How to Start a Business in Wisconsin

A sole proprietorship is the easiest way to go into business. But, for most people, a sole proprietorship is not the best business structure. That’s because when you’re a sole proprietor, your personal assets are exposed if someone sues your business. Your house and car could be seized if someone wins a lawsuit against you for selling cheese curds that possibly made them sick.

That’s why it’s important to create a separate legal entity from yourself—such as an LLC or corporation. They both offer liability protection, ensuring your business life doesn’t affect your life outside of work.

Wisconsin Limited Liability Company (LLC)

LLCs (Limited Liability Companies) are known for being a little less uptight than corporations. For one thing, LLCs can be managed by members or managers. There’s no need to appoint a board of directors or hold annual meetings. To start a Wisconsin LLC, you’ll need to file paperwork with the Wisconsin Department of Financial Institutions, Division of Corporate and Consumer Services. There’s a $130 filing fee if you file online, while filing by mail costs $170.

Wisconsin Corporation

If you want to form a Wisconsin corporation, you’ll need to do a little more planning and organizing. A Wisconsin corporation requires a board of directors and usually a higher tax burden to worry about. On the plus side, a corporation can grow its wealth by issuing stock certificates. To form a corporation, you’ll need to file paperwork with the Wisconsin Department of Financial Institutions, Division of Corporate and Consumer Services. The cost is $100 to file online or by mail.

If you’re a sole proprietor, then your human name is also your business name. If you want a different name, you must file for a DBA.

But if you’re an LLC or corporation, you’ve got more creative freedom with your business name. Of course, there are still regulations you have to follow. Wisconsin business names must abide by the following rules:

• Not be identical or similar to an entity that already exists in the state.
• Corporations must contain certain words like “incorporated” or “company,” or use an abbreviation like “corp.”
• An LLC must use the phrase “limited liability company” or “limited liability co.,” or an abbreviation such as “LLC” or “L.L.C.”

Find out if your preferred name is available in Wisconsin by checking the Wisconsin Business Database.

If you’re starting an Wisconsin LLC or corporation, you will have to file paperwork with the Wisconsin Department of Financial Institutions, Division of Corporate and Consumer Services:

• To form a Wisconsin LLC, file Articles of Organization
• To form a Wisconsin corporation, file Articles of Incorporation

A registered agent must be listed on your formation paperwork. Once you’re done, submit your Articles of Organization or Incorporation to the Wisconsin Department of Financial Institutions, Division of Corporate and Consumer Services. The form can be submitted online or by mail.

So far in this guide, we’ve dealt with public forms that you’ve had to file with the Wisconsin Department of Financial Institutions, Division of Corporate and Consumer Services. Now, it’s time to organize your internal records. These are the documents your business will keep on record within your company.

Though these documents are internal, you’ll likely need to show them to third parties like the bank or—if you start a nonprofit—the IRS.

Here are the major internal documents you need to organize for LLCs and corporations:

Wisconsin LLC Operating Agreement

This is your LLC’s rule book. It defines how your LLC will do things like make decisions, distribute money, manage operations, and appoint officers. Your operating agreement plans for every big picture scenario your LLC is likely (or unlikely) to face, including dissolution.

Drafting an operating agreement is hard, and the internet is full of shabby templates that have been copy and pasted from who knows where. So we had our attorneys draft a Wisconsin LLC Operating Agreement template that you can use as a solid foundation.

Wisconsin Corporate Bylaws

Bylaws are the rules your corporation will adopt and follow internally. Bylaws detail how your corporation will appoint directors and officers, hold shareholder and board meetings, and handle emergencies, among other things. Corporate bylaws are optional in Wisconsin, but you should still make them. (see WI Stat § 180.0206 (2019).

As with operating agreements, you can find plenty of bylaws templates online. But bylaws are pretty serious, so you don’t want to just use the first template you come across. Our attorneys drafted a Wisconsin Corporate Bylaws template you can use to get started.

Starting a nonprofit? We also have Wisconsin nonprofit bylaws.

Wisconsin doesn’t have a general business license. However, you’ll likely be required to obtain a Sales and Use Permit. You may also need a professional license depending on the types of services your business provides.

Wisconsin State Business License

Although the state doesn’t require a general business license, there’s a good chance you will need a Sales and Use Permit. You will need to register for a sales permit if your business will be “making retail sales, leases, or rentals of tangible personal property or taxable services in Wisconsin,” unless those sales are exempt under state law. The state recommends applying for a sales permit at least three weeks before you plan to open your business. The cost is $20.

Professional Business Licenses

Wisconsin requires professional business licenses if your trade requires specialized training and education. For example, a registered nurse, accountant, and lawyer need a professional license to conduct business. In fact, so does a cheesemaker because Wisconsin takes cheese products very seriously.

Local Business Licenses

Some Wisconsin cities will also require you to be locally licensed. Milwaukee and Madison are two cities that require tattoo parlors to get licensed. Contact your local government for more information on how to get licensed in your municipality.

Learn more about How to Get a Business License.

The liability protection you get from forming an LLC or corporation is only as strong as the separation between you and your business. At a minimum, you’ll need to open a bank account for your business. And if you’re going to hire employees, you’ll need to tackle payroll, too.

Open a Business Bank Account

To keep your business spending separate from your personal spending, you’ll need to open a business bank account. If you don’t, a court could find that your business is not actually separate from you, the owner, under the Alter Ego Doctrine. Also known as piercing the corporate veil, this is the outcome when a judge finds that a company is not a separate entity but rather an alter ego of the owner. If this ever happens, you could lose your limited liability status.

Opening a business bank account as a sole proprietor is important, too. Though sole proprietors and general partnerships have no limited liability status to protect, both will benefit from organizing their business finances come tax season.

Set up Payroll

If you’re planning to hire employees or independent contractors, you need to set up payroll. To do so, you’ll need to:

• get an EIN for your business
• get a Wisconsin Withholding Tax Number
• register with the Department of Revenue to file quarterly wage reports and pay unemployment taxes
• figure out your income tax withholdings
• determine whether you’re hiring employees or independent contractors
• prepare the forms your employees will fill out
• choose a payroll service or software
• decide on a payroll schedule

Setting up payroll in Wisconsin can be one of the most tedious parts of forming a business. But a good payroll service or software will automatically withhold payroll taxes, file state and federal returns on your behalf, and pay your employees either by check or direct deposit—whichever you choose.

Forming an LLC or corporation protects your personal assets. But if anything disastrous befalls your business—like a lawsuit, burglary, flood, or fire—your business is on the hook to pay. Business insurance can help cover the costs.

Workers Compensation Insurance

No business owner likes to think about an employee getting injured on the job. But if it happens, workers compensation insurance can be invaluable. It’s also a legal requirement in Wisconsin for most businesses.

If you have three or more employees, you’ll be required to have workers compensation insurance. You’ll also need insurance if you have a single employee who has earned at least $500 in annual wages. You can purchase workers compensation insurance from most insurance companies. Larger employers, on the other hand, may get permission from the state to self-insure.

Liability Insurance

This covers the costs of claims against your business for injuries or damages to the property of others, like clients or customers. This includes medical expenses, legal fees, settlements, and judgments. Whether or not you need it depends on whether your business is likely to be sued and how many assets your business needs to protect. If it’s just you and your computer in your basement, you might feel comfortable skipping liability insurance. Or maybe you won’t. Beyond general liability insurance, you can purchase or add on more specific types, like professional, cyber, commercial, home-based business, or product liability insurance.

In Wisconsin, domestic corporations must pay a 7.9% franchise tax. Wisconsin also has a base retail sales and use tax of 5%. And, most counties will add an additional 0.5% onto the state’s base rate. But, there are a few other types of taxes you’ll need to know about:

Federal Taxes

• LLCs. Single-member LLC? By default, you’re taxed similar to a sole proprietor. More than one LLC owner? You’re taxed as a general partnership. Either way, your default tax status is “pass-through,” which means you don’t pay corporate taxes. Instead, your LLC’s owners report profits and losses on their personal tax returns. You’ll have to pay the 15.3% federal self-employment tax rate. An LLC can file paperwork with the IRS to be taxed as an S-Corp or C-Corp instead.
• Corporations. Corporations are taxed as C-Corps by default. This means that corporations pay the 21% federal corporate tax rate and the applicable Wisconsin corporate franchise tax rate. That rate is 7.9%.

To pay your federal taxes (and take a good deal of other steps required to start a business), you’ll need to get an Employer Identification Number (EIN). You can apply for one with the IRS or hire us to get one for you.

Local Wisconsin Business Taxes

Most counties in Wisconsin assess an additional 0.5% sales and use tax on top of what the state charges—making the grand total 5.5%. However, a small handful, such as Manitowoc and Racine, only assess the state rate of 5%.

If you want Wisconsinites to find your business, they have to be able to find you online. This means you’ll need a website, a business email account, and social media accounts. Don’t worry if you’re not especially tech-savvy—you don’t have to be a web developer or an influencer to establish a robust online presence. You’ll just need the following:

• Domain name. Your domain is the address where your website will live. You’ll want a domain name that is short, unique, local, and—most importantly—available. If your domain is trademarked, you could face legal trouble.
• Domain registrar. Once you’ve decided on a domain name, you’ll want to register it with a domain registrar. Some domains are more expensive than others. Some domain registrars also offer hosting and most will provide you with a business email that includes your domain name (“[email protected]”).
• SSL certificate. An SSL certificate signals to your users that your website is secure. If your website will use forms—like a sign-up form or a “contact us” form—an SSL certificate is critical. But even if you don’t you use forms, you’ll still probably want one—it allows an encrypted connection, which means your users’ data is transported securely. There are several types of SSL certificates, and you can often get one through your domain registrar.
• Site design. The easiest option is to use a free website creation tool—there are a number of free options available. Most are easy even for a newcomer to use, with styles and built in templates. For a more custom design, you can hire a web designer to work on your website, but this will be much more expensive.

Wisconsin businesses must file an annual report with the Department of Financial Institutions, Division of Corporate & Consumer Services. Your due date will vary depending on when you initially formed your business. As an example, let’s say you formed a business on May 14, 2022. Your first annual report would be due no later than June 30, 2023.

Read more about how to file a Wisconsin Annual Report.

A trademark is a design, symbol, word, phrase—or any combination thereof—that represents a brand’s goods or services exclusively. Only some businesses register trademarks.

You can apply to register your trademark with the State of Wisconsin or federally with the U.S. Patent and Trademark Office (USPTO). Registering your trademark in Wisconsin is cheaper and easier than registering with the USPTO, but doing so only protects your trademark in Wisconsin.

You can only register a trademark once you’ve started using it (so slap it on that website you just made), and not all applications are approved. Trademark law is complex, and the strength of a trademark application (and the trademark itself) depends on many factors.

Our attorneys can review your application, offer advice, and prepare and submit the application for you—Check out our Trademark Service.