How to Start an LLC in Wisconsin
Forming an LLC in Wisconsin? The state has specific requirements for starting a business. Find the forms and information you need to get started.
Starting an LLC in Wisconsin
We highly recommend before you begin the registration process for an LLC in Wisconsin, it’s important to know what an LLC is and whether or not it is a viable business structure for your company, so be certain to read up on the definition and benefits of an LLC.
What is a limited liability company?
The acronym LLC stands for limited liability company. In Wisconsin due to the business structure of an LLC it offers the personal liability protection of a corporation with a pass-through taxation of a sole proprietorship or partnership.
By forming a Wisconsin LLC for your business you are creating a great way to protect your personal assets in the event of your business being sued. This is one of the most popular reasons that people will opt for an LLC.
An LLC can be owned by a single individual or can be owned by more than one person. An Wisconsin LLC with one member who is known as a single-member LLC if your LLC will have more than one owner it will be known as a multi-member LLC
These steps will guide you through the LLC registration process with the Wisconsin Department of Financial Institutions:
1. Selecting a Name For Your New Business
Decide on a name for your business. You can choose any name for your LLC as long as it ends with “Limited Liability Company,” “Limited Liability Co.” or any variation of its abbreviation—e.g., LLC or L.L.C.
A name may be reserved for up to 120 days. You must file a name reservation application with the Department of Financial Institutions. All requests must be accompanied by the filing fee. Be sure to include the name to be reserved and the applicant’s name, address and dated signature.
You may also have a preferred name checked for availability by accessing the Department of Financial Institutions website.
2. You Need to Assign a Registered Agent
Assign an agent for service of process. This is also referred to as the resident agent. Your registered agent will recieve all communications sent to your company on your behalf.
3. Get Your Company EIN Number
3. This step may not be needed if you are a single owned entity. You will apply for an Employer Identification Number (EIN) from the IRS. If there are two or more members in your LLC, your company will need to obtain an EIN from the IRS, for tax purposes.
4. Write an Operating Agreement
Create an LLC operating agreement. Although not required that you have a limited liability company operating agreement, it is wise to have one in place with other members should your LLC have more than one member. The State of Wisconsin recognizes limited liability company operating agreements as governing documents.
This agreement can be thought of as an instruction manual for the members of the LLC as it will outline responsibilities and duties for each member. This can then be referred to if any issues arise within the organizational structure of the company.
5. Understand Your Legal Obligations For Your New Company
Familiarize yourself with the LLC’s continuing legal obligations, specifically annual reports, which are required by state law. Reports may be filed online or by mail. Registered agents are notified by mail as to when the reports are due. Generally, reports are due every year by the end of the filing anniversary quarter. There is a filing fee that must be paid upon filing of the reports with the Department of Financial Institutions.
Make sure that your LLC, should it offer professional services, meets state legal requirements. These could be, but are not limited to, state taxes, annual or biennial reports and so on.
Filing an LLC and Taxes
Following are the forms and fees that are required when starting an LLC in Wisconsin:
1. Forms. Complete and submit Articles of Organization, along with the required filing fee, to the Department of Financial Institutions.
2. Limited liability company operating agreement. Although the LLC operating agreement will not be submitted to the Department of Financial Institutions, it is a good idea to have one in place for LLCs with more than one member. This document should be kept on file by the registered agent.
3. Taxes. LLCs in Wisconsin are treated as corporations, limited liability partnerships or single-member LLCs and are subject to federal income tax classifications. Depending on the type of taxation you opt to have for your LLC, you will have different federal tax responsibilities.
You should always make sure to educate yourself with the state laws regarding taxation. Your LLC may be subject to other taxes depending on the kind of services it offers. We always recommend you consult a professional.
Frequently Asked Questions About LLC’s
What are the articles of organization?
Articles of organization for your LLC refers to the legal document that you will submit to the state within which you are forming your LLC. This document will outline such items as your legal entity name, the purpose of the business and also the registered agent name and address. These are also often referred to as the certificate of formation or certificate of organization.
How will an LLC be taxed in Wisconsin?
One of the advantages and attractions of an LLC is called pass-through taxation. Meaning that the profits generated by the LLC will “pass-through” to its member/s. Your accountant will issue each member with a K1 who then reports the additional income on their personal taxes.
Checking with your state is always advisable as although LLCs are pass-through entities, there are several types of state-level tax that may still apply to your LLC and should be researched.
Wisconsin and County Sales Tax
Selling taxable goods or services, you will need to register for a seller’s permit and collect sales tax on behalf of your state.
Is your new company selling goods or services that will be taxed in your state? If so then you will need to register with the state so that you can pay your sales taxes that you will be collecting on each sale. These again depend on your state and will be broken down into state and county fees that will be paid monthly or quarterly depending on your state of registration
What are the main benefits of an LLC?
The main benefits of an LLC and why it is a popular business entity are as follows.
An LLC offers the liability protection of a corporation with the benefit of pass-through taxation. In addition to this an LLC is affordable and very easy to maintain. Making it the most popular of business entities.
How quickly can I form an LLC in Wisconsin?
Following registration guidelines and processing everything yourself will take approximately -3 weeks depending on your state of registration. Also varies from state to state.
Can I fast track my Wisconsin LLC formation
Many states offer same-day or expedited LLC formation for an extra fee. You will also find many services and law firms that also offer same day rush services.
Do I have to have a lawyer from my Wisconsin LLC?
Short answer NO. However you are starting a business and like everything you need the right foundation in order to be successful. You may well find it better to hire a professional firm or lawyer to form your LLC. Sometimes it’s best to stick to what you do best and let the pro’s do the rest.
Do Wisconsin LLC’s have a board of directors?
Short answer NO they do not. LLC’s are managed by their owner, members or the managing member. They do not have shareholders like a public company.
Can an LLC in Wisconsin have shareholders?
No, an LLC is owned by its members; it is not a publicly traded company and therefore does not have shares to sell on the stock market. Being owned by its members the profits are split as per written in the operating agreement.
How do I get paid from my LLC?
How you get paid depends on the decision of how the LLC will be taxed. In a single-member LLC (SMLLC) or multi-member LLC (MMLLC), you can pay yourself:
With a distribution that passes through to your individual tax return
With a salary and distribution as an S corporation (S corp)