Wisconsin LLC: Everything You Need to Know
Forming a Wisconsin LLC involves several steps and rules8 min read
Forming a Wisconsin LLC involves several steps and rules. Start by considering what to name your Wisconsin LLC. It takes research to do that. Create a list of possible names that reflect what your business will be about and would be easily searchable by possible clients.
The state of Wisconsin has guidelines for naming a LLC. Whatever moniker chosen the guidelines state it will end with the words Limited Liability Company, or the acronyms LLC or L.L.C. Be aware in Wisconsin some restriction exists on using some words such as Attorney, Bank, University, etc. Those particular words have an association with licenses and other statutes, and unless an owner has those particular certificates, they cannot use those words in a business name.
Other restricted words include making business names similar to state or federal agency names such as FBI, Treasury or Secret Service. After creating a list of possible names visit the State of Wisconsin website and do a name search. Your business name cannot duplicate another business entity. It must be unique.
Once a name becomes decided reserve a domain name using it on the internet. This establishes a business presence quickly and protects anyone else from using the name in that venue. Even if the business has not had time to formally organize you can reserve the name for a time by paying a $15 filing fee plus mailing a document by mail. Then create an email address using the business name.
Choosing a Registered Agent
To begin formalizing the Wisconsin LLC further begin by nominating a Registered Agent for your enterprise. A registered agent defines as a person that agrees to receive and send legal papers for the LLC to individuals and agencies. It will include filing documents for the state and even service of process of legal action. The state of Wisconsin requires a registered agent to be a resident of that state or an entity designated to transact business in the state of Wisconsin. They or the entity must have a physical street address in the state of Wisconsin. An owner can be the registered agent.
File the Articles of Organization
Further formalization of the Wisconsin LLC continues with creating the Articles of Organization with the State of Wisconsin. Filing the articles of organization has the option of mailing a document or filing online. The costs list as $170 by mail and $130 online and those filing fees remain non-refundable. Parameters list as:
- File in duplicate
- Must have LLC’s name and address
- Name and address of the registered agent
- Name, address, and dated signature of organizers
- Name of the drafter of the articles
At this point make the decision if your business LLC will become member-managed or manager-manager style. If you happen to have an LLC in another state and you wish to expand to the state of Wisconsin, then the process of switches to filing for a Foreign LLC.
The operating agreement in Wisconsin has not been required to be filed with the articles of organization. Most giving legal advice recommend business owners do this process anyway since it holds up well during a dispute in court. The operating agreement as a legal document delineates the ownership and lists how your particular business will operate. The registered agent must keep the document on file. For a Wisconsin LLC with more than one member, the advice remains to have an operating agreement among members.
EIN stands for employee identification number or Federal Tax Identification Number. It identifies a business entity with the USA government. It can be given in lieu of an individual’s Social Security number. One of the function of EIN remains separating business processes from individual accounts, therefore, protecting an owner’s assets. Obtaining an EIN allows the filing of state and federal taxes of a business. Not having it means an individual would have to use their Social Security number to file and all liability and taxes would become the responsibility of the that individual. Even if you do not plan on hiring employees for an LLC, you must obtain an EIN. When opening a business account with a bank will require an EIN. Apply for an EIN online or print the form from the IRS site and mail.
After registering begin exploring business accounts at banks. Obtaining a business bank account begins the separation process between an owner’s personal assets and the business assets. This gives much personal asset protection. As an added bonus, it makes accounting and tax filing an easier process.
Next, apply for a business credit care that allows recording of personal and business expenses separately. This build’s a credit history in a business’s name rather than an individual’s name. At some point, you may need investors, and a business credit history may prove useful in that.
Covering Employees and Products
Wisconsin requires registration for Wisconsin Unemployment Insurance in the Department of Workforce Development. In the State of Wisconsin Department of Revenue register for Employee Withholding Tax. A business owner can use the DOR Taxpayer Access Point known as TAP online or uses form BTR-101 Application of Business Tax Registration. If the business has taxable goods or services in Wisconsin also register for Wisconsin Sales Tax with the Department of Revenue. Check on the Workman Compensation Insurance. Depending on how an employee becomes classified determines if this type of insurance becomes needed. Though not required a general liability insurance may be needed as well to protect assets.
Tracking income, expenses and bills make up the transactions of LLC business finance. Well, managed it can make an owner aware of trends in the business to make decisions that maximize profits. Best of all it simplifies the annual tax filing. Find a software that matches your business needs. A feature that helps make it run efficiently and smoothly remains that accounting software that synchronize with the bank automatically. Make sure the software correlates transactions to invoices, purchase orders, and bills. If the software gives phone access so much the better.
For Federal regulations on a business visit the U.S. Small Business Administration (SBA). On the website are guides for federal business permits and licenses for different industries. For state government regulations use Wisconsin’s Department of Safety and Professional Services to discover licenses, registration and permits needed. For local requirements use the Local Chamber of Commerce. Professional services exist that can do the research for a business owner of an LLC. Each state has its own variant of requirements for LLCs so when expanding be sure to check requirements for that state.
A developing trend has been short classes provided on business licenses and permits. Explore those and find some help. Other legal obligations include annual reports, biennial reports, and state taxes.
Hiring employees has a whole set of parameters to meet. It begins with assuring the employee has eligibility to work in the U.S. Other things to consider remain as:
- Classifying employees as new hires in the State of Wisconsin
- Providing Workman’s Compensation Insurance
- Withholding Income Tax
- Print and Install Compliance Posters
- Payment of Employees
Develop policies and schedules for each area.
Summarizing the Steps to Creating a Wisconsin Business
Taking an overview of the process will help new business person breathe easier. Getting lost in the details can bring frustration. Looking at the overall areas of developing a Wisconsin LLC helps.
- Create a suitable business idea
- Analyze the idea
- Make a business plan
- Formally organize the business using the LLC structure
- Acquire business license, permits, and register with the state in all areas
- Open a business bank account
- Build a website and decide on your brand
Using the larger organization pattern lets a business owner break up the needs into smaller increments at create a business at their pace. It helps delegate some of the responsibility to other members.
Maintaining an LLC
The initial flurry of activity will seem to last forever, but soon the business will become operational and move into a different mode. It becomes about implementing the daily routine and less about permits and licensing.
After a while, a business owner realizes some maintenance items must happen for the business to be fully taken care of. In Wisconsin maintaining a business means filing periodic reports to keep the business in good standing. Wisconsin requires LLC s to file online annually with the Wisconsin Department of Financial Institution. It can also become mailed, but the recommendation remains online. It has a due date by the anniversary date of the LLC formation date that is nearest the calendar quarters of March 31, June 30, Sept. 30, and Dec. 31. A LLC formed in Sept. 15 will have a Dec. 31 report.
The notice from the department will come to the LLC’s registered agent. It will have instructions to use the online filing form. The fee for annual reports list as $25 for a domestic in state LLC and $80 for a foreign LLC as in out of state. If an annual report does not become filed, then the state of Wisconsin dissolves your LLC within the next year for failure to file. Many thousands of LLC businesses become suspended on dissolved this way.
The problem with that becomes the owner may unknowingly lose their limited liability protection putting their personal assets at risk. The duties of a registered agent involve preventing late filings and submitting reports. Owners should check if the registered agent has performed the duties. A foreign LLC means a company who most likely has expanded into another state.
The foreign LLC may need to check how the annual franchise tax or business tax works on their entity since it their business now covers two states. Wisconsin no longer requires that tax be paid to the state, but it does not relieve the responsibility in the other state. As a pass-through entity, the LLC itself does not pay income tax, but the individuals do once they receive a profit. If an LLC crosses state lines, then the LLC may need to report income to the appropriate states so keep a record and the information clear. In Wisconsin, multi membered LLCs must file a partnership income return form 3.
Certificate of Good Standing
These certificates certify that the LLC is well run and often are used to obtain investor monies. The certificate certifies proper maintenance and formation happened. Wisconsin chose the name for the certificate as Certificate of Standing. Other reasons to obtain the certificate include forming a foreign version of the LLC in another state, renewal of specific licenses or permits, and getting funding from banks.
Dissolving a Wisconsin LLC
If the business fails, do not let it fade away. A process exists to dissolve the business officially. Tax liabilities and penalties remain possible if the business does not dissolve. An owner can remain legally liable. Check with members and close the business accounts and file an Article of Dissolution.
Foreign LLC in Wisconsin
As referred to earlier out of state LLCs operating in Wisconsin earn the moniker foreign LLC. These LLCs also register with Wisconsin Department of Financial Institutions. The application resides online or can become mailed. Just like a domestic LLC, a registered agent becomes appointed for the foreign LLC. Begin by filing a Foreign Limited Liability Company Certificate of Registration Application form 521 with the Wisconsin Department of Financial Institutions.
The fee costs $100.If the foreign LLC name has been taken in Wisconsin, do not give up. File for a fictitious business name in the state and register. Then file a Name Registration Application Foreign Corporation or Foreign Limited Liability Company annual form 1-R with the Department of Financial Institutions for $50.
Every year the foreign LLC must file the new name since it expires every Dec. 31. It can become renewed between Oct. 1 and Dec. 31. Same process as before just labeled a renewal. Now your companies across state lines can operate as if one entity in different jurisdictions.
Summarizing How to Start an LLC in Wisconsin
Wisconsin has state specific requirements follow those and ask questions. The process remains long but obtainable.
Know that the processing time for LLC s documents and filings average about five business days upon receipt of the documents. IF high volume occurs then that time of return will become delayed so leave plenty of time for obtaining the documents. For an additional fee, expedited service does exist. Be aware Wisconsin does treat LLCs more like a corporation than a sole proprietorship, but the Federal classification remains a key difference on handling tax monies. An owner opts in on what tax responsibility to do. Depending on services rendered other fees and taxes may apply.
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