Wisconsin LLC (Guide) – Starting an LLC in Wisconsin, Pros & Cons

Get Professional Help In Forming a Wisconsin LLC

People who are forming their business for the first time may question what is the best state to form their LLC in. Although the formation process in most states is similar, all have slightly different specifications and requirements. In most cases, the LLC should be formed in the state where your business will be located. For example, if your business will be located in Wisconsin, then you should also form your LLC in Wisconsin.

There are many reasons you might want to consider forming your LLC in the state of Wisconsin. For a start, the state has a steadily growing economy and every year is forming thousands of new LLCs that help the economy grow even further.

What is An LLC?

As a new business owner, you may have heard of the term LLC, and for good reason. The term stands for Limited Liability Company, and is currently one of the most popular US business structures available to business owners. It comes with a range of benefits such as being relatively easy to set up, offers personal liability protection, and has the benefit of pass through taxation. Essentially it is all the good bits of other business structures rolled into one.

You can have an LLC that is owned by just one person, or an LLC that is owned by multiple people, which are called ‘members’. These are known as either single member LLCs or Multi-member LLCs.

For many small business owners, it offers the perfect combination of simplicity and personal asset protection. There are relatively few restrictions about the ownership and management of the LLC.


Wisconsin LLC Pros and Cons

Pros of a Wisconsin LLC

  • An LLC formed in Wisconsin has the benefit of being able to choose to distribute profits in different ways, which is different from a partnership where the distribution has to be 50-50.
  • There are no corporate or franchise taxes in the state of Wisconsin imposed on LLCs.
  • It is one of the top states in the nation for wage growth.

Cons of a Wisconsin LLC

  • The state has high corporate taxes compared to other states. It tends to be on the higher end of the national scale.

How to Form an LLC in Wisconsin

Forming an LLC in Wisconsin is pretty easy, as you’ll follow general steps that are similar to most other states, with just a few differences. Follow the step by step guide below and form a Wisconsin LLC to get your business up and running.


Step 1: Pick a Business Name for Your Wisconsin LLC

Choose-Your-Business-Name

Like all states, Wisconsin has some guidelines when it comes to picking a business name, and you can’t just choose anything that takes your fancy. It is a very important step as you have to make sure that it complies with Wisconsin regulations, or it will not be accepted by the state. You should also ensure that it is easily searchable by potential clients, so it is usually a good idea to pick a name that reflects the type of business that you are going to be running.


Naming guidelines for Wisconsin

  • The name of your LLC must contain the words ‘limited liability company’ at some point, or alternatively, you can choose one of the abbreviations such as LLC or L.L.C.
  • You should make sure that your business name does not contain any words that mean that it could be confused with a government agency such as terms like ‘State Department’, ‘FBI’, or ‘treasury’. There are several terms on the list, so you should check with the state for the full list before you come to a decision.
  • There are other restricted words such as ‘Bank’, ‘Attorney’, and ‘University’, so if you choose to use any of these, then there might be some additional paperwork involved, which can be time consuming, or you might need a licensed individual to be a part of your LLC.
  • One of the most important requirements is that your business name needs to be distinguishable from other LLCs in the state, or any corporation, limited liability partnership or limited partnership.

The process to find out if your chosen business name is available is very simple and free. You can do a simple name search using the Business Entity Search with the State of Wisconsin. You’ll be able to quickly and easily see if the name has already been taken or not.

See if the domain is still available for your business

At this point, it may be a good idea to also see if the URL for your business name is still available, as this is key for if a potential customer is looking for your business online. Even if you are not planning on making a business website right away, then it is still a good idea to purchase your web domain at this stage if it is available, so that others do not take it before you get the chance to.

Get a DBA name

Not all businesses need a Doing Business As name, but some may benefit from it. It can serve as your company’s brand name, or if you want to branch out part of your company to do something else. This doesn’t have to be done at this stage of the process. 


Step 2: Choose a Registered Agent in Wisconsin

Registered-Agent

All LLCs in the state of Wisconsin are required to have a registered agent. A registered agent is either an individual or a company that is in charge of receiving important legal documents on behalf of your business. Eventually, they are the connection between your business and the state. Who can be a registered agent for your business is pretty flexible. It can be yourself, someone you know such as a friend or someone else in the company, or a registered agent service provider. The registered agent service needs to be authorized to transact business in the state. As long as they are over 18 and be a resident of Wisconsin, chances are they can be your LLCs registered agent.

Some people do decide to be their own registered agent, but this can be quite restrictive and time consuming, as you always have to be available during business hours.  


Step 3: File the Articles of Organization

Articles-of-Organization

For many people, this may seem like the most important part of the Wisconsin LLC formation process, as you’ll actually be filing your Articles of Organization to the state. The articles will need to be filed with the Department of Financial Institutions. This can be done either online or by mail. If you are filing by mail, then you should download the form to fill out before posting it.

There are fees involved with filing your Articles, regardless of if you are filing by mail or online. Online costs $130 while mail is slightly more expensive at $170, and these are payable to the Department of Financial Institutions.


Step 4: Create an Operating Agreement for Your Wisconsin LLC

Operating-Agreement

Not all states actually require you to have an operating agreement, and Wisconsin is one of those states, although it is still very much advised. It is good practice to have one, and can come in handy further down the line, especially if your business comes to an end or you need to settle a dispute.

An operating agreement is a legal document, and it outlines all the operating procedures of the LLC, as well as the ownership of the LLC, such as details about the business owners. They can help to ensure that all the owners of the business are on the same page about the business and agree on how it is run. As this is a legal document, it needs to be signed by all the owners, and then if there is a dispute in the future, this can help to settle matters carefully.

As the operating agreement is not required by the state, you don’t actually have to file it. Instead, it is an internal document that you should keep with your other important business documents.


Step 5: Get an EIN

EIN-Employee-Identification-Number

Most businesses (including LLCs in Wisconsin) should have an EIN, which stands for Employer Identification Number. There are several reasons a business would need an EIN, such as if you want to open a business bank account, if you need to hire any employees or file and manage Federal and State Taxes.

The process of getting an EIN is simple and quick. You can get it for free from the IRS, and it can be done either online or by mail. If you apply online, you should very quickly get your 9 digit number. They are used to help identify the business for tax purposes, much like how a social security number works.

Apply online for your EIN here, just follow the simple application steps and you’ll be provided with your number.


Step 6: Steps to Consider After Creating Your Wisconsin LLC

Bank-Account-and-Credit-Card

Those are the main stages that are needed when forming an LLC, but the work is not yet done. Once that LLC has been formed, there are still many things you need to do, one of the most important of which is separate your personal and business assets. You can do this in several ways:

  • Open a bank account for your business– Having a separate bank account for your business will instantly separate your persaonl assets from your company’s assts. It will also make tax filing and general accounting much easier in the long run.
  • Apply for a business credit card– Once your assets are separated, it is time to separate your personal and business expenses, and this can be done by getting a business credit card. Not only that, but it will also help to build your company’s credit history, which will be very helpful if you need to get a small business loan or something similar in the future.
  • Hire an accountant – Although this is not a necessary step, many businesses find it helpful to also have a business accountant. Although this can be quite an expense, it can be very helpful and prevents your business from overpaying taxes and other tax errors, which could end up with you spending even more. It will also give you much more time to focus on running and growing your business, as you will have someone to help with bookkeeping and payroll.  

Business-Insurance

Get Insurance

You will need to get insurance as a business in Wisconsin, as this will help you manage risks. There are few different types of business insurance, so you’ll have to work out which type is right for your business.

  • General Liability Insurance – This is the most common type of small business insurance as it is very broad, and will protect your business from lawsuits.
  • Professional Liability Insurance – This type of insurance is more used by a business that is a professional service provider, such as an accountant or a consultant, as they will cover any claims of malpractice which otherwise would be very costly.
  • Workers’ Compensation Insurance – If you have three or more employees in the state of Wisconsin, then they are required by law to have workers’ compensation insurance, as it will provide coverage for job related illnesses, injuries and deaths of employees.

Compliance

Keep Your Wisconsin Company Compliant

After forming your LLC, you will need to ensure that it stays compliant with the state to avoid any unnecessary fees and fines. There are federal, state and local government regulations to consider, so it is important that you do your research to ensure you don’t miss anything.

The business licenses and permits that are required for your business will depend on where you are doing business and the type of business that you are running. The costs of all of these licenses and permits also vary greatly.

You will also need to look into Wisconsin LLC taxes. Again, these will depend on the nature of your business, with some requiring you to register for more than one form of state tax. These could include sales tax, employer taxes, insurance tax and various others.


Annual-Report

Filing Your Annual Report

Every year you will have to file an annual report with the Wisconsin Department of Financial Institutions. You can file this online along with a $25 fee. This is due by the end of the quarter in which the LLC was formed. Make sure you don’t miss your state filings.


Form a Wisconsin LLC With Professional LLC Service Providers

Although Wisconsin is not the most difficult state to form an LLC in, there are still many people who would prefer to get a little outside help with the whole process. To a new business owner, it can be very confusing and time consuming, and getting help from an LLC formation service company can help to free up that much needed time which can be used for running and growing your business. Although there are many different LLC formation services out there, some are better than others. You should always consider which is right for your business, whether that’s a company that provides great customer service, one that is affordable, one that has lots of good reviews online, or one that also provides many other services. A couple of the best are listed below.

#1 – Form a Wisonsin LLC With Zenbusiness

Zenbusiness is one of the more popular LLC formation service companies, and for good reason. It is one of the most affordable on the market, providing a basic formation package for a starting price of just $39. It has everything you need to successfully form an LLC, and all the hard work will be done for you. Although it is a relatively new service compared to others, it already has thousands of positive reviews online, so you can rest assured that the job will be done right the first time. Plus, they have a helpful customer service team that will help you every step of the way.

Here’s a full review of Zenbusiness here.

$49

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Rating: 4.8/5
Review count: 4500+

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Form an LLC today with ZenBusiness for only $49. They Have 98% customer satisfaction rating and over 4500+ verified reviews.


#2 – Form a Wisonsin LLC With IncAuthority

IncAuthority is another great option if you are looking for a good formation company to help you form your LLC. The company has been supporting small business owners since 1989, so it has a lot of experience behind it. One of the biggest draws for this company is that they provide LLC formation services for free, so all you have to worry about is the state fees, plus, you’ll get a full year of registered agent services for free as well. It has great customer service and is very simple to use. It does, however, have a few upsells that you could actually get for free. For example, they charge a fee if you want them to get you an EIN, and some of their premium bundles can be a little pricier than what other companies would charge.

Here’s a full review of IncAuthority.

$0+State Fees

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Rating: 4.8/5
Review count: 4500+

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Form an LLC today with IncAuthority starting at $0+state fees. They’re one of best-known services with lots of great customer experience.


FAQs About Wisconsin LLCs

Is it worth using a Registered Agent service?

Yes, it is often worth using a registered agent service. They are usually very affordable, and will free up your time to concentrate on more important things, such as running your business. The advantages that come with using a professional service will likely outweigh the costs involved, and if you do your research, you should be able to find some very affordable options.

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About the Author
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Founder & author

Ian Broderick is an avid author and owner of LLCGuys.com. He's been involved with the LLC formation field for over 4 years. On top of that, he has worked in several well-known LLC formation service providers. Now he decided to share his knowledge and advice with everybody. Since there are a lot of questions and concerns surrounding this field - his aim is to make LLCGuys a top-notch information provider in regards to LLC creation, service reviews and etc..

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