How to Start a Business in Wisconsin
Starting a business in Wisconsin can be as simple as selling a product or service. If you do that without filing paperwork with the state, you’re automatically classified as a sole proprietor. But there are other cool reasons to start a business in Wisconsin, like the Business Development Tax Credit—which rewards businesses for supporting job creation within The Badger State. That said, you’ll want liability protection, so your personal assets will be protected against business related-debts. Our complete guide will show you how.
Ready to Start a Business in Wisconsin?Let's Get You Started
Pick an Entity Type
Name Your Business
File Formation Paperwork
Draft Internal Records
Get Wisconsin Business Licenses
Organize Your Money
Get Business Insurance
Understand Your Tax Burden
Build Your Business Website
File a Wisconsin Annual Report
Apply for Trademarks
1. Pick an Entity Type
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.
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.
Can an LLC be just one person?
Yes! A one-person LLC is called a single-member LLC. Single-member LLCs are one of the most common kinds of businesses in the country. For the most part, single-member LLCs are just like multi-member LLCs, but there are some slight differences in how they file taxes and protect personal assets.
Read all about Single-Member LLCs.
What about a Wisconsin nonprofit?
You can start a Wisconsin nonprofit corporation if your business will exist for a public benefit. For example, you might start a charity to buy holiday presents for single-parent families or provide meals for the local homeless population. To start a nonprofit in Wisconsin, you’ll need to file paperwork with the Wisconsin Department of Financial Institutions, Division of Corporate & Consumer Services.
Want to learn more? Check out our Nonprofit Guide.
2. Name Your Business
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.
Can I reserve a business name in Wisconsin?
Yes, you can. If you have a business name in mind but are waiting to start your business, you can reserve your business name for 120 days by submitting a Name Reservation Application to the Department of Financial Institutions, Division of Corporate & Consumer Services. The filing fee is $15.
What is a DBA?
A DBA is a name your business uses besides its legal name. If you’re a sole proprietor, your human name will also be the legal name of your business unless you get a DBA. For an LLC or corporation, your business’s legal name will be what you list on your formation paperwork.
What about trademarked names?
It’s a good idea to check with the US Patent and Trademark Office (USPTO) to make sure your business name hasn’t been trademarked by someone else. If it has, and you use it anyway, there’s a chance that the business could come after you for infringement.
3. File Formation Paperwork
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.
How can I keep my information off the public record?
Keeping your private information off the public record can seem like an insurmountable challenge, but the answer is easier than you think: get a registered agent that allows you to list their address instead of yours. Hiring a registered agent service (like us) helps you maintain your privacy.
What is a registered agent?
A registered agent is the person or entity who is responsible for receiving state and legal mail on behalf of your business. A Wisconsin registered agent can be either an individual or a business. They must have a physical office in the state. The agent must be available during standard business hours to accept legal and state documents on behalf of your business. They must also have a reliable way to get important mail to you.
4. Draft Internal Records
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.
5. Get Wisconsin Business Licenses
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.
How do I get a Wisconsin business license?
You submit an application to the proper state agency. Make sure to include information like your business name and address, along with any required fees.
How much does it cost to get a Wisconsin state business license?
The cost of a business license in Wisconsin will vary depending on the type of license you’re seeking. For instance, a Wisconsin private detective license costs $135. A bed and breakfast licensing fee is $110 a year plus a one-time fee of $300.
How do I get a local business license?
Each city has different requirements and fees. Checking your local government’s website is a good way to get started. For example, a bartender in Milwaukee must submit an application to the city clerk’s office, complete a responsible beverage server course, and pay a $75 licensing fee.
6. Organize Your Money
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.
How do you set up a business bank account?
LLCs and corporations will need to provide the bank with their formation documents, operating agreement or corporate bylaws, EIN, and in some cases, a Corporate Resolution to Open a Bank Account or LLC Resolution to Open a Bank Account.
Do I need a business bank account to accept credit card payments?
Probably. Payment processors require you to provide them with a bank account. This is where they’ll deposit funds from transactions. Most of the time, this needs to be a business bank account.
Some payment processors may let you get away with listing a personal bank account, but it’s not a great idea. Mixing your business finances with your personal finances erodes the separation between you and your business, weakening your liability protection. It also turns tax season into a nightmare.
Learn more about Payment Processing.
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.
What forms do my employees need to fill out?
Your new employees will need to fill out a W-4 to determine how much you’ll withhold and an I-9 to verify that the employee is eligible to work in the US.
What's the difference between an independent contractor and an employee?
It’s important to understand the difference between an independent contractor and an employee. That’s because for employees, you’ll need to withhold and pay income, social security, and Medicare taxes. Independent contractors pay these taxes on their own.
An independent contractor is self-employed—how they complete their work is not directly controlled by an employer. An independent contractor may perform the same kind of work for other businesses, and can do the work when and how they choose.
An employee, on the other hand, performs their work how and when their employer chooses.
If you’re unsure, you can file Form SS-8 with the IRS and let them decide.
Learn everything you need to know about hiring independent contractors.
How do I get a Wisconsin Withholding Tax Number?
Fill out an Application for Business Registration online or by mail and pay a $20 registration fee. Expect a processing time of about two business days if you file online and about 15 business days if you file by mail.
7. Get Business Insurance
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.
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.
Do business owners need workers compensation insurance in Wisconsin?
Whether or not you (the business owner) need workers compensation insurance depends on a couple of factors. Members of limited liability companies don’t need workers compensation insurance. But in a corporation, corporate officers (who may also be owners) are considered workers and should be covered by workers compensation insurance.
That said, workers compensation insurance is still a good idea for business owners, even if it’s not required. Like any other worker, having this insurance can save you money if you get hurt on the job.
Do I need business insurance for my home-based business?
Probably. That’s because you can’t count on your homeowners’ or renters’ insurance policy to cover damages related to your business. Most insurance companies offer a home-based business insurance plan.
8. Understand Your Tax Burden
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:
- 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.
Do I need an EIN if I'm self-employed?
If you’re operating a sole proprietorship or single-member LLC that doesn’t employ anyone else and you don’t need to file excise or pension plan returns, you don’t legally need an EIN.
However, you can still get one—and you probably should. Otherwise, you’ll have to use your own social security number to do business. Plus, you’ll likely need an EIN to open a business bank account.
How do I get an EIN?
To get an EIN, you can either apply online or file form SS-4 by mail with the IRS. Getting an EIN is free.
Check out our guide to applying for an EIN.
What is an S-Corp?
An S-Corporation is a federal tax election. Registered business entities like LLCs and corporations start out with a default tax status, but can file paperwork with the IRS to be taxed as an S-Corp. Like LLCs, S-Corps are taxed as pass-through entities. Like corporations, S-Corps can make distributions that aren’t subject to the 15.3% self-employment tax.
Learn more about the S-Corp tax election.
What is a C-Corp?
A C-corporation is the default federal tax election assigned to corporations. Most corporations are taxed as C-Corps, but LLCs can also apply for C-Corp tax designation by filing paperwork with the IRS. C-corps file federal corporate income taxes and state corporate income taxes (in Wisconsin, the corporate franchise tax rate is 7.9%). C-corps can pay their shareholders in distributions, and the shareholders report those profits on their personal tax returns.
Learn more about the C-Corp tax election.
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%.
9. Build Your Business Website
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 (“firstname.lastname@example.org”).
- 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.
10. File a Wisconsin Annual Report
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.
What if I don't file an annual report in Wisconsin?
Wisconsin doesn’t charge late fees if you fail to file your annual report on time. However, your business can be administratively dissolved by the state.
11. Apply for Trademarks
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.
How do I register for a trademark in Wisconsin?
You can register a trademark by going through the state’s online trademark filing system. You need to register for a free account first. You’ll have to pay a $15 fee for each name, phrase, design or logo that you want to register. As of March 2020, trademark filings must be made either online or in person.
It’s important to note that trademark registration is not required in Wisconsin. That means there’s a chance someone could be using the same trademark as you even if you don’t see them listed in the state’s database.
Can I register a trademark before I use it?
No. But you can file an application with the USPTO under Intent-to-Use status. This gets your application in line before you’ve actually used the mark, which could be helpful if you’re worried someone else might register your mark before you’ve had a chance to use it.
For your trademark to become official, you’ll eventually need to show proof that you’re using it. An Intent-to-Use application buys you some time to do that.
Learn more about filing an Intent-to-Use Trademark.