Creating an LLC in the State of Wisconsin
Each of the states here in the USA has slightly different requirements for starting a Limited Liability Company or LLC.
Depending on whether you are launching a new business or incorporating an already existing business, you need to fully understand the requirements imposed by the state of Wisconsin.
There are six things you need to consider when forming an LLC in WI:
- Coming up with a name for your new business;
- Partnering with a Wisconsin registered agent;
- Lodging the LLC formation documents with the Secretary of State for Wisconsin;
- Formulating an operating agreement (optional);
- Applying for an employer identification number;
- Providing any additional necessary documents according to the type of business.
Naming Your LLC Company
Your company name is all-important. It needs to be catchy enough to attract people's attention, appropriate in terms of representing your brand, and it must comply with the rules and regulations specified by the state of Wisconsin.
In keeping with other states here in the US, Wisconsin state law requires your company name to have the appropriate suffix - Limited Liability Co, Limited Liability Company, or the abbreviations LLC L.L.C.
As for the main body of the name of the company itself, it must be demonstrably different from any other organization currently registered in the state.
Small variations such as slight differences in spelling, punctuation, or suffix will not be considered unique enough to be accepted.
You can check with the detailed guidelines for naming an LLC in Wisconsin on the Secretary of State's website if it helps.
More than Just the Name
DBA (Assumed Name)
There are some other considerations associated with your company name. Will the name be a trade name or a DBA (Doing Business As)? If you want to use an Assumed Name instead of your actual LLC name, then you need to file a DBA form with the Wisconsin Department of Financial Institutions.
Will you be operating a website and therefore be in need of a domain name? Most companies want their domain names to represent their business's operating name. It's wise to carry out a domain name search before making a final decision on your new company's name.
Business Name Reservation
Finally, will there be a delay between choosing your company name and filing the Articles of Organization? If so, you might want to consider completing a name reservation application with the Wisconsin Department of Financial Institutions, Division of Corporate and Consumer Services.
The fee for doing this is $15, which will reserve the name for 120 days.
Partnering with a Wisconsin Registered Agent
The next step is to choose a Registered Agent in Wisconsin with whom to partner. This agent can be a person, including someone who works in your company, or an entity. The agent will be your main point of contact for all legal matters.
Although you can become your own registered agent, many consider it better to outsource the function. The person or entity you choose must reside in Wisconsin state.
The benefits of employing an external registered agent include:
- Prioritizing your time on running your business.
- Taking advantage of someone who knows the state and federal regulations and compliance issues.
- Having all your legal documents filed in one place.
- Avoiding difficult legal confrontations in front of clients.
A Registered Agent is an individual or a business entity that has been designated by the LLC to receive service of process notices, government correspondence, and compliance-related documents on behalf of the LLC. The registered agent must be residing in Wisconsin.
Lodging the LLC Formation Documents
Having decided your company name and chosen your Registered Agent, you will now need to attend to the business of filing the LLC Articles of Organization.
How Long Does it Take?
If sending the formation paperwork via the mail, you can expect it to take approximately five days to process. You can, however, pay an extra $25 for an expedited process.
If you elect for the expedited service, the Articles of Organisation processing will be completed on the day following their receipt at the office of the Secretary of State for Wisconsin.
What is the Cost of Forming an LLC in Wisconsin?
If you plan to complete a paper document and send it by mail, you will be liable for a $170 non-refundable fee.
If, on the other hand, you wish to complete the process online, you will be liable for a $130 non-refundable fee.
Formulating an Operating Agreement
The creation of an LLC Operating Agreement is not a legal requirement here in Wisconsin. However, this type of agreement specifies the rules that your company will follow, lays out how the finances will be handled, and how decisions will be reached. This includes any partner voting structure and the details of any additional rules.
Another useful function of an LLC Operating Agreement is that it can lay out the fate of your company in the case of your demise and can be used to protect any assets if the company is dissolved or becomes bankrupt.
An LLC Operating Agreement must be signed by each affected party.
As an LLC Operating Agreement is not mandatory according to the state of Wisconsin, there is no official form to complete. However, if you are drafting up such a document, it is recommended that you use a lawyer's services.
An operating agreement is an internal legal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, the ownership structure, and operating procedures.
Applying for an Employer ID Number (EIN)
Before the formation of your Wisconsin LLC can be completed, you will need to obtain an EIN, or Employer Identification Number - sometimes referred to as a FEIN, or Federal Employer Identification Number.
However, please note that if you will be a single-member LLC without any employees, this will not be necessary.
Essentially, an EIN is needed for taxation and financial paperwork. This includes the filing of taxes, hiring employees, and opening of business bank accounts.
EIN numbers are issued, without cost, by the Internal Revenue Service.
EIN stands for Employer Identification Number. EIN is a unique nine-digit number assigned by the IRS to help identify your businesses for tax and filing purposes. An EIN is sometimes referred to as a FEIN (Federal Employer Identification Number) or FTIN (Federal Tax Identification Number).
Providing any Additional Licenses or Permits
You are advised to carry out some research with regard to whether your company requires any special licenses or permits, as these are usually industry-specific, and requirements differ from state to state.
You can check out the state's exact requirements by getting hold of a copy of the Department of Agriculture, Trade, and Consumer Protection Licence List for the state of Wisconsin.
Concerning business insurance, the state of Wisconsin requires that each small business that has employees must provide those employees with workers' compensation insurance.
You must also have commercial auto insurance for any vehicle used in whatever context by the company.
For a full list of insurance types and the requirements of the state, you can refer to the Consumer's Guide to Insurance for Small Businesses.