Step 1 – Choose Your LLC’s Name
The first part of forming an LLC in Wisconsin involves choosing an appropriate name for your future limited liability company. Not just any name will do, however; there are a few restrictions to keep in mind.
- The name has to be totally unique from other businesses. Fortunately, the Wisconsin Department of Financial Institutions has a business name database you can check for name availability
- The name must include “limited liability company”, “LLC” or a similar abbreviation
- The name cannot include terms like, “M.D.” or similar if they don’t fulfill the term requirements. So if you aren’t a doctor, for example, you can’t have “M.D.” in your LLC’s name
If you find a name that you really like, you can reserve it for up to 120 days by filing a name reservation application, linked here.
We’d also recommend searching for domain names as you think of a good name for your LLC. If you come up with a great name that has a matching and available domain name, you’ll be able to snag both.
This can pay dividends in the future if you decide to make a website, as you won’t need to create your website with a slightly different name than that of your actual company.
Step 2 – Name a Registered Agent/Hire a Service
In Wisconsin, as in other states, you’ll need to appoint a registered agent for your LLC. Not sure what a registered agent is?
In a nutshell, a registered agent is a point of contact (a person or a business entity) that works for your LLC to:
- Receive important court papers or summons
- Receive other important mail or documentation for your company
- Handle the mailing of business documents to other businesses or government entities
In legal terms, a registered agent is there to help your LLC as an “agent for service of process”. They are the official document recipient/manager for your LLC.
The most important thing a registered agent does is receive legal papers on your company’s behalf in the event of a lawsuit. This can be important, for example, if your LLC’s management doesn’t have the time to handle such legal matters personally, as well as to preserve appearances for larger organizations (imagine the embarrassment of an LLC management team receiving court papers in front of their shareholders).
The requirements for a registered agent are simple. A Wisconsin registered agent must:
- Be a Wisconsin resident
- Or a business entity authorized to do business in Wisconsin
- Either way, the registered agent has to have a physical street address in Wisconsin
You can appoint any individual in your LLC to serve as a registered agent, including yourself (which serves sole proprietorships well).
Alternatively, you can hire a registered agent service, which is a business that hires out registered agents to LLCs.
The difficulty in finding or appointing a registered agent is one of the reasons why entrepreneurs often use formation services, which can help create LLCs, file important paperwork, and take care of appointing a registered agent. In some cases, LLC formation services will include registered agent services as part of their responsibilities.
If you run a small LLC with only a few members or you have lots of other responsibilities to handle, hiring a professional LLC formation service can bring you peace of mind and take a lot of bureaucratic weight off your shoulders.
We’ve already found the best-registered agent services for anyone forming a Wisconsin LLC – check out our list now!
Note: Changing your registered agent is much less of a hassle than you think. We wrote up a guide to direct you through the process.
Step 3 – File Wisconsin Articles of Organization
The cornerstone documents for an LLC in Wisconsin are the Articles of Organization. The Articles of Organization are the primary documents that officially form your Wisconsin LLC and serve as the legal backbone for its structure and organization.
In total, Articles of Organization detail a wide range of specifics for your company, including its name, the name of your registered agent, the mailing address for all important parties, the LLC’s purpose, and more. Additional details included in the Articles of Organization are:
- The lifespan of your LLC (will it be “in perpetuity” or only active for a certain amount of time)
- Names and addresses for your LLC’s primary manager
- Signatures for all LLC managers and officers
- A description of its organization: is your LLC going to be member-managed or manager-managed?
Your Articles of Organization have to be filed before your LLC can become a distinct business entity. In Wisconsin, you’ll file Form 502 with the Wisconsin Department of Financial Institutions. There’s a fee for filing your Articles of Organization: $170 by mail and $130 if you file online (more on both methods below).
As you fill out the Articles of Organization, you’ll need to make several decisions about how your LLC will be classified and organized and how it will be recorded as a company by the Wisconsin state government.
Member-Managed vs Manager-Managed
A member-managed LLC is exactly what it sounds like: it’s an LLC in which all major business decisions are voted on by each member of the company. This can obviously get tedious and complicated if you have a lot of members, so most member-managed LLCs are small companies with only a few members.
Manager-managed LLCs are usually larger organizations in which the big decisions are only voted on by a select group of members who manage the broader organization. As you draft your LLC’s Articles of Organization, you’ll need to decide whether your company is member-managed or manager-managed based on its size and what works best for your needs.
The other major aspect you’ll need to decide as you file your Articles of Organization is your LLC’s tax classification. There are three basic choices you can make:
- A disregarded entity if your LLC has a single member
- A partnership, usually suited to small LLCs with more than one member
- S or C corporations that are suitable for larger LLCs
Each tax classification carries certain benefits that can be advantageous for appropriate LLCs. For instance, if you classify your single-member LLC as a disregarded entity, you don’t have to report profits or loss for your business separately. Instead, you would report any profits or losses alongside your individual income as part of your personal tax return. This simplifies tax filing at the end of every year.
How to File Wisconsin Articles of Organization Online
- Visit the Wisconsin Department of Financial Institutions
- Click “click here to start filing”
- Enter the name of your LLC
- Enter the individual name of your registered agent, or click “select entity” if your registered agent is a business. You can then search for the name of that organization
- Enter the physical address of your registered agent
- Mark whether your LLC is member-managed or manager-managed
- Enter the name and address of your LLC organizer(s), which are any managers or members involved with the formation of the Articles of Organization
- Enter the name of the “Drafter”, which is the person who entered the key information of the Articles
- If you want your LLC to start at a later date, click on the “declared delayed effective date” button and enter a date less than 90 days in the future
- At least one organizer must sign the document by selecting their name, clicking “next” and entering their name, phone number, email, and physical address
- Review all your information and click “next” if you don’t need to make corrections
- Pay the fee and file your Articles of Organization, $130 online
Filing by Mail
- Download Articles of Organization Form 502
- Fill out the Articles, which will require the same information as described above
- Mail your Articles to the following address
State of WI-Dept. of Financial Institutions
Milwaukee, WI 53293
If you file your Articles of Organization by mail, it will likely take up to five business days for your LLC to be registered in the state database.
Step 4 – Draft an Operating Agreement
While the Articles of Organization are the most important documents to file when creating an LLC, we’d also highly recommend that you create and file an Operating Agreement. While not required by Wisconsin state law, an Operating Agreement can provide numerous benefits for your LLC.
If the Articles of Organization are the “constitution” for your LLC, the Operating Agreement is a “Bill of Rights” that detail specific responsibilities, rights, and restrictions for members and managers. In addition, an Operating Agreement will:
- Explain how your LLC will be managed (who makes the decisions and when, for instance)
- Preserve personal liability, as an Operating Agreement can establish your LLC as a separate entity from yourself and any other members or managers
An Operating Agreement is important for any LLC that wants to keep all of its bases covered. Since it outlines member and manager responsibilities and rights, it eliminates the possibility of disagreements or confusion in the event of a personal issue, a legal problem, and more.
Say that your LLC managers enter a dispute with one another concerning dividends for stocks. Your Operating Agreement could outline the specifics about stock dividend payments, manager promotion protocols and bonuses, and more. With a solid Operating Agreement signed by each manager present at your LLC’s formation, you’ll nip problems in the bud before they become too hard to handle.
More importantly, an Operating Agreement allows you to fire members and managers easily and without worrying about legal recourse. Just make sure that your Operating Agreement has provisions for firing people from the LLC and you’ll be set.
An Operating Agreement is also essential for opening a bank account or taking a loan. Professional institutions need to trust your business, and if you don’t have an Operating Agreement, they simply won’t help your LLC.
All this complexity once again proves the value of a professional LLC formation service, which can draft an airtight Operating Agreement for your LLC and spare you a big headache.
Step 5 – Acquire an EIN
An EIN or Employer Identification Number isn’t strictly required by Wisconsin law, but it’s a super essential step in compliance with federal law.
An EIN is a nine-digit series of numbers that act almost like a Social Security number for business entities. They allow your Wisconsin LLC to do a few important things:
- Hire employees
- Open business bank accounts
- File and manage your federal and state taxes – if you have an LLC other than a disregarded entity, you do need an EIN so you can file taxes successfully
Fortunately, there are no extra fees incurred for getting an EIN from the IRS.
If you don’t want to deal with the hassle of getting an EIN yourself you can always hire an online formation service. Not only do they take care of the Wisconsin filing and registered agent, but they can also quickly apply for and get an EIN for your business in no time, along with handling all the other busy work involved with LLC creation.
Requestion an EIN Online
- Click this link
- Click “apply online now”
- Click “begin application”
- Click “LLC”
- Fill out all the information in the following pages. Be sure to mark Wisconsin as the state in which you are forming your LLC
- When you reach “Authenticate”, choose between individual or business entity for your LLC. Click “continue”
- Add your full name and Social Security number to verify your identity
- Add the physical contact information for your LLC, like the street address and phone number. The IRS will not accept a PO Box for the physical address
- Click “accept database version” and “continue”
- Add any other applicable details to your LLC
- The IRS will ask if you want to receive your confirmation letter online or by physical mail. Choose which one you prefer
- Review your EIN application and click “submit”
Requesting by Mail
You can also request your EIN by mailing the request to this IRS address:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Or feel free to fax your application to the IRS at 855-641-6935.
Step 6 – Check for Other Requirements/File Annual Reports
Even after forming your LLC in Wisconsin, it’s a good idea to check for any other tax or regulatory requirements. For example, domestic LLCs in Wisconsin have to file an annual report with the Department of Financial Institutions. You can do this online.
Your LLC’s annual report will be due at the end of the calendar quarter of the anniversary months of your company’s formation. Say that you form your LLC on July 15. In that case, you’ll need to file your annual report by September 30. The annual report due dates are March 31, June 30, September 30, and December 31. The cost for an annual report is $25.
Additionally, your LLC might need to obtain a local (city or town-level) business license to conduct commercial activities. You’ll also need to register with the Wisconsin Department of Revenue if you have employees that will be selling goods and collecting sales tax as a result.
Naturally, many LLC managers don’t want to spend time worrying about keeping their LLC in good standing or keeping track of annual reports and fees. Online formation services can take care of these tasks, leaving you free to make the important decisions necessary for the success of your company.
Setting up an LLC in Wisconsin is time-consuming, but it’ll be well worth it to do everything by the book so you have a legitimate, licensed company with which to fulfill your entrepreneurial goals. Follow the guide above and you’ll be set in no time. Good luck!