Starting a Corporation in Wisconsin | What You Need to Know

Start a Corporation in Wisconsin

In Wisconsin, starting a corporation can benefit entrepreneurs looking to establish a separate legal entity for their business. Incorporating your business provides liability protection for its owners and offers potential tax benefits and a professional image. This comprehensive guide will walk you through Starting a Corporation in Wisconsin, from choosing a corporate name to fulfilling ongoing compliance requirements. Some people consider starting a corporation since it has advantages and benefits rather than Starting an LLC in Wisconsin.

Webinarcare Editorial Team will help you gain knowledge in starting a corporation with thorough research and market study. It would be best to cross-check all the factors in this article before forming a corporation.

What is a Corporation in Wisconsin?

A corporation in Wisconsin is a business organization recognized as a separate legal entity from its owners, also known as shareholders. When a corporation is formed, shareholders invest capital by purchasing shares of stock and, in return, become partial company owners. The corporation is managed by a board of directors elected by the shareholders to oversee the company’s operations and make important decisions. Corporations in Wisconsin are required to have at least Three directors. One of the main advantages of a corporation in Wisconsin is that it provides limited liability protection to its shareholders, meaning their assets are not at risk if the corporation incurs debt or is legally sued.

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Common Types of Corporations

Before you start with a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

C-Corporation

C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.

S-Corporation

S-Corporation in Wisconsin is set up similarly to a C-corporation but has different tax implications and owner limits. An S-Corporation has no more than 100 stockholders and is not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.

Nonprofit Corporation

Religious, educational, and charity institutions frequently use nonprofit businesses to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations.

It is recommended to Start a Corporation in Wisconsin if you would like to provide limited liability protection to your shareholders rather than Wisconsin LLC. However, you may want to consult to LegalZoom’s Business Attorney before starting a business.

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How to Start a Corporation in Wisconsin

To start a corporation in Wisconsin, you must follow the below steps that, include choosing a corporate name, hiring a Registered Agent, appointing directors, filing for Articles of Incorporation, creating corporate bylaws, holding the initial board of directors, issuing stock, obtaining required licenses and permits, registering with state tax agencies, and annual reporting and ongoing compliance. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choosing a Corporate Name

The first step in starting a corporation is choosing an available name that complies with Wisconsin naming rules. Most states require that the name of a corporation be distinguishable from other registered business names and include a corporate designator such as “Corporation,” “Incorporated,” “Company,” or an abbreviation thereof.

Here are some guidelines you must follow while naming your corporation in Wisconsin-

  • Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
  • Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

To check the availability of your desired corporate name, you can search the Wisconsin Secretary of State‘s business name database and Business Name Search in Wisconsin. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of $15 and mail name reservation fee of $15. If your corporation plans to operate under a name other than its legal name, you may also need to register a fictitious or “doing business as” (DBA) name.

The DBA filing can be done by two methods, by mail and in person., which costs around $15. In addition, the DBA’s validity in Wisconsin is ten years, which you can file in Wisconsin Secretary of State.

You can check out How to File a DBA in Wisconsin for clearer understanding.

Step 2: Hire a Registered Agent

Hiring a Registered Agent is essential in starting a corporation. Registered Agent is a person or company responsible for receiving important legal documents, tax notices, and other correspondence on behalf of your corporation. They ensure that your corporation remains compliant with state regulations and requirements. There are Wisconsin Registered Agent Services to check in forming Wisconsin Corporation. We reviewed some of the best-registered agent services and provided features as an add-on with their packages.

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Step 3: Appointing Directors

Corporations in Wisconsin are required to have at least Three directors, though some states may require more. Directors are responsible for overseeing the corporation’s management and making major decisions on behalf of the company. In Wisconsin, directors must be at least 18 years old and do not need to be state residents.

When appointing directors, it is essential to consider individuals who are knowledgeable, trustworthy, and capable of making sound business decisions. Maintaining a record of appointed directors, including their names, addresses, and terms of service, is also a good idea.

Step 4: Preparing and Filing Articles of Incorporation

After you appoint the initial board of directors in your Wisconsin corporation, the next step is to write and file a Articles of Incorporation. In writing, the Wisconsin Articles of Incorporation, the corporation name, principal place of business, the purpose of business, Registered Agent contact information, and the names and addresses of incorporators and initial board members, should be written.

To officially form your Wisconsin corporation, you must prepare and file Articles of Incorporation with the Wisconsin Secretary of State. The Articles of Incorporation is a legal document that outlines essential information about your corporation, such as its name, address, purpose, and details about its stock.

The specific requirements for Articles of Incorporation vary by state, but generally, the document must include the following:

  • The corporate name
  • The purpose of the corporation
  • The name and address of the registered agent
  • The names and addresses of the initial directors
  • The number of authorized shares and their par value
  • The name and address of the incorporator(s)

Once the Articles of Incorporation are complete, please submit them to the Wisconsin Secretary of State’s office, along with the required filing fee. Fees vary by state, but in Wisconsin, the Articles of Incorporation filing fee costs around $100 for online and by mail filing. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

  • Online Filing: Create an account/Log in to the SOS site, get the e-form, fill it, and submit online. Or get the online PDF, fill it up and upload it back on the site.
  • Offline filing: Send the form by mail to State of WI – Dept. of Financial Institutions, P.O. Box 93348, Milwaukee, WI 53293

Step 5: Creating Corporate Bylaws

Now you are done filing Articles of Incorporation in Wisconsin, the next step is to draft corporate bylaws. While not always required by law, creating corporate bylaws is essential in establishing Wisconsin corporation. Bylaws are the internal rules and regulations that govern the corporation’s operations and management. They outline the rights and responsibilities of directors, officers, and shareholders and provide guidelines for holding meetings and making decisions.

Key provisions to include in your corporate bylaws may include:

  • The corporation’s purpose and principal place of business
  • The roles and responsibilities of directors, officers, and shareholders
  • The process for appointing and removing directors and officers
  • The procedures for holding annual and special meetings
  • The methods for amending the bylaws and Articles of Incorporation
  • The procedures for issuing stock and maintaining shareholder records

Once the bylaws are drafted, they must be adopted by the corporation’s board of directors. Keeping a copy of the bylaws with your corporate records and updating them to reflect changes in the corporation or applicable laws is essential.

Step 6: Holding the Initial Board of Directors Meeting

The initial board of directors meeting is a crucial milestone for your Wisconsin corporation. During this meeting, the directors will adopt the corporate bylaws, elect officers, and make other key decisions to set the foundation for the corporation’s operations.

The agenda for the initial board meeting may include the following:

  • Adopting the corporate bylaws
  • Ratifying any pre-incorporation actions taken by the incorporator(s)
  • Electing corporate officers (e.g., president, vice president, secretary, treasurer)
  • Designating a corporate bank account
  • Authorizing the issuance of stock
  • Approving necessary licenses, permits, and tax registrations

It is essential to keep detailed minutes of the initial board meeting, documenting the decisions made and actions taken. These minutes should be stored with your corporate records.

Step 7: Issuing Stock

Corporations in Wisconsin are required to issue stock to their owners, also known as shareholders. When preparing to issue stock, you must determine the number of authorized shares and their par value, as outlined in your Articles of Incorporation. You may choose to issue different classes of stock, each with its rights and privileges, such as voting rights and dividend preferences.

The process for issuing stock typically involves the board of directors approving a stock issuance resolution, determining the price per share, and recording the issuance in the corporation’s stock ledger. Maintaining accurate and up-to-date records of all stock transactions, including transfers and cancellations, is crucial to ensure proper ownership tracking and compliance with securities laws.

Step 8: Obtaining Required Licenses and Permits

Depending on the nature of your corporation’s activities and location, you may need to obtain various licenses and permits to operate legally. These may include federal, state, and local requirements, such as:

  • A Federal Employer Identification Number (EIN) for tax reporting and employee withholding purposes.
  • State sales and use tax registration, if your corporation sells taxable goods or services
  • Professional or occupational licenses for specific industries (e.g., healthcare, construction, food service)
  • Wisconsin Business Licenses, zoning permits, and health department approvals

Researching and obtaining all required Wisconsin licenses and permits before commencing operations and maintaining compliance with any ongoing renewal or reporting requirements is essential.

Step 10: Registering with State Tax Agencies

In addition to obtaining licenses and permits, your Wisconsin corporation may also need to register with various tax agencies. This may include registering for sales and use tax, obtaining an Employer Identification Number (EIN) in Wisconsin for payroll tax purposes, and filing state income tax and franchise tax returns.

An EIN will serve as the tax ID for your Wisconsin corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Wisconsin can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Each state has tax requirements, so consult a tax professional or Wisconsin Department of Revenue for guidance on your specific obligations.

Step 11: Annual Reporting and Ongoing Compliance

Once your Wisconsin corporation is up and running, you must fulfill ongoing reporting and compliance requirements to maintain good standing. This may include filing Annual Report with the Wisconsin Secretary of State, updating your corporate records to reflect changes in directors or officers, and staying current on any required licenses or permits.

In addition, it is essential to stay informed about changes in corporate laws and regulations that may impact your business and to seek professional advice when needed.

Paying Your Taxes in Wisconsin

Even if you have established your corporation in Wisconsin, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Wisconsin has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Wisconsin are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Wisconsin

In forming a corporation in Wisconsin, a filing and Annual fee must be paid. Without it, your corporation won’t operate. A corporation’s initial filing fee may vary from state to state. However, in Wisconsin, it costs $100 for online and by mail filing. The corporation in Wisconsin also has to file an Annual Report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly.

FAQs

What is a corporation?
A corporation is a legal entity established under state law that is separate and distinct from its owners.
Can a corporation protect my personal assets from business debts?
Yes, a properly formed and maintained corporation can limit your personal liability for business debts or legal matters.
What is required to form a corporation in Wisconsin?
To form a corporation in Wisconsin, you’ll need to file the Articles of Incorporation with the Wisconsin Department of Financial Institutions, appoint a registered agent, and obtain any necessary business licenses and permits.
How much does it cost to form a corporation in Wisconsin?
The standard filing fee for the Articles of Incorporation in Wisconsin is $100, with an optional expedited processing fee of $25.
How long does it take to form a corporation in Wisconsin?
The standard processing time for Articles of Incorporation in Wisconsin is 5 to 10 business days.
Can I form a corporation online in Wisconsin?
Yes, you can file the Articles of Incorporation online through the Wisconsin Department of Financial Institutions’ website.
Do I need to have a physical office in Wisconsin to form a corporation there?
No, you do not need to have a physical office in Wisconsin to form a corporation, but you will need to appoint a registered agent located in the state.
Who can be a registered agent for my corporation in Wisconsin?
A registered agent in Wisconsin can be an individual resident of the state or a commercial registered agent service.
What is the minimum number of directors required for a corporation in Wisconsin?
Wisconsin requires one or more directors to be elected by the shareholders of a corporation.
Can non-US citizens form a corporation in Wisconsin?
Yes, there is no citizenship requirement to form or own a corporation in Wisconsin.
What is an EIN, and do I need one for my Wisconsin corporation?
An EIN is an Employer Identification Number, which is often required by the IRS for tax purposes. Your Wisconsin corporation will need an EIN if you have employees or if you are taxed as a separate entity.
Does my corporation need to have an operating agreement in Wisconsin?
While not legally required, an operating agreement can help establish rules and expectations for how your corporation will operate and manage its finances.
How often do corporations need to file annual reports in Wisconsin?
Corporations in Wisconsin are required to file an Annual Report with the Department of Financial Institutions each year.
Can I dissolve my corporation in Wisconsin if it doesn’t make a profit?
Yes, you can dissolve a Wisconsin corporation for any reason as long as the proper procedures for winding down the business are followed.
Can I change the name of my Wisconsin corporation after it has been formed?
Yes, you can modify the name of your Wisconsin corporation as long as the new name is available and approved by the Wisconsin Department of Financial Institutions.
Is there a limit on the number of shareholders a corporation can have in Wisconsin?
No, there is no limit on the number of shareholders a corporation can have in Wisconsin.
What is the corporate income tax rate in Wisconsin?
Wisconsin state corporate income tax rates currently stand at 7.9%.
How are corporations taxed in Wisconsin?
Wisconsin corporations are taxed on their earnings and profits at the state level, and any additional business income is reported and taxed at the federal level.
Do corporations in Wisconsin have to pay franchise taxes?
Yes, corporations in Wisconsin are required to pay an annual franchise tax that varies depending on the corporation’s income.
Can corporations in Wisconsin also be S-corps?
Yes, corporations in Wisconsin can elect to be taxed as S corporations under certain conditions.
Who is responsible for protecting the corporation’s intellectual property in Wisconsin?
The corporation is responsible for protecting its own intellectual property in Wisconsin and should consider securing patents, trademarks, copyrights, and trade secrets where appropriate.
Can I elect a national corporation to serve as the registered agent for my Wisconsin corporation?
Yes, a national registered agent service can be used as long as they have a physical presence and are authorized to act as a registered agent in Wisconsin.
Are there any residency requirements for corporate officers or directors in Wisconsin?
No, there are no residency requirements for officers or directors of a Wisconsin corporation.
How long can corporations operate in Wisconsin?
There is no specific time limit on how long a corporation can operate in Wisconsin—the corporation can continue to operate as long as it is properly maintained.
What if I forget to file an Annual Report for my Wisconsin corporation on time?
If you miss the deadline to file your Annual Report in Wisconsin, there is a late fee, and the corporation will be considered delinquent until the report is filed.
Are there any restrictions placed on the types of businesses that can form a corporation in Wisconsin?
Most types of businesses can form a corporation in Wisconsin, but there may be some restrictions or requirements specific to certain industries or business types.
Can I form a nonprofit corporation in Wisconsin?
Yes, nonprofits can form a corporation in Wisconsin but are subject to specific regulations and registration requirements.
Are corporations required to hold annual shareholder meetings in Wisconsin?
Wisconsin requires corporations to hold annual meetings for shareholders but may have some flexibility in scheduling and conducting these meetings.
How can I change the tax status of my Wisconsin corporation from C-corp to S-corp?
To change the tax status of your Wisconsin corporation, you’ll need to file an election with the IRS and obtain approval from the state of Wisconsin.
How do I start a corporation in Wisconsin?
You will need to file articles of incorporation with the Wisconsin Secretary of State.
What are the benefits of forming a corporation in Wisconsin?
Benefits include limited liability protection, ability to raise capital, and simplified ownership and management.
How much does it cost to start a corporation in Wisconsin?
The filing fee for articles of incorporation is $100 in Wisconsin.
Do I need to hire a lawyer to start a corporation in Wisconsin?
No, you can complete the process on your own, but consulting with a lawyer can be helpful for legal guidance.
What information is required on the articles of incorporation in Wisconsin?
You will need to provide the corporation’s name, registered agent information, and the incorporator’s name and address.
How long does it take to start a corporation in Wisconsin?
Typically, it takes a few weeks to process the articles of incorporation in Wisconsin.
Are there any specific requirements for naming the corporation in Wisconsin?
The name must contain the words “corporation,” “incorporated,” “limited,” or “company.”
Can I reserve a name for my corporation in Wisconsin?
Yes, you can reserve a name for 120 days by filing a name reservation application with the Wisconsin Secretary of State.
Do I need a registered agent in Wisconsin?
Yes, you will need a registered agent in Wisconsin with a physical street address in the state.
Can I act as my own registered agent in Wisconsin?
Yes, as long as you have a physical street address in Wisconsin and are available during business hours.
Do I need to file an annual report in Wisconsin?
Yes, corporations must file an annual report with the Wisconsin Secretary of State each year.
How much are annual report fees in Wisconsin?
The fee for annual reports is $25 in Wisconsin.
Can I file my annual report online in Wisconsin?
Yes, you can file online or by mail in Wisconsin.
How many directors must a corporation have in Wisconsin?
A corporation in Wisconsin must have at least one director.
How many shareholders must a corporation have in Wisconsin?
There is no minimum number of shareholders required in Wisconsin, but there must be at least one.
Can a non-resident be a director or shareholder of a Wisconsin corporation?
Yes, there are no residency requirements for Wisconsin directors or shareholders.
What are the tax benefits of starting a corporation in Wisconsin?
Corporations in Wisconsin are subject to a flat 7.9% tax rate on taxable income.
What types of businesses can form a corporation in Wisconsin?
Any type of business can form a corporation in Wisconsin.
Is there a minimum capital requirement for starting a corporation in Wisconsin?
No, there is no minimum capital requirement for corporations in Wisconsin.
What is a Wisconsin Registered Agent?
A registered agent is a designated individual or entity that receives legal documents and correspondence on behalf of the corporation in Wisconsin.
Why do I need a Wisconsin Registered Agent?
The Secretary of State requires all corporations in Wisconsin to have a registered agent listed with their office.
How do I change the name of my Wisconsin corporation?
You can change the corporation’s name by filing an Articles of Amendment with the Wisconsin Secretary of State.
Can I expand my Wisconsin corporation to other states?
Yes, you can expand into other states by filing foreign qualification paperwork.
What is a Wisconsin corporate bylaws?
Bylaws are internal documents outlining the key operating procedures and rules for a corporation in Wisconsin.
Are there template Wisconsin bylaws are available?
Yes, there are many online resources that provide free and paid customizable templates for Wisconsin corporate bylaws.
What records do I need to keep for my Wisconsin corporation?
Wisconsin corporations are required to keep their articles of incorporation, bylaws, and meeting minutes.
Can I get help with starting my Wisconsin corporation?
Yes, you can get help from attorneys, online legal services, and business formation companies to assist with starting your Wisconsin corporation.
How do I dissolve my Wisconsin corporation?
To dissolve a corporation, you will need to file Articles of Dissolution with the Wisconsin Secretary of State.

Also Read

How to Save Money While Forming Your Wisconsin Corporation

One of the first ways to save money is to do thorough research and educate yourself about the process of forming a corporation in Wisconsin. By familiarizing yourself with the legal requirements, forms, and procedures involved, you can avoid unnecessary fees or expenses that may arise from mistakes or oversights. There are many online resources and guides available that provide step-by-step instructions on how to form a corporation, which can help you save money on hiring expensive legal services.

Another cost-saving tip is to consider utilizing online incorporation services instead of hiring a traditional attorney. Online services are often more affordable and convenient, as they handle all the paperwork and filings for you at a fraction of the cost of hiring an attorney. These services are typically tailored to small businesses and startups, making them a great option for entrepreneurs looking to save money on formation costs.

Furthermore, when it comes to choosing a registered agent for your Wisconsin corporation, there are several options that can help you save money. Instead of hiring a professional registered agent service, you may consider acting as your own registered agent or appointing a trustworthy friend or family member to fulfill this role. This can help you avoid the monthly or annual fees associated with hiring a third-party registered agent, saving you money over time.

In addition, when it comes to selecting a business structure for your Wisconsin corporation, it is important to carefully evaluate your options and choose the one that best suits your needs and goals. While a C-corporation may offer certain advantages, such as limited liability protection and potential tax benefits, it also comes with higher formation and maintenance costs. Alternatively, forming an S-corporation or a limited liability company (LLC) may be a more cost-effective option for small businesses and startups looking to save money on formation expenses.

Lastly, once your Wisconsin corporation is up and running, it is important to manage your finances wisely to ensure long-term profitability and sustainability. By creating a budget, tracking expenses, and seeking out cost-saving opportunities, you can save money in the long run and increase your chances of success as a business owner.

In conclusion, saving money while forming your Wisconsin corporation is possible with careful planning, research, and cost-saving strategies. By educating yourself, utilizing online services, choosing a cost-effective business structure, and managing your finances responsibly, you can reduce formation costs and set your business up for success without breaking the bank. With these tips in mind, you can start your Wisconsin corporation with confidence and financial security.

Conclusion

Starting a corporation in Wisconsin involves several critical steps, from choosing a corporate name to fulfilling ongoing compliance requirements. Following the steps outlined in this guide and seeking professional advice when needed, you can successfully establish your Wisconsin corporation and enjoy the benefits of limited liability, potential tax savings, and a professional business image.

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