How To Set Up A Wisconsin LLC

Are you considering starting your own business in Wisconsin but don’t know where to start? An early step is forming the business structure, and a popular choice is the Limited Liability Company (LLC).

Forming a Wisconsin LLC has many benefits, and this guide will explain what an LLC is, the benefits of forming one in Wisconsin, and how to set one up.

Related: Starting A Business In Wisconsin Checklist

Is an LLC right for you?

An LLC, or Limited Liability Company, is a type of business entity that provides limited liability to its owners. This means that the LLC’s owners’ personal assets are generally protected if the business is sued. An LLC can be set up with just a few simple steps and operated like any other type of business.

Unlike a sole proprietorship or partnership, where the small business owner can be personally liable for lawsuits against the business, an LLC is a separate business structure that protects the LLC owner’s personal assets.

Besides liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, general partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

Steps to Form a Wisconsin LLC

Step 1: Choose a Name for the LLC

The first step in forming a Wisconsin Limited Liability Company is to make sure the name you want is available.  

It’s critical to do a Wisconsin LLC name search before registering an LLC name, as the name of each LLC must be distinguishable from other entity names registered in the state of Wisconsin. The Wisconsin Department of Financial Institutions makes it easy to search and verify if your LLC name is available. 

In addition to the name being unique, the entity designator (identifier used at the end of the business name) must be either:

• Limited Liability Company
• Limited Company Co.
• L.L.C.
• LLC

Pay careful consideration to any periods, as a missing period may impact the approval of the Articles of Organization.

A comma may be used after the business name and before the designator.  “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are acceptable.

If you want to use an LLC name but are not ready to register it, you can file a Name Reservation Application with the Wisconsin Department of Financial Institutions to hold the name for up to 120 days.

Step 2: Appoint a Wisconsin Registered Agent

Every LLC in Wisconsin must have a registered agent, simply someone with a Wisconsin street address who will be responsible for any legal correspondence, most often if the business is served papers in case of a lawsuit.

The basic requirements to be a registered agent in Wisconsin include:

• The agent must be a Wisconsin resident at least 18 years of age or a commercial registered agent service with a registered office in the state.
• The agent must have a physical address in the state (PO Boxes aren’t allowed).
• The agent must generally be available during normal business hours at the address provided to receive service of process.

Many LLC owners choose to act as their own registered agents, particularly if they reside in the state. However, some opt to hire a professional registered agent service. This choice is often preferred in two scenarios: when the LLC owner lives out of state or wants to keep their personal address off public records. Professional services offer the added benefits of ensuring compliance with state regulations and managing important legal correspondence, making them an attractive option for those seeking convenience and privacy in their business operations.

Related: How To Appoint A Wisconsin Registered Agent

Step 3: File the Wisconsin LLC Articles of Organization

The paperwork to officially create an LLC in Wisconsin is called the Articles of Organization. To submit the paperwork, you can either file online through the Wisconsin Department of Financial Institutions’ website. If you prefer to fill out and mail the application, download the Certificate of Formation (Form 502).

Related: How To Fill Out The Wisconsin Articles Of Organization

When filling out the Articles of Organization for the first time, a few sections and terminology may be confusing. Let’s go over these to help you get your LLC started right.

Purpose: Generic language stating the LLC is organized under Chapter 183 of the Wisconsin Statutes.  This language is needed to form an LLC in the state, and no action is needed.

Registered office address: The Registered Agent must have a physical address in the state, and PO Boxes are not allowed.  This address may be the address of the LLC, but it doesn’t have to be.

Management: This section asks if the LLC is Member-Managed or Manager-Managed.

• Member-managed LLCs have active involvement in management and the authority to act on behalf of the LLC.
• Manager-managed LLCs are hired by the members to run the LLC, similar to a corporation’s CEO. This is generally used when there are passive members in the LLC, and the members do not actively manage or operate in the business’s affairs.

Most LLCs are member-managed.

Organizer information: An LLC Organizer is involved in forming the Articles of Organization.  The Organizer may or may not become a member, such as a mentor, attorney, or accountant, but any LLC member can be listed as an organizer.

Select the drafter: The drafter is the person who entered the information into the Articles of Organization, and their name needs to be included in this section. This person is likely one of the members, an attorney, or an entity formation service.

Delayed effective date: This is an optional section, but if you want the Limited Liability Company to start later, click the “Declare Delayed Effective Date” button and then enter a date less than 90 days in the future.  The main reason for delaying the LLC start date is when the filing is made close to the end of a calendar year, and the business isn’t going to have any activity until the start of the year.  You can eliminate the need to file a partial-year business tax return by delaying the start date until the following year.

If you do not select anything, the effective date will be the date the Department of Financial Institutions files the Articles of Organization.

What To Do After Forming A Wisconsin LLC

Once the LLC has been formed, there are a few additional steps to take. Below is a list of the most common tasks.

Prepare a Wisconsin LLC Operating Agreement

The LLC operating agreement is an internal document that governs the framework of an LLC. It covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.

Under Wisconsin Law, Statute Chapter 183 states that every Wisconsin LLC may adopt an operating agreement, which the Wisconsin Department doesn’t require of Financial Institutions.  Despite not being required, there are several reasons it is recommended to have one.

LLCs in Wisconsin are not required to have an operating agreement, but it is still worth considering. Without an operating agreement:

• The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
• Member’s personal liability protection may be diminished.
• Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Obtain an EIN

If the LLC will hire employees or is owned by more than one member, an EIN is required. 

The EIN or Employer Identification Number (also referred to as a Federal Employer Identification Number, FEIN, or Federal Tax ID Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Like an individual’s social security number, the EIN identifies business entities for tax purposes. The EIN will be needed to hire employees, open a bank account, build business credit, register for business licenses and permits, file federal and state taxes, and more.

There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.

If an Employer Identification Number isn’t required, the LLC can use either the owner’s social security number or register for an EIN. 

Related: How To Register For An EIN

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

• A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
• Copies of the original LLC formation paperwork from the state showing the creation of the LLC.
• Driver’s licenses of the members.
• Occasionally, the bank will request a Wisconsin Certificate of Good Standing to prove the LLC is active and in good standing with the state.

Apply for Business Licenses and Permits

After forming the LLC, various business licenses and permits will be needed before starting the business. Some common registrations include:

• Business license: Some cities require businesses to obtain licensing before starting.
• Professional license: Certain services, such as barbershops, accountants, salons, and others, must be licensed. ​The Wisconsin Department of Safety and Professional Services maintains a full list of professions.
• Seller’s permit: To sell products and certain services, register for a Wisconsin Seller’s Permit with the Wisconsin Department of Revenue.

Related: How To Register A Business In Wisconsin

File Wisconsin LLC Annual Reports

LLCs are required to file a Wisconsin LLC Annual Report with the Wisconsin Secretary of State.  The annual report updates ownership information and other details.

File the Beneficial Owner Information Report

Beginning in 2024, any individual who owns at least 25% or has “substantial control” of an LLC or corporation in Wisconsin or any other state must file the Beneficial Ownership Information (BOI) form with the Financial Crimes Enforcement Network (FinCEN).

Wisconsin LLC FAQs