Starting a corporation in Wisconsin comes with several advantages, such as favorable tax policies, strong infrastructure as well as rapid industrial development.
The following step-by-step guide will show you how to start a corporation in Wisconsin.
1. Select a name for your corporation
The first step in setting up a Wisconsin corporation involves selecting a business name. Additionally, the business name must be unique and adhere to Wisconsin naming requirements.
General corporate name guidelines
Keep the following Wisconsin corporation naming requirements in mind when deciding on your business name:
- Your Wisconsin corporation name must be distinguishable from other business entities in the state, including reserved names. Your Wisconsin corporation name may only use the word “corporative” in the business name of an approved Cooperative Association
- Wisconsin corporations must meet specific requirements in order to use words that give the impression or imply that it is engaged in the business of professional engineering, architecture, or designing
- Your Wisconsin corporation name cannot use the word “insurance” in a corporate name unless the business name makes clear that the corporation is not an insurance company
- Your Wisconsin corporation name must not suggest in any way that the corporation is organized for illegal or unlawful purposes or for any purposes that are not stated in its Articles of Incorporation
- Your Wisconsin corporation name must contain the word company, corporation, limited, Inc. or an abbreviation of the above-mentioned words
For additional guidance on naming a Wisconsin-based business entity, read through the Wisconsin state statute.
Trademarking a business name will protect it from intellectual property theft and misuse. A trademark is simply a slogan, word, design, or symbol that identifies the source of the business’s goods and services.
Additionally, it distinguishes it and makes it stand out from other business names. The purpose of a trademark is to ensure that your customers are never confused about who they’re doing business with.
If you’d like to go ahead and trademark your Wisconsin corporation name, there are several ways that you may do so.
The first option is to trademark your business name on the federal level via the US Patent and Trademark Office.
Next, you may trademark your Wisconsin corporation name with the Wisconsin Secretary of State, and this will give it statewide protection.
Lastly, you can have your Wisconsin corporation name trademarked at both the federal and state level.
Your Wisconsin corporation’s entity name is simply its legal or registered business name. This is the name that is used in all your formation documents as well as official correspondence with the government.
DBA (Doing-business-as) name
A DBA name which is short for [doing business as] name is also referred to as a trade name in the state of Wisconsin. The registration of a trade name allows your business to operate under a different name from its legal entity name.
However, simply registering a DBA will not protect your personal assets. However, it does come with several advantages, such as allowing you to legally transact under your trade name.
Before registering a DBA with the state of Wisconsin, you’ll need to go to the Department of Financial Institution’s website and conduct a trade name search.
Once you’ve confirmed whether the name is still available for use, you can go ahead and register your trade name online with the Department of Financial Institutions.
2. Nominate a registered agent
When filling out important documentation for the state of the state of Wisconsin, you will be asked to provide the details of your registered agent. The registered agent goes by the name of statutory and resident agent, as well; however, they all fulfill the same purpose.
The primary goal of this individual will be to accept compliance documents, government correspondence, and service of process on your corporation’s behalf. In some cases, they may also be required to process specific paperwork and notify you.
Therefore, it is required that your Wisconsin corporation nominate a resident agent. When it comes to nominating an individual to serve as your corporation’s statutory agent, they must meet the following requirements:
- The individual must be at least 18 years of age or older
- The individual must maintain availability during business hours to accept paperwork
- The individual must have a registered street address in the state of Wisconsin, and PO Box addresses are not allowed
- The statutory agent must consent to the appointment
While it is possible for a corporation owner to nominate themself as their own resident agent, it is not always advisable as there are pros and cons to this position.
3. Appoint initial directors at the organizational meeting
Calling an organizational meeting is one of the most important steps in forming a Wisconsin corporation.
During this important meeting, you’ll need to conclude a few tasks such as creating, ratifying, and approving bylaws, selecting a board of directors, and determining your Wisconsin corporation’s share structure as well as executing a Wisconsin corporation’s incorporator’s statement.
When it comes to appointing initial directors or a board of directors, the minimum requirement is at least one director. This individual will oversee the operations of the Wisconsin corporation until such time that the first shareholder meeting is called.
The corporate director will also be in charge of the adoption, repeal, and amendment of operational bylaws, as well as the removal, supervision, and election of corporate officers.
4. File Articles of Incorporation
Until your Wisconsin corporation files the Articles of Incorporation, it is not officially, nor is it legally created. Therefore, the articles is an important document that officially creates your Wisconsin corporation. Consequently, it will need to include some basic information pertaining to your corporation, such as:
- The number of shares the Wisconsin corporation is permitted to issue
- The Wisconsin corporation’s name
- The name and address of the Wisconsin corporation’s resident agent
- The names and addresses of the Wisconsin corporation’s incorporators
You should also note that the Articles of Incorporation Form available that the Wisconsin Department of Financial Institutions is only recommended for a new corporation with one share class. In the event that you plan on implementing multiple share class structures, then you must include an additional provision.
Once you get at the relevant information, go ahead and file the Articles of Incorporation online with the Wisconsin Department of Financial Institutions.
Alternatively, feel free to download the Articles of Incorporation Form and have it mailed to the Secretary of State at the following address:
State of WI – Dept. of Financial Institutions
P.O. Box 93348
Milwaukee, WI 53293-0348
You will receive a Certificate of Incorporation after filing your articles with the state’s office.
5. Create and approve bylaws
Any formal business structure in the state of Wisconsin must create corporate bylaws. The bylaws are basically the rules that determine how the organization is going to be governed. Essentially it is a Constitution for your Wisconsin corporation.
It also makes the priorities clear for all members of the corporation. Therefore, your corporation’s bylaws must supplement the rules laid down by the federal government as well as the state of Wisconsin.
When creating your corporate bylaws, ensure that it includes the following information:
- How the corporation will be overseen
- The roles and responsibilities of corporate officers and corporate directors
- The process of storing corporate records
- The process of holding annual meetings
- How voting procedures will be conducted
- How corporate directors and corporate officers will be nominated
- How the bylaws will be added or amended moving forward
- How company contracts will be negotiated
- The date of the annual shareholder meeting
The bylaws do not need to be filed with the state of Wisconsin. However, they must be kept on file in a safe place so that they can be accessed as and when needed.
Feel free to make use of the following bylaws templates and have them customized to suit the requirements of your Wisconsin corporation.
6. Select a share structure
The unit of ownership of a corporation is represented by each share of stock. So each share of stock indicates a ratio of ownership of the company.
So in the event that your corporation decides to issue one share of stock or issue stock in the form of one share to a shareholder, then a hundred percent of the corporation is owned by that specific shareholder.
Shares are also organized into classes. Additionally, it is known as a share class and holds a different set of rights and privileges. The Wisconsin corporation may have multiple classes, with each class holding any number of shares.
7. Obtain an EIN
All Wisconsin corporations are required by law to have an EIN. The EIN is short for Employer Identification Number, which is essentially a tax identification number.
This unique nine-digit code is issued by the IRS or federal government and is used as a way of identifying businesses in every state. Essentially, it works as a Social Security number for your company.
An EIN is useful in several instances, such as opening a business bank account, filing paperwork for tax purposes, and hiring employees for your company. To apply for and obtain an EIN is 100% free of charge.
The quickest way to obtain your EIN is to apply online on the IRS website. Alternatively, you are free to download the EIN Application Form and have it mailed directly to the Internal Revenue Service.
8. File Wisconsin state taxes
Depending on your business type of business structure, your Wisconsin corporation may be liable for one or more corporate taxes, aside from paying federal tax:
- Corporate income tax: Wisconsin’s corporation income tax is also known as the corporation franchise tax. It is essentially an economic development surcharge. Your business may be subject to either one or both of these taxes, depending on its legal form.
- Wisconsin employer taxes: If you plan on having employees, then you’ll need to register for and pay employer taxes. The registration must be done via the Wisconsin One-stop website.
- Sales tax: If you plan on selling physical goods in the state of Wisconsin, then you must register for a seller’s permit via the Wisconsin One-stop website. The application will result in a certificate allowing you to collect sales tax on the applicable goods you’re selling.
9. Wisconsin business licenses and permits
Depending on the type of corporation you’ve formed, you may need to secure one or more licenses and permits prior to operating legally in the state of Wisconsin:
Unlike other states, Wisconsin does not require a general business license in order for you to transact in the state.
- Occupational licenses and permits: Occupational licenses vary widely from lab analysts to cheesemakers and everything in between. So depending on the exact nature of your business, you may need an occupational license. However, you can confirm this with the Wisconsin Department of Agriculture, Trade, and Consumer Protection.
- Professional license: If you’re running a professional corporation offering services such as electrical contractors, cosmetologists, and barbers, then you need to obtain a professional license before being able to offer your services in the state.
10. Annual report requirements in Wisconsin
Wisconsin corporations are required to file an annual report via the Department of Financial Institutions. The due date for the annual report is the end of the anniversary of your Wisconsin corporation’s incorporation. You may file the annual report online.
11. Costs of starting a corporation in Wisconsin
The filing fees below apply to all Wisconsin corporations:
- Name reservation: $15
- DBA name: $15
- Articles of Incorporation: $100
- Annual report: $25
- Wisconsin Certificate of Good Standing: $10
Next steps after forming a corporation
After forming your Wisconsin corporation, it’s time to start thinking about protecting your business and personal assets. Here are a couple of ways to do so:
Get a business bank account and build your business’s credit score
One of the simplest ways to protect your business is to separate your personal finances from your business’s finances. Ultimately this will protect your personal assets and give you personal liability protection. It also helps to simplify the accounting and business tax filing processes.
In order to open up a business bank account for your Wisconsin corporation, you’ll need to submit your Employer Identification Number along with your corporation’s formation documents to the bank.
Once you’ve opened the business bank account, consider getting a credit card for your Wisconsin corporation. Having a business credit card helps to build your credit score, thereby allowing you to qualify for higher credit limits, loans, and capital to fund your Wisconsin corporation’s goals.
The most popular business structures out there are sole proprietorships, general partnerships, limited liability companies, nonprofit corporations, as well as C corporations, and S corporations.
While S corporations enjoy specific tax privileges, a C Corporation or C corp. comes with its own set of advantages. For example, it can have an unlimited number of owners as well as multiple classes of stock. However, on the flip side, it’s also subject to double taxation.
While many businesses are considered separate legal entities from their owners, this is not the case with sole proprietorships. In this case, there is no separation between the owner and the business structure. Therefore, the owner receives all income derived from the business, but is also liable for the taxes and liabilities of the company.
Electing to form a corporation is a bit more complicated than other types of business structures since there is more paperwork involved and more filing that needs to be done with the Secretary of State in the formation stage. However, it’s easier to get funding as a corporation.
It is possible to start a corporation if you have no money by taking into account who you know, investing what you can afford to lose, and experimenting and adapting.