed business name
- The name and address of your registered agent
- The management type of the LLC – single-member, member-managed, manager-managed, or foreign (out of state/country)
- The names and addresses of each organizer
- Your business’s contact details
- The name of the drafter of the articles of organization
- Signatures from one or more of the organizers
Once you’ve filled in the information, payment can be made either by credit or debit card or Automated Clearing House (ACH) payment.
4. Obtain an EIN
An Employee Identification Number (EIN) is a unique 9-digit number issued by the IRS. Most new LLCs are required to obtain this for tax filing purposes. The exception is if you are a sole-member LLC and do not plan on hiring additional staff. However, if you think you might expand in the future, it’s always a good idea to get one – it's free to do so and they don’t expire.
To get an EIN, you can either apply online, by fax, or by mail. Filing online is the fastest option and you can get your EIN in as little as 15 minutes. You’ll need to submit some basic details about you and your business, including your social security number, to apply.
5. Complete the Business Tax Registration
Most LLCs in Wisconsin cannot operate before they have completed the business tax registration through the Department of Revenue. This includes all LLC that sell taxable products or services or those withholding income tax from employees.
To register, you can complete Form BTR-101 – the Application for Wisconsin Business Tax Registration. The form is relatively straightforward and can be completed online. You’ll need:
- Your EIN or SSI (if a sole-member LLC)
- The business name
- The North American Industry Classification System (NAICS) Code – you can find this through the US Census Bureau
- What services or products your business provides
You may also need your estimated monthly sales information if your business requires a Seller’s Permit, a Consumer’s Use Tax Certificate, or a Use Tax Certificate (for foreign LLCs).
6. Draft an Operating Agreement
An operating agreement is a document that outlines the internal framework of a company. It lays out how the business functions, including who makes functional and financial decisions.
An operating agreement should lay out:
- Who has decision-making power
- How profits and losses will be divided
- Voting rights of members
- Processes for admitting new members or removing old ones
- Powers and duties of each member
Operating agreements aren’t strictly required for LLCs in Wisconsin, but they are generally a good idea. This is especially true if the LLC has multiple members. Having an operating agreement in place will protect all parties within the business, should things go wrong. Without an operating agreement, LLCs are governed by the state's default rules.
7. Understand Your Yearly Obligations
All registered LLCs in Wisconsin are required to file annual reports with the WDFI. If you fail to report, the state may choose to revoke or dissolve your LLC. Luckily, the process is simple and can be done online or by mail. Generally, all you need to do is confirm or update your LLC information, including contact details, members, and a summary of what your business offers.
When you need to file each year will depend on the anniversary of your LLC formation. Most LLCs need to file their annual reports by the end of the quarter of when they were formed. For LLCs formed:
- January 1-March 31, the annual reporting deadline is March 31
- April 1-June 30, the annual reporting deadline is June 30
- July 1-September 30, the annual reporting deadline is September 30
- October 1-December 31, the annual reporting deadline is December 31
The one exception is foreign LLCs, which must file by March 31 regardless of when the LLC was formed.
For Wisconsin-based LLCs the fee to file an annual report is $25 (+ a $1 processing fee if you file online). For foreign LLCs operating in Wisconsin, the fee is $80.
The Next Steps After Forming an LLC in Wisconsin
1. Open a Business Bank Account
As an LLC owner, it’s crucial to keep your personal and business finances separate – even if you’re a sole member. Opening a business bank account will make it easier to track your business expenses and payments. You can open a business bank account either online or in-person – you’ll just need some information about your business and usually an EIN.
2. Set Up a Payment System
Having a robust payment service provider is another crucial step after forming an LLC. You’ll want a feature-rich service that is secure and customizable – like Pay.com. Signing up is quick and easy, and once you’re onboarded, you’ll get access to a host of features.
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3. Get Business Insurance
Obtaining business insurance is an important decision to make before launching your business. Wisconsin requires business owners to have a basic liability policy in place if you operate a storefront, have more than three employees, or have a business-owned vehicle.
Even if you don’t meet these requirements, it’s generally a good idea to have business insurance anyway.
The type of insurance you need will depend on the nature of your business. For example, commercial property insurance can safeguard against fire or theft or general liability insurance can cover accidents or mishaps. You can also choose policies that also provide support in case of injuries or illness to you or your staff.
The Bottom Line
Forming an LLC in Wisconsin is a crucial step for running a successful business. The process is not particularly difficult or expensive and helps add structure to your business. Even if you are a sole member, having an LLC adds professionalism to your business and protects your personal assets.
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