Fact checked for accuracy by Billie Anne Grigg, a bookkeeper and Mastery Level Certified Profit First Professional.
Limited liability companies are one of the most commonly formed business types in the United States as they provide limited liability protection and flexibility. If you are a new business owner in Wisconsin, and you aren’t sure how to form an LLC, you’re in luck.
In this article, you will find a step-by-step guide on how to form an LLC in Wisconsin on your own as well as everything else you need to know about forming an LLC.
Step 1: Choose a Name For Your LLC
Choosing an appropriate name for your business is the first step to forming an LLC in Wisconsin. When deciding on what name to use, keep the following naming rules in mind to ensure your application is successful the first time.
- Your chosen name must include one of the following: Limited Liability Company, LLC, L.L.C., or Limited Liability Co.
- Your chosen name must be entirely unique from others and cannot be used if already registered with the Wisconsin Department of Financial Institutions. An online search of the database can be done here.
- Your chosen name cannot contain words that are used to describe government or military institutions.
It is also worth checking to see if the domain name is available for your chosen business name. You don’t want to have to go through all of the steps of forming your business only to find out that you can’t create a website with your business name!
If you are not yet ready to proceed with the LLC application, there is an option to reserve your chosen name for up to 120 days. To do this you will need to complete Form 1 and mail it.
In Wisconsin, there is the option to operate your business under a different name, this is known as “doing business as” (DBA) or a fictitious name. To apply for one of these, you will need to complete an application form and can either apply online or by mail.
Step 2: Appoint a Registered Agent
Every LLC in Wisconsin is required by law to appoint a registered agent for their LLC. A registered agent can either be a Wisconsin resident or an entity authorized to do business in the state. Your registered agent will be the contact person between your business and the state. They will handle all administrative tasks on behalf of your LLC, including legal mail, court summons, and other important documentation.
Your chosen registered agent must have a physical street address in Wisconsin and must be onsite every day during regular business hours to accept any mail or documents on behalf of your LLC.
Step 3: File the Articles of Organization
Your LLC is officially formed when you file the Articles of Organization to the Wisconsin Department of Financial Institutions. You have the choice of submitting the Articles either by mail or online.
Both filing methods require a nonrefundable fee to be paid to the state for the application to proceed. Filing by mail will cost $170 whereas filing online will cost you $130.
The Articles of Organization will include the following information:
- The name of the LLC
- The name and address of the chosen registered agent
- The management structure of the LLC
- The name and address of all the members of the LLC
- The contact details of the LLC
- The signature of the organizer
- The signature of the person who drafted the article
Once the state has processed your application, they will either reject or accept it. If accepted, you will be issued a certificate declaring that your LLC is officially formed.
Step 4: Get an Employer Identification Number (EIN)
The Employer Identification Number or EIN is a nine-digit number that is issued by the Internal Revenue Service free of charge. This number is used to identify a business for tax purposes and is used to manage and pay taxes, open bank accounts for the business, as well as hire employees.
You can either apply online or by mail.
If you are a sole member of an LLC, getting an EIN is not a requirement. However, it is recommended you apply for one anyway as it may come in useful in the future if you decide to open a business bank account or hire an employee.
Step 5: File Your Annual Report
All LLCs in Wisconsin are required by law to complete and submit an annual report. This report serves to keep all information about the LLC up to date with the state. This report must be completed online each year.
The annual report is due at the end of the quarter of the month the LLC is formed. The quarter due dates are March 31st, June 30th, September 30th, and December 31st. So, if your LLC was formed on November 2nd, your annual report will be due each year on December 31st. The state will also send a reminder to your registered agent.
There is a fee of $25 to file your annual report.
Cost to Start an LLC in Wisconsin
There are a couple of costs to consider when starting an LLC in Wisconsin. At the very base level, you will at least need to pay the Articles of Organization fee, which is $130 or $170 depending on whether you apply online or by mail. If you decide to reserve your name before you file your Articles, this will be an additional $15 or $25 for expedited service. And finally, you will also need to pay any registered agent fees if you hire a registered agent service.
What To Do After Forming Your LLC in Wisconsin
Congratulations on forming your LLC in Wisconsin! However, there are still a number of things that need to be done to ensure that your business runs successfully and meets all state requirements.
Create an Operating Agreement
Creating an operating agreement in Wisconsin is not a legal requirement but is a smart business decision. Think of your LLC’s operating agreement as a map or manual for running your business. There are a few different ways to draft an operating agreement. You can draft one yourself, download a free template online, or even hire a lawyer to draw one up for you.
An operating agreement is a good thing to have in the event that you are involved in a legal dispute, whether in court or not, as all decisions will be based on what information was provided in the agreement.
While there are no rules on what needs to go into an operating agreement, below you will find a list of the basic information you should include.
- The contact details of the LLC
- A summary of what was included in the Articles of Organization
- The name and contact details for your registered agent
- The management structure
- The names and contact details of all members of the LLC
- The way profits and losses are divided in the business
- All the procedures for discipline, dismissals, and hiring
- The signatures of all members of the LLC
Obtain Relevant Business Licenses
Depending on what type of business you have and its location, you may need to apply for relevant business licenses and permits. Go to the Department of Safety and Professional Services website to check what state licenses you may need for your particular business. Your LLC may also require local licenses. To check if you may need any local licenses, consult your local city clerk.
Get Business Insurance
Investing in decent business insurance is highly recommended. Most small businesses generally start with a general liability insurance policy. Speak to a professional insurance broker to see which policy will suit your business best.
Open a Business Bank Account
Separating your personal assets from your business assets goes a long way in protecting your own assets from any potential issues that may arise with your business. But more than that, opening a business bank account can make it easier for you to take care of your company’s finances. You and your accountant will be glad for a separate business account come tax season.
Get Legal Advice
If you have any doubts at all at any point while running your business, consult a business attorney. They can help ensure you don’t make any costly and legal business mistakes.
Hire an Accountant
You can either put one on your payroll or hire a third-party accounting firm. You can avoid tax and financial issues that may pop up by hiring someone else to take care of the monetary side of the business. In doing so, you can focus on the bigger picture of growing your business instead.
How to Keep Your LLC Compliant in Wisconsin
Keeping your LLC compliant is an important part of being a business owner. By not keeping your business compliant with the state of Wisconsin, you run the risk of your business being dissolved.
Here are some ways to keep your LLC compliant in Wisconsin:
- File the annual report before the deadline and pay the annual fee.
- Manage and pay both state and federal taxes on time.
- Report all new hires to the Wisconsin New Hire Reporting Center.
- Ensure all licenses are up to date.
- Keep up to date with state regulations and changes made to them.
- Maintain your registered agent.
Tax Filing Requirements for LLCs in Wisconsin
LLCs are automatically considered pass-through entities, meaning the LLC itself does not pay any taxes. Instead, the members of the LLC will report their income through their own personal income tax returns. Although there are no specific business taxes you will need to take care of, there are a couple of tax requirements that may be applicable to you and your business.
The first is sales tax. Businesses that have a seller’s permit will need to submit regular tax returns to the Wisconsin Department of Revenue (DOR). The second type is employer taxes, which are only applicable to businesses that have employees. Your employee income taxes will need to be withheld and paid to the DOR regularly using Form WT-6. In addition, you will need to pay unemployment insurance taxes.
Tax filing requirements can be complicated at the best of times, so it may be in your best interest to speak to a professional if you have any concerns or questions.
Frequently Asked Questions
How long does it take to register an LLC in Wisconsin?
If you file your Articles of Organization online, they are processed immediately and the documents can be downloaded instantly. On the other hand, mail filings can take around 5 business days, but this does not include any mailing time.
If you file by mail, you can pay an extra $25 to have your documents processed in one business day. But if you want your LLC formed as fast as possible, you should file online.
What tax structure should I choose for an LLC in Wisconsin?
In Wisconsin, all LLCs are automatically assigned the pass-through entity tax structure, regardless of whether you are a disregarded entity (single-member) or a partnership (multi-member). This is a preferred tax structure for many as the LLC will not pay any federal income taxes, rather the members will through their personal tax returns.
The pass-through entity tax structure is the most commonly used due to its simplicity and lack of double taxation.
However, in some cases, it is advantageous to have your LLC taxed as a corporation instead.
Deciding what is the best tax structure for you and your business can be complicated, so consult a business attorney or accountant for the best advice.
Should you hire an LLC formation service in Wisconsin?
Forming an LLC in Wisconsin on your own is very easy and affordable, so it is not a requirement to hire an LLC formation service. However, hiring an LLC formation service could be advantageous to business owners that would prefer to pass on the paperwork to someone more knowledgeable. Many LLC formation services also offer registered agent services, so you could kill two birds with one stone.