How to Start an LLC in Wisconsin: Cost and Registration Steps

Wisconsin's favorable business environment attracts aspiring businessmen to locate their offices in Wisconsin cities. Tax credit programs and tax incentives make the market conditions significantly favorable to new businesses. Although, filing is sometimes a little more expensive than in other states.

Before starting a company, you should choose its type, and most people lean toward Wisconsin LLC registration in this matter. There are several reasons for this: it's quick and easy, the business structure is perfect for startups and small/medium-sized businesses, and it offers more benefits and more protection than other types. So why don't we talk more about it right now?

How to Form an LLC in Wisconsin: From Benefits to Instructions

The year 2021 broke all records in the state for the number of limited liability companies opening. By the end of 2022, we might see very different numbers exceeding last year's data. But this is not surprising at all, given the capabilities of LLCs:

• Initially, there is no need for extensive preparation because everything is quite simple and quick to set up. This means that the owner spends more time on the business rather than wasting resources on collecting documentation;
• The LLC owner has more protection than owners of other business structures. The point is that the capabilities of a limited liability company allow you to separate personal financial liability from business responsibility. Therefore, the debts of the firm will not affect the owner's finances in any way;
• Income. Owners (who engage in starting an LLC in Wisconsin) know that all future income converts to personal income. Hence, there will be fewer taxes and expenses;
• You have fewer restrictions, requirements, and more flexibility. An LLC can have as many owners as needed, and there is no requirement to hold annual shareholder meetings;
• Free distribution of profits. Corporations, for example, have to distribute profits in a certain way among their members, but this is not the case with limited liability companies.

And if you're planning to join the ranks of new businesses, we recommend learning more about how to start an LLC in Wisconsin and what you need to do to grow and scale tomorrow.

Where Does an LLC Start?

Every business starts with an idea, but if your idea relates to a limited liability company, the next step is to file Articles of Organization with the Secretary of State. Such documents are filed online or by regular mail.

Having the Statute and filling it out is mandatory because, with its approval, the company gains legal status and the right to operate. That is why there is no way to avoid this process. In fact, many people point out that there is nothing difficult about it. But let's take a look at what you need to do in order to ensure Wisconsin LLC registration according to all the regulations. And on this point, we have prepared 6 steps that everyone will have to go through.

1. Brand Name

Have you considered what you are going to name your company? If not yet, then you need to think about it because this information should be specified in the Articles of Organization. The name should be consistent with state rules and be free. Otherwise, you will have to work on the Certificate twice because the Secretary rejects documents with data that do not meet the requirements.

How to choose?

I. Keep the State Regulations in Mind

• It is important to remember that when founding an LLC in Wisconsin, you should always add the type of business at the end of the name. In this case, you need to include "limited liability company" or one of its abbreviated forms;
• Some words or phrases should not be used at all for your clients not to confuse your company with government agencies, for example. Nor should you hint at specific specializations unless you are licensed to do so. For example, the activities of doctors, lawyers, accountants fall under these requirements;
• The name has to be free and not used by other organizations in the state. Moreover, they need to be distinguishable. Otherwise, it would be a violation of the rights of someone else's trademark.

II. Do Your Research

To avoid future misunderstandings and know how to get an LLC in Wisconsin quickly and correctly, do a thorough search of the names on the Secretary of State's website.

Type the name you want to use for your firm into the search box. In a few seconds, the system will show you a list of similar options used in the state. It's worth choosing from those that have no analogs on the market.

You can also check the name availability here. So, use these services to get the Secretary of State's approval to create an LLC in Wisconsin from the first try.

III. Domain Name

Today, any business that operates on the market, whether small or large, makes itself known on the Internet and conducts its activities there, attracting new customers. It will probably be useful for you to have your own website that will:

• Bring in profits;
• Allow you to increase your audience. 

One of the important components in the launch of the website is its domain name. It is desirable that the domain name coincided with the brand name. Hence, while choosing a name and registering an LLC in Wisconsin, don't forget that you need to check and match it for correspondence.

So, a suitable domain can be found by querying the search engines. The name you choose will determine how quickly your site will be found by potential customers.

IV. Reservation

The Wisconsin Department of Financial Institutions submits your name registration for review, and this is where decisions are made on whether you can get one. If needed, they will reserve your LLC name for 120 days.

You will need to send a letter to the Wisconsin Department of Financial Institutions 4822, Madison Yards Way, North Tower Madison, WI 53705 along with a receipt for the $15 service fee. And once the procedure is completed, the name will be secured, and other companies will not be able to use it.

2. Choosing a Registered Agent

Every business organization operating in the WI market is required to enter into a cooperative agreement with a registered agent to entrust them with the responsibility of receiving legal correspondence. Every state in the U.S. requires the owner to appoint such a specialist before forming an LLC.

Wisconsin Statutes § 183.0105 clearly state who can become an agent and what tasks that person is expected to perform. Thus, it can be an adult who is a resident of the state. Therefore, a friend or family member may be appointed as an RA. Also, the owner may take up this position.

According to the law, another firm can be hired as an agent. There are many of them on the market today. Such services provide other solutions related to LLC formation in Wisconsin and help with many legal/tax issues.

What Does an Agent Do?

Agents help owners do business the right way through fast document delivery and privacy protection. In most cases, their responsibilities are as follows:

• Scanning. Every time an RA receives correspondence, he or she scans it and notifies the owner;
• Confidentiality. When the owner fills out the Certificate of Formation, s/he gives the registered agent's address rather than his or her own, thereby keeping their address information out of the public eye. Moreover, when the company is sued, the owner does not receive this notice personally because the agent does it. It is also in their power to sign the document, confirming receipt. Next, they notify the owner of the situation. In this way, the agents protect the reputation of the owners, saving them from the embarrassing procedure of handing in the claims in the presence of employees or clients;
• Mail Forwarding. Initially, all the legal mail ends up on the registered agent's desk, and then, he/she forwards the letters to the owner. This can be not only legal correspondence but also regular business mail;
• Advice. By hiring a special service that knows how to create an LLC in Wisconsin, firms get more support. Such organizations have business experts who can advise on a variety of issues.

Tip: Most businesses prefer to hire a special agency to get a range of benefits and services from filing Articles of Incorporation and registering a name to drafting an Operating Agreement and getting legal/tax advice.

Selecting and Changing Agents

It is handled through the state Department of Financial Institutions online or by mail. The online service costs $130, and the registration form will need to include limited liability company information as well as RA information.

If forming an LLC by mail, the registration service will cost $170. Send the form to the Department of Financial Institutions.

If you already have a resident agent but plan to change it, a "Change of Registered Agent" form should be prepared and sent to the same Department for processing. A $10 registration fee will have to be paid. 

No Registered Agent Appointed: Consequences

Not having an RA listed in your Certificate of Formation will likely cause you problems such as:

• Loss of LLC status and protection of your legal entity. This usually results in the dissolution of your organization;
• You won't know when a lawsuit is filed. Imagine you don't have an RA, and you are being sued for some reason. Then, there's a good chance you won't find out about it, and the lawsuit will be lost;
• Loss of Reputation. There are such letters that need to be responded to just in time. For example, it could be a request for an annual report. In case of missing the deadline, there is a risk of losing not only reputation but also the company itself.

3. File Your LLC Articles of Organization

We have already figured out the reasons why people choose to start an LLC in Wisconsin, as well as what needs to be done before filling out the company's founding documents. So, initially, you will need to choose a name and find an agent who will receive legal correspondence and claims. All of this information will need to be filled out in the appropriate fields of the Articles of Organization and sent online or by mail to the Secretary of State.

Contacts for submitting the AO:

In addition to the above information, you will need to fill in other fields: 

• Management. In this field, you specify who and how many people will manage the firm. Both members and managers are allowed to run the company. So, in the first case, the management responsibilities and other day-to-day operations are the responsibility of the members, and in the second case, these are the tasks of the managers. The owner decides which option is the most appropriate. In case you have the second option, it is necessary to indicate all managers who will occupy the managerial position, and if the members run the company, indicate at least one of them; 
• Organizers. These are the people who prepare and submit documents for the owner to the Secretary of State. The organizer does not necessarily have to be a member, it can be anyone you trust. Include the contacts and names of the organizer/s;
• Launch Date. Once the Secretary approves the Certificate, the business is officially registered. If you have plans of applying for LLC formation in Wisconsin now but operate in the future, you should specify the date of initiation on the form. You can choose any date, but the company should be up and running no later than 90 days after filing the Articles of Organization;
• Contacts. Include an email address, mailing address, and phone number so that the Secretary can send a decision to your address or contact you if there are any questions.

4. Draft an Operating Agreement

An Operating Agreement (hereinafter OA) is a contract between the members of the LLC regarding the details, roles, and rules of management of the company. It is completed in writing or verbally. It is recommended to draw it up on paper so that in the future, its content could help in resolving conflicts and regulating relations between the participants on a legal basis.

Its availability is optional and not required by state law. But if you want to know how to register an LLC in Wisconsin correctly and manage the enterprise competently, the document should be drawn up and signed. Every member of a limited liability company should keep a copy of the OA on a desk. Moreover, the OA helps protect the status of the LLC because potential investors will be able to evaluate the business based on its contents. It will also allow you to get a bank account.

The completed document can be notarized (although this is not required). But often, it is enough for all members to sign and date it.

How to Draw It Up?

First of all, the OA needs to be adapted to the needs of the business as well as the laws of the state and the country. Here are the main points that we recommend including:

• Investment and ownership. Each member of the company invests in the development of the business. Therefore, this aspect is important to include in the document so that profits and losses can be distributed fairly in the future. Thus, this clause specifies clear financial boundaries, interests, rights, and responsibilities of every member;
• Roles. This section allows you to establish who and how will manage the tasks/processes. Considering that conflicts between participants arise due to who/how manages the company processes, it is better to clarify the roles beforehand to avoid conflicts in the future; 
• Management. Establish the principles of management: if there is a board of directors, who is the executive officer, how often meetings are held, how many votes are required to approve an issue, what are the rights of one or another member, who resolves disputes, and who is responsible for the documentation;
• Profits and their distribution. Profits (as well as losses) are automatically distributed among the members, but you can change all the financial issues in this section. Namely, you can choose how to distribute profits, who is in charge of finances or tax filings, and so on;
• Redemption rules. It is possible that in the future, one of the participants may want to leave the company or face difficult situations (such as bankruptcy). So, when you're wondering how to get an LLC in Wisconsin, also take care of contingencies. Stipulate when participants can transfer stakes in the company. Also, in the OA, the redemption rules section describes the terms of who can purchase a part of the LLC and what happens to the interest of a member who has passed away;
• Competition rules. Throughout the firm's existence, each of the participants will accumulate knowledge, skills, and assets. It is important to ensure that none of them has the right to use all of this for the benefit of competitors. This is what this paragraph in the agreement is for;
• Timing. When setting up an LLC in Wisconsin, it is sometimes necessary to specify the date when the company will cease to operate. In most cases, this is not necessary. Still, in the OA, it is worth stating the circumstances under which the LLC can be terminated to avoid legal problems in the future. 

The Operating Agreement is not the foundation document that is submitted for registration of the company, but it can work in conjunction with the Articles of Organization, supplementing it and expanding business opportunities. The excellency of the OA is that its content can be changed at any time if all members of the firm agree with it.

5. Get an EIN for Your Wisconsin LLC Registration

Every limited liability company with more than one member is required to apply to the Internal Revenue Service (IRS) for a nine-digit number (EIN). The IRS provides this service free of charge, and you can apply in a way that is convenient for you: online on the website, by mail, or by phone.

The employer identification number is not only necessary for the IRS to identify the company for tax purposes, but the EIN is also important to the operation of a limited liability company. So, let's take a look at the benefits a business will receive with an EIN:

• Protection and credibility. With an EIN, the owner will not be liable for the company's debts, which is already a good thing because personal finances are protected. Moreover, having an EIN will show clients that your company is really a business, not a hobby that can be abandoned at any time. The situation is similar with suppliers: they are more willing to cooperate with a business that has a nine-digit number;
• Accelerated processes. With an EIN, you can get a business loan much faster than without one. And while lenders don't ask for an EIN at the time you sign a loan agreement, they do ask if you have a bank account, and that’s when you need an EIN;
• Bank account. Some banks will help you open one without an EIN, but not all of them work that way. Some still require proof of having an EIN before they open a commercial account for you; 
• Hiring employees. An EIN is about setting up an employee payroll system. And even if you're not planning to hire employees right now, think about the future: there are probably plans to scale.

Note. Once you get an EIN, you can use it right away. But you will need a new EIN if your business structure or ownership changes. And if you lose your tax number, contact the IRS.

How Can I Get an Employer Identification Number?

If you need it as quick and easy as possible, use an online filing with the IRS, and an EIN Assistant will help you do it.

Some details that are important to remember:

• The IRS is open Monday through Friday from 7:00 a.m. to 10:00 p.m. This is the time when the service staff accepts applications;
• It is important to fill out the application in one session, which lasts exactly 15 minutes. Didn't make it in time? Then you will have to fill it all out again, as the system does not save it;
• IRS website. 

You can fax the application to (855) 641-6935 or mail it to EIN Operation, Cincinnati, OH 45999. These options take slightly longer than online filing.

LLC Formation in Wisconsin Cost

In this section, let's talk about the investment that will need to be made by individuals who want to set up a business. And the first thing to say is that WI is one of the most expensive states when it comes to company formation. However, if you compare it to other business structures, an LLC is the most profitable option even in this case.

In this section, we will try to answer in detail how much it costs to form an LLC in Wisconsin and what additional expenses will be needed in the future.

Note! Prices are valid for those who apply independently. Using the help of specialized agencies, expect that you will need to pay for their services (starting at $49) and a mandatory set of state fees. In such cases, the costs increase.

Registration

We discussed in detail how to set up an LLC in Wisconsin and described the set of documents that you will need. So, the Articles of Organization are filed to register the company, so it has legal status. Online filing will cost you $130, and mailing it in will cost $170.

Owners prefer to use online forms because it's not only cheaper but also more time-efficient:

• By filing the Certificate online, a decision will come in a couple of days;
• For paper documents, the waiting time is up to 5 days.

If you need to speed up the work of the Secretary of State, use the expedited procedure service. Thus, you will have to pay an additional $25, and the decision will come at the end of the business day.

But how much does it cost to form an LLC in Wisconsin for a foreign individual? In this case, you will need to file a Form 521 and pay the state fee of $100, which is the registration fee.

Name Reservation and DBA

We have discussed the importance of choosing the right name for your company and the rules you need to follow when choosing one. If the decision is made, you can reserve the name for 120 days for $15 by filling out Form 1.

But in addition to the legal name, you'll likely need a trading name (that's the name by which customers will recognize the company brand on the market), and the reservation fee is $15.

Registered Agent

Sometimes, the owner chooses not to spend money on hiring a registered agent and becomes one him/herself. This is permissible in the state, just as it would be if RA were your friend or a family member. 

Still, most people prefer to hire services that handle the legal correspondence of the business. There are plenty of such offers on the market, and the prices of the services vary from $39 to $300 (not including state fees).

Annual Report Expense

Every LLC is required to file a report each year that shows up-to-date information regarding the business. Failure to file an annual report on time can result in the loss of good standing or even closing the company permanently.

Submit the report online or in writing by mail along with a $25 state fee.

It is also possible to hire an agency that will keep track of the annual report deadlines and send it to the Secretary of State on time. But in this case, the cost will be higher because it depends on the price of the contractor's assistance.

Permits and Licenses

Sometimes, you need to get certain types of licenses and permits to open an LLC in Wisconsin and launch a project. For example, it is required if you are starting a veterinary business or plan to provide legal services. So, be ready to pay an average of $20 to $300 if your business falls under license/permit requirements.

Certified Copies of Documents

Once the Secretary decides on the legal status of your company, you and your registered agent will receive copies, and the original will be kept on record. But you may need a few more duplicate documents. You can get them from the Secretary for a $10 fee.

Certificate of Status

This document will show that the business is in good standing with the state and will help in many business matters. For example, you may need it when applying for a loan or insurance. The cost per copy is $10 (or $35 if obtained urgently).

Recommendations on What to Do After Creating an LLC in Wisconsin

Starting a company and getting approvals from the Secretary is a small part of what you should take care of. After all, there are other things that will make your firm sustainable and strong:

• Hire an accountant. You may avoid doing it to save money, but with such a specialist, you will win in the long run. The professional will keep you from overpaying on taxes, help you avoid fines, and just save you from working with numbers. Often, an accountant can find profit opportunities or prevent losses;
• Be online. A website and social media platforms are something without which a modern business cannot exist qualitatively on the market. Therefore, take care of who will create the website for you and handle the social media accounts;
• Get insurance. At the very least, you should get liability insurance to protect your company from lawsuits;
• Open a bank account. It won't take you long at all to get a bank account. But along with it, the owner gets a number of opportunities: protection of personal funds, obtaining a loan, and more. 

Of course, such actions will greatly increase the Wisconsin LLC cost, but it's important if you want to have a strong brand and a solid company that's resilient to all kinds of life situations.

Keep Your Company Compliant

Important! Just recently, a bill was introduced in the state Senate that deals with modernizing the law on limited liability companies. This law will apply to all LLCs that are formed after January 1, 2023.

Thus, when completing the new Articles of Organization, owners will be able to specify additional information about their LLCs. The paragraph on the duties of managers and participants states that each of them is responsible and attentive. Differences will also be seen in the requirements for annual reports, and there are new provisions for mergers and conversions.

But what is an LLC in Wisconsin now and what do you need to comply with before the new law is enacted:

• The business licenses and permits that are required to operate need to be obtained. For example, a professional license is required in WI if you are a pediatrician, dentist, or work with children;
• The number and type of licenses are also affected by the city in which you want to start a company. In Milwaukee, for example, if you plan to sell alcohol or animal products, you need a special license. Therefore, check with your local government to see what kind of license you need specifically;
• When referring to state requirements, you'll need a vendor permit and a federal license to operate legally;
• You need to follow the tax rules. This regulation applies to every resident and non-resident of the state who makes a profit in WI. The forms you will have to work with depend on many factors. Therefore, you should consult with your accountant about this.

Conclusion

Now, you know how to get an LLC in Wisconsin and how much it will cost you. Despite such a lengthy article, the process of setting up is still not that complicated (especially if you employ assistants rather than putting the entire mission of formation and management on yourself). Therefore, feel free to use the services of third-party companies who will not only help but even do all the paperwork for you.

Important! If you plan to work with a third-party service that knows how to apply for LLC in Wisconsin, we recommend initially checking its experience, recommendations of former clients, and the reputation the firm has received from independent rating platforms. This will help you find not only a reliable partner but also make the partnership as productive as possible in the long run.

Before filing with the Secretary of State, gather all the necessary information (look for a vacant name, hire a registered agent, determine license types), pay the state fee, and then, submit the forms online or by mail.

Once you receive a positive decision from the Secretary, follow the rules and requirements set by the state. Specifically, obtain the necessary business licenses and permits, file reports on time, open a bank account, draw up an Operating Agreement, get insurance, and more.

We're sure our review and recommendations will help you build a company with a solid foundation. We wish you the best of luck!

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