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Starting an LLC in Wisconsin is a smart business move, but it’s essential to understand the costs involved beyond just the initial paperwork filing fee. While forming a Limited Liability Company might seem like a costly endeavor, it doesn’t have to be as expensive as you might think.
In this article, we’ll break down the various expenses associated with establishing an LLC in the Badger State, helping you navigate the process while also introducing you to valuable LLC services like ZenBusiness that can guide you toward savvy cost-saving strategies.
So, if you’re ready to embark on your entrepreneurial journey in Wisconsin, let’s explore the cost landscape of forming an LLC and discover how you can make the most of your investment.
What Is the Cost of Forming an LLC in Wisconsin?
The primary cost to form an LLC in Wisconsin revolves around a $130 fee required for the online submission of your LLC’s Articles of Organization to the Wisconsin Department of Financial Institutions.
Here’s the LLC Cost Guide for all US States:
Wisconsin Foreign LLC Formation Costs
If you currently operate an LLC registered in a different state and wish to extend your business operations into Wisconsin, it’s necessary to register your existing LLC as a foreign LLC in the state of Wisconsin.
The fee associated with registering a foreign LLC in Wisconsin is $100. To complete this registration process, you will need to submit a “Foreign Limited Liability Company Application for Certificate of Registration” (Form 521).
Annual Cost for LLCs in Wisconsin
Sustaining a successful Limited Liability Company (LLC) in Wisconsin involves comprehending and fulfilling the ongoing obligations and expenses linked to compliance and legal status. These encompass the submission of an annual report, priced at $25, to keep the state informed about essential LLC details such as ownership and management.
Additionally, if you employ a trade name, it must be renewed every decade for a $15 fee. While designating a registered agent is mandatory for Wisconsin LLCs, you have the option to serve as your own agent at no cost or employ a commercial registered agent service, typically costing between $100 to $300 annually.
By adhering to these ongoing requirements and staying compliant with relevant regulations, you can ensure the continued legal and financial health of your Wisconsin LLC.
How Much Does It Cost to Start an LLC in Wisconsin With the Best LLC Service?
ZenBusiness LLC Formation Cost
The initial cost to establish an LLC in Wisconsin starts at $130 but can increase based on additional services. Regarding processing time, the standard processing period typically spans 2 to 3 weeks. However, you have the option to expedite the process, which will shorten it to 3 to 5 days for an extra fee of $50, or rush it even further to 1 to 2 days for a fee of $100.
ZenBusiness presents three distinct pricing tiers for their business formation services: Starter, Pro, and Premium.
- Starter plan: The ideal for basic business formation requirements, comes at a cost of $0, with state fees as an additional expense.
- Pro plan: The encompasses added benefits such as expedited filing and registered agent services, available at a price of $199, along with state fees.
- Premium plan: For those seeking the most comprehensive package, the includes all features from the Pro plan, along with unlimited Worry-Free Compliance to aid businesses in adhering to state and federal regulations. The Premium plan is priced at $349, plus state fees.
Furthermore, ZenBusiness extends an offer of a complimentary year of Worry-Free Compliance with the purchase of any plan.
Additional Costs When Starting an LLC in Wisconsin
Wisconsin LLC Name Costs
Selecting a name for your Limited Liability Company in Wisconsin comes at no charge, as the state’s Department of Financial Institutions (DFI) does not mandate the filing of a Name Reservation during the LLC formation procedure. Instead, your chosen Wisconsin LLC name gains approval, at no additional expense, when your Articles of Organization receive approval from the state.
However, if you wish to reserve your LLC name for a period of up to 120 days before formally initiating the LLC formation process, you can achieve this by submitting Form 1 and remitting the required filing fee of $15.
Wisconsin Registered Agent Costs
In Wisconsin, there’s a requirement to designate a registered agent when establishing your LLC. This registered agent, whether an individual or a company, serves as the recipient of legal documents and state notifications on behalf of your LLC and must maintain a physical address within Wisconsin, generally being available during standard business hours.
If you choose to act as your own registered agent or have someone you know to fulfill this role, there’s no additional cost involved, and it remains at $0.
Alternatively, you have the option to enlist the services of a registered agent Service, which typically incurs an annual fee of approximately $125. While this comes with an expense, registered agent Service providers offer supplementary business services and can safeguard your privacy.
Engaging a registered agent Service is particularly advisable if you lack an address within the state, as Wisconsin law mandates registered agents to possess a physical address in Wisconsin. Additionally, if you wish to keep your address confidential from public records, some registered agent Service companies may allow you to utilize their address for this purpose, offering an added layer of privacy.
Wisconsin Operating Agreement Costs
The Wisconsin LLC Operating Agreement, an essential written contract defining crucial aspects of LLC ownership, management, and profit distribution among its members, incurs no additional fees being offered at $0. It’s recommended for both Single-Member and Multi-Member LLCs to create and retain an Operating Agreement as part of their business documentation, providing each member with a copy for reference.
Notably, many online platforms typically charge between $50 to $200 for similar LLC Operating Agreements.
Wisconsin EIN Cost
The cost for obtaining an LLC EIN Number, which is also referred to as an Employer Identification Number (EIN) or a Federal Employer Identification Number (FEIN), is $0. This unique identifier plays a pivotal role in various aspects of business operations, including income tax filing, establishing an LLC bank account, and, if applicable, hiring employees.
While many websites offer EIN acquisition services for a fee, it’s important to note that you can obtain your LLC’s EIN from the Internal Revenue Service (IRS) completely free of charge. The online application process is straightforward and can be completed in just a few minutes.
Wisconsin LLC Taxes
The annual expenses for Wisconsin LLC owners can fluctuate significantly due to the various types of taxes they’re obligated to pay. These taxes encompass:
Federal Income Taxes
The Internal Revenue Service (IRS) offers several tax treatment options for Limited Liability Companies (LLCs). In the case of Single-Member LLCs, the default status designates them as Disregarded Entities. This means that the IRS does not require the LLC to file its own federal income tax return.
Instead, the owner of the Single-Member LLC is responsible for filing the return and paying federal income taxes. The specific federal income tax payment method is contingent on the LLC’s ownership structure. If the LLC is owned by an individual, it’s taxed similarly to a Sole Proprietorship. If owned by another company, it’s treated as a branch or division of the parent company.
Multi-Member LLCs are subject to default taxation as Partnerships. This entails the LLC filing a 1065 Partnership Return and issuing a Schedule K-1 to the LLC owners. The Schedule K-1 outlines each owner’s share of profits, and this income “flows through” to the individual owners. Subsequently, each owner is responsible for paying income taxes on their personal income tax return (Form 1040).
Husband and Wife LLC Taxes
In community property states like Wisconsin, husband and wife LLCs have the option to choose between filing taxes as a Single-Member LLC (referred to as a Qualified Joint Venture) or a Multi-Member LLC. This choice can be made during the application for an Employer Identification Number (EIN), or, alternatively, by sending a letter to the IRS.
In the absence of such a choice, a husband and wife Wisconsin LLC defaults to being taxed as a Partnership.
Election of Corporate Taxation
LLCs have the flexibility to opt for Corporate tax treatment by submitting the appropriate forms to the IRS.
For S-Corporation status, an LLC can file Form 2553. This election can be beneficial for businesses with established profits, as it can lead to savings on self-employment taxes. However, it’s essential to note that there are additional expenses associated with S-Corporation taxation, making it advisable for new business owners to consult with their accountant and consider this option only when their business is established and has consistent revenue.
Conversely, an LLC can request C-Corporation taxation by filing Form 8832. This election is less common and is primarily advantageous for larger employers seeking cost savings on healthcare fringe benefits. Nevertheless, most LLCs do not choose to be taxed as C-Corporations.
Wisconsin State Income Tax for LLCs
In Wisconsin, the tax treatment of LLCs varies based on their structure.
Single-Member LLCs typically do not file state-level returns themselves. Instead, the owner includes the LLC’s profits or losses in their personal state-level tax return. In contrast,
Multi-Member LLCs may be required to file a Partnership return at the state level, with individual owners reporting the LLC’s profits or losses on their personal state-level tax returns.
Additionally, certain industries and business types in Wisconsin may be subject to specific state taxes. Given the complexity of these tax matters, it’s strongly recommended that LLC owners seek the services of an accountant to prepare and file their state income taxes. Alternatively, they can contact the Wisconsin Department of Revenue for detailed information on state tax requirements.
Local Income Tax for LLCs in Wisconsin
LLCs in Wisconsin may be required to file and pay income taxes at the local municipality level, such as town, city, or county. It’s recommended to hire an accountant for assistance or contact the relevant municipality to understand local tax requirements.
Wisconsin Sales Tax
When conducting sales to consumers in Wisconsin, it may be necessary to collect sales tax and obtain a Seller’s Permit from the Wisconsin Department of Revenue (DOR). A Seller’s Permit serves as the license that authorizes you to collect sales tax on retail sales conducted within the state. This permit is sometimes referred to interchangeably as a resale license, wholesale license, sales tax permit/license, or reseller permit.
To learn more about Wisconsin’s sales tax requirements and permits, consult the resources provided by the Wisconsin DOR, including information on necessary permits and use tax regulations.
Wisconsin LLC Payroll Taxes
If your Wisconsin LLC has employees, you must handle various payroll taxes, including federal and state income tax withholding, Social Security tax, Medicare tax, and unemployment taxes. The complex calculations and potential penalties make it advisable to use a payroll company or consult an accountant for payroll tax management.
Wisconsin LLC Cost FAQs
How Much Does It Cost to Open an LLC in Wisconsin?
The Wisconsin filing fee for the Articles of Organization, whether submitted by mail or through Wisconsin’s One Stop business portal, amounts to $170. However, there’s a $40 discount available for online submissions via the DFI’s QuickStart LLC system, reducing the fee to $130. This fee represents a one-time payment to the Wisconsin Department of Financial Institutions (DFI) for LLC formation.
How Much Does an LLC in Wisconsin Cost Per Year?
Certainly, every Wisconsin LLC is required to remit an annual fee of $25 for the Annual Report, which is essential for maintaining the LLC’s good standing status, and these state fees are directed to the Wisconsin Department of Financial Institutions (DFI). Additionally, if you opt for a registered agent service, you will incur an annual fee, typically around $125.
For certain LLCs, the necessity of a business license in Wisconsin hinges on factors such as industry type and geographic location, and it’s advisable to consult with your local municipality to ascertain whether any annual fees apply to your business license.
Should I Hire an LLC Formation Service?
While it’s not obligatory to engage a professional service company for your Wisconsin LLC formation, you have the freedom to establish your LLC independently. Nevertheless, for a streamlined and error-free process, we recommend considering ZenBusiness.
ZenBusiness not only provides exceptional customer service but also includes the first year of registered agent services at no additional cost. Additionally, it also offers valuable services such as assistance with crafting an Operating Agreement and managing the Annual Report filing, ensuring a comprehensive and hassle-free LLC setup experience.
In conclusion, the process of forming an LLC in Wisconsin goes beyond the initial filing fee. It involves navigating through various financial considerations, such as obtaining necessary documentation, enlisting the help of registered agents, and addressing critical elements like operating agreements and obtaining an EIN.
By understanding these multifaceted costs and harnessing the support of ZenBusiness, prospective entrepreneurs can embark on their Wisconsin LLC journey with confidence.
- How to Register a Business in Wisconsin
- How to Register a Business Name in Wisconsin
- Wisconsin Anonymous LLC
About the author
Dr. Alexander Sterling, Esq, a distinguished legal scholar with a business law degree and a Doctor of Juridical Science, is a leading expert in business registration and diverse business departments. Renowned for his academic excellence and practical insights, Dr. Sterling guides businesses through legal complexities, offering invaluable expertise in compliance, corporate governance, and registration processes.
As an accomplished author, his forthcoming book is anticipated to be a comprehensive guide for navigating the dynamic intersection of law and business, providing clarity and practical wisdom for entrepreneurs and legal professionals alike. With a commitment to legal excellence, Dr. Alexander Sterling, Esq, is a trusted authority dedicated to empowering businesses within the ever-evolving legal landscape.