How to Form a Professional Corporation in Wisconsin (2024 Guide)

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
Last updated: 
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Forming a Professional Corporation in Wisconsin

If you would like to start and learn how to form a corporation in Wisconsin, there are a few things that you should do now. However, in a professional corporation, professionals must create a special organizational structure to establish a professional or service corporation. Among the appropriate professions to organize a professional corporation in Wisconsin are accountants, physicians, engineers, architects, and attorneys.

Forming a professional corporation in Wisconsin or any business organization needs a certain number of steps. In this article, Webinarcare Editorial Team is going to share those steps. Keep in mind that these are general procedures. Depending on local law, it may be modified. For instance, your professional corporation may be subject to city or county-based rules.

What is a Professional Corporation in Wisconsin?

A professional service corporation (PSC), often known as a professional corporation (abbreviated as PC), is a particular type of organization that is permitted by state law to allow owners of specifically licensed professions to practice in the Wisconsin. A professional corporation’s owner is answerable for their own negligence or wrongdoing but is not held personally liable for the actions of other owners. The abbreviation PC or P.C. is frequently used to denote professional corporations.

This structure allows professionals to enjoy some of the benefits and protections of a traditional corporation while maintaining their professional status and abiding by the regulations of their respective licensing boards.

LegalZoom is the recommended corporation formation if you are thinking of forming a professional corporation from scratch. However, you can always start an LLC in Wisconsin, if you changed your mind.

WEBINARCARE EDITORIAL TEAM

How to Form a Professional Corporation in Wisconsin

To form a Professional Corporation in Wisconsin for the professional service you provide, you must follow a few steps that include verifying if you are qualified for a PC, naming your business, hiring a Registered Agent, filing the Articles of Incorporation, outlining an operating agreement, requesting for an EIN, opening a bank account, getting a business license, and filing for an Annual report and taxes.

Step 1: Verify If You Are Qualified for a Professional Corporation

In forming a professional corporation in Wisconsin, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-

To provide your service, you must be qualified and have a license. In most cases, you can now form a professional corporation after finishing your studies, passing the exam, and receiving your license. If you work in an industry that does not provide a license or professional certification, you should consider starting an LLC or corporation.

Step 2: Name your Professional Corporation in Wisconsin

After you have decided to form a professional corporation in Wisconsin, you must choose a name for your corporation. Here are some pointers to consider when naming your professional corporation.

  • The business name should have the word PC, frequently followed by the name of the principal owner in place of Inc or LLC. (Example. John Doe, MD, PC)
  • Limit of restricted words that need a license.
  • A unique name is needed with no match
  • No confusion with a government entity name.

In Wisconsin, if you do not wish to file your professional corporation right away but want to hold the name that you have decided on, then you can reserve your corporation name for 120 days. You must file a name reservation application in the Wisconsin Secretary of State to keep the name.

If not already present, a professional corporation, professional association, service corporation, or professional service corporation must be included in the name. You may register your business under a different legal name if your preferred legal name is unavailable. Once you’ve decided on a name, you can apply for Wisconsin DBA (doing business as). This way, you can run a clinic or law firm under your name.

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Step 3: Choose the Wisconsin Registered Agent

The next step in forming a professional corporation is hiring a Registered Agent, who accepts legal paperwork for your business. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Wisconsin. Forming a professional corporation for your service will be easier if you have Registered Agent in Wisconsin.

Alternatively, you can serve as your own Registered Agent if you have the time. Usually, in Wisconsin, a Registered Agent costs is ranging from $50 – $150. To make it easier, you can hire Wisconsin Registered Agent Services for your professional corporation.

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Step 4: File the Articles of Incorporation in Wisconsin

After you hire a Registered Agent to form a professional corporation, the next step is to file the Wisconsin Articles of Incorporation. In writing the Articles of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information, should be written. Include the names of all co-owners as well. All owners must demonstrate that they have the necessary licenses to practice the profession in question.

Filing the Articles of Incorporation in Wisconsin may be done with two methods, online and by mail. The Articles of Incorporation fee may vary from different state. However, in Wisconsin, it costs $100 for online and by mail 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. . For offline filing, Send the form by mail to State of WI – Dept. of Financial Institutions, P.O. Box 93348, Milwaukee, WI 53293.

Step 5: Write an Operating Agreement in Wisconsin

An operating agreement in Wisconsin is a document that contains all of your company’s organizational details. It is optional to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. The operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

Step 6: Designate the PC Board of Directors in Wisconsin

The next step is to form the first board of directors for your PC in Wisconsin. All of the initial directors must provide the owner with their contact information. The owner must keep records and submit them by the Wisconsin Secretary of State. As a shareholder and owner, you must ensure that a provision for appointing a new director is included in the By-laws. In Wisconsin, you must have Three directors in forming your Professional Corporation.

Step 7: Write the Corporate Bylaws

Now that you are done forming the team of the board of directors, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

Creating comprehensive corporate bylaws requires specific knowledge about the company, its structure, and operations. However, I can provide you with a general outline of what corporate bylaws usually include. It is crucial to consult with Wisconsin Business Attorney or a legal expert to ensure that your bylaws comply with the laws and regulations governing your jurisdiction and industry.

  • Name and Purpose of the Corporation
  • Registered Office and Agent
  • Shareholders
  • Board of Directors
  • Officers
  • Committees
  • Indemnification and Insurance
  • Conflict of Interest
  • Records and Reports
  • Amendments
  • Miscellaneous

Step 8: Hold the First Board of Directors’ Meeting

Gather the board of directors for the first meeting after drafting the corporate bylaws. This meeting will conclude with the appointment of directors to manage the company’s daily operations, approval of the bylaws, selection of the corporation’s financial reporting year, and approval of the stock issue. Minutes should be taken at all board meetings and kept with the company’s records.

Step 9: Request an EIN in Wisconsin.

After the operating agreement’s documentation, you should get or request an Employer Identification Number (EIN) in Wisconsin. The tax ID for your professional corporation will be an EIN. The Internal Revenue Service can provide an EIN (IRS). It has nine digits and is comparable to a social security number. Nevertheless, EIN is different from SSN. Only business-related tasks, primarily filing general taxes, are performed using it. The form needs to be filled out and submitted online to the IRS.

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 the 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.

After you have your EIN number, you can benefit in several ways. It will give your professional corporation the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

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Step 10: Open a Bank Account and Prepare for Taxes.

You should open a business bank account as soon as you have applied for and received your Employer Identity Number because you will use this account for yourself, your clients, and your staff. Check out the Best Banks in Wisconsin for you to decide on which bank you are going to open an account.

Due to your organization’s increased legality and liquidity, having a US business bank account may make conducting business in Wisconsin easier. Most banks require an EIN for businesses other than sole proprietorships to open a business bank account. Also, keeping your accounts separate will prevent you from merging your personal and business finances. Also, filing taxes is simpler when you have an EIN. You can expect to pay employee and corporate taxes when you form a professional corporation.

Step 11: Get a Business License in Wisconsin

Before your professional corporation operates in Wisconsin, you must have Wisconsin Business License first. A business license is a formal document issued by a state government agency that allows you to conduct business in the geographic area governed by that agency. The cost of business licenses and permits in Wisconsin ranges from $50 – $300. You must check with the local authorities to see if any special licenses or permits are required.

Step 12: File Your Taxes in Wisconsin

Finally, you’ve arrived at the final process. Remember to file your taxes when you have obtained a business license and are ready to begin operations. To avoid a large tax bill, you should begin paying taxes quarterly as soon as possible. Each state has different tax requirements. Start examining the Wisconsin tax classification for the taxes that an LLC in Wisconsin must pay.

Main Characteristics of a Professional Corporation

In forming a Professional Corporation, the main characteristics must be distinguished before forming it. These are the general characteristics of forming a Professional Corporation in Wisconsin.

  • Limited Liability Protection: A professional corporation provides its owners, shareholders, or members limited liability protection like a regular corporation. This means the shareholders’ personal assets are generally protected from business debts, obligations, and lawsuits, except in malpractice or professional negligence cases.
  • Wisconsin Licensing Requirements: All shareholders must typically be licensed professionals in the same field in a professional corporation. The corporation must also comply with specific state regulations and licensing requirements that govern the profession.
  • Governance and Management: A professional corporation is governed by a board of directors, who the shareholders elect. The board appoints officers to manage the day-to-day operations of the corporation. All directors and officers must be licensed professionals in the same field as the corporation.
  • Taxation: Professional corporations are taxed as C corporations, where the corporation pays taxes on its income, and shareholders pay taxes on dividends received from the corporation. However, some professional corporations may be eligible for S corporation status, allowing pass-through taxation. Income, losses, deductions, and credits flow to the shareholders, who report this information on their income tax returns.
  • Restrictions on Ownership and Transfer of Shares: Professional corporations often restrict the ownership and transfer of shares to ensure that only licensed professionals in the same field can become shareholders. This helps maintain the professional nature of the corporation and adheres to state licensing requirements.
  • Malpractice Liability: While a professional corporation provides limited liability protection for general business debts and obligations, it does not shield shareholders from liability for their own malpractice or professional negligence. Shareholders can still be personally liable for their actions in providing professional services.

In summary, a professional corporation is a specialized corporate structure designed for licensed professionals, offering limited liability protection and a formal governance structure while adhering to state licensing requirements and regulations.

Maintain Professional and Business License in Wisconsin

You must maintain or renew your professional license regularly now that you have established your professional corporation. Even if your company is well-established, it is only meaningful if you have a valid operating license. And it makes no difference if your professional license is still valid for a year or two, but your business license has already expired.

Make time at least once a year to check the status of your licenses. You won’t miss anything important this way. You can address any issues that arise.

Filing Annual Report in Wisconsin

In Wisconsin, you must submit a report. The owners’ and Registered Agent’s names and contact details are listed in the Annual Report. Also, it should include all of your yearly financial activity. You must submit the report every 1 year in the Wisconsin Secretary of State.

FAQs

What is a professional corporation in Wisconsin?
A professional corporation (PC) is a type of business entity formed under Wisconsin law specifically for licensed professionals.
Who is eligible to form a professional corporation in Wisconsin?
In Wisconsin, licensed professionals, such as doctors, lawyers, accountants, and architects, are eligible to form professional corporations.
What is the process for forming a professional corporation in Wisconsin?
The process for forming a professional corporation in Wisconsin involves filing articles of incorporation with the Wisconsin Department of Financial Institutions.
Are there any special requirements for naming my professional corporation in Wisconsin?
Yes, in Wisconsin, the name of the professional corporation must include the words “professional corporation,” “professional association,” “limited,” or an abbreviation thereof.
Can a professional corporation in Wisconsin have only one shareholder?
Yes, a professional corporation in Wisconsin can have only one shareholder.
What is the liability protection of a professional corporation in Wisconsin?
A professional corporation in Wisconsin provides limited liability protection to its owners, protecting their personal assets from business debts and lawsuits.
Can I form a professional corporation in Wisconsin if I am licensed in another state?
Yes, as long as you are licensed to practice your profession in Wisconsin or you are licensed in another state that has similar laws regarding professional corporations.
What are the tax implications of forming a professional corporation in Wisconsin?
A professional corporation in Wisconsin is typically taxed as a C corporation or an S corporation, depending on how it chooses to be treated for tax purposes.
Do I need a lawyer to form a professional corporation in Wisconsin?
No, but it is recommended that you consult with a qualified attorney to ensure that all legal requirements are met when forming a professional corporation in Wisconsin.
Is there a minimum amount of startup capital required to form a professional corporation in Wisconsin?
No, there is no minimum amount of capital required to form a professional corporation in Wisconsin.
How long does it take to form a professional corporation in Wisconsin?
It typically takes 2-3 weeks to form a professional corporation in Wisconsin if all required documents are submitted correctly.
What is an authorized representative in Wisconsin?
An authorized representative in Wisconsin is an individual or entity that is authorized to act on behalf of a registered business in certain legal, tax, or other matters.
Is registration with the Wisconsin Department of Financial Institutions required for a professional corporation?
Yes, all professional corporations formed in Wisconsin must register with the Wisconsin Department of Financial Institutions.
How often do you need to renew your professional corporation in Wisconsin?
In Wisconsin, professional corporations are required to file an annual report with the Department of Financial Institutions each year to remain in good standing.
Can a professional corporation in Wisconsin provide services in multiple states?
Yes, but it must follow each state’s laws and regulations with regard to providing professional services.
What documents do I need to file to form a professional corporation in Wisconsin?
To form a professional corporation in Wisconsin, you will need to file articles of incorporation with the Department of Financial Institutions.
Do I need a physical office location to form a professional corporation in Wisconsin?
No, a professional corporation in Wisconsin can operate from a virtual or physical office location.
Can a professional corporation in Wisconsin be revoked or terminated?
Yes, a professional corporation in Wisconsin can forfeit its corporate status for failure to comply with state laws or regulations.
Can I convert my existing corporation into a professional corporation in Wisconsin?
Yes, an existing corporation may convert to a professional corporation in Wisconsin if it is eligible and follows the proper procedures.
Can members of different professions form a professional corporation in Wisconsin?
No, in Wisconsin, only professionals in the same licensed field can form a professional corporation together.
Can a professional corporation offer services that the professionals themselves are not licensed to provide?
No, a professional corporation in Wisconsin can only provide services that its shareholders are licensed to provide.
What is an annual report for a professional corporation in Wisconsin?
An annual report for a professional corporation in Wisconsin is a legal requirement that must be filed each year with the state to maintain good standing.
How can I obtain a Certificate of Good Standing for my professional corporation in Wisconsin?
The Wisconsin Department of Financial Institutions can provide a Certificate of Good Standing for your professional corporation upon request.
Are there any restrictions on how many different licensed professions can be in a professional corporation in Wisconsin?
Yes, in Wisconsin, a professional corporation can only include professionals licensed in one specific field or profession.
Can a non-professional own stock in a professional corporation in Wisconsin?
Yes, but regulations restrict the proportion of ownership held by non-professionals.
Are there any restrictions on how much net income owners can take from the corporation in Wisconsin?
No, owners of a professional corporation in Wisconsin can take as much net income as agreed upon or permitted by law.
What is the effective date in Wisconsin for a professional corporation?
The effective date of a professional corporation in Wisconsin is the date on which the Wisconsin Department of Financial Institutions approves the articles of incorporation.
Can a professional corporation in Wisconsin own and rent out property?
Yes, as long as the real estate that is owned and/or leased by the corporation is used for professional purposes.
Who can form a professional corporation in Wisconsin?
Only licensed professionals such as accountants, lawyers, architects, dentists and doctors can form a professional corporation in Wisconsin.
What are the benefits of forming a professional corporation in Wisconsin?
One of the primary benefits of forming a professional corporation in Wisconsin is that it can limit an individual’s personal liability for the corporation’s debts and liabilities.
What is required to form a professional corporation in Wisconsin?
To form a professional corporation in Wisconsin, you need to file Articles of Incorporation with the Wisconsin Secretary of State and obtain any necessary licenses or permits from relevant state boards.
How much does it cost to form a professional corporation in Wisconsin?
The fee for filing Articles of Incorporation to form a professional corporation in Wisconsin is $115.
Is a professional corporation taxed differently than a regular corporation in Wisconsin?
No, both types of corporations are generally taxed the same way in Wisconsin.
Are there any restrictions in Wisconsin on who can own a professional corporation?
Yes, in Wisconsin, only licensed professionals who are authorized to practice their profession can own shares in a professional corporation.
Once formed, are there any ongoing filing requirements for a professional corporation in Wisconsin?
Yes, each year professional corporations in Wisconsin must file an annual report and pay an annual fee.
Can a professional corporation in Wisconsin have more than one shareholder?
Yes, professional corporations in Wisconsin can have multiple shareholders as long as they are licensed professionals.
Can a professional corporation in Wisconsin be a nonprofit entity?
No, professional corporations in Wisconsin cannot be nonprofit entities.
Is there any liability protection for professionals who form a professional corporation in Wisconsin?
Yes, the personal assets of shareholders of a professional corporation in Wisconsin typically cannot not be seized by creditors to satisfy business debts and liabilities.
Can solicitors and professional fundraisers form a Professional Corporation in Wisconsin?
No, solicitors and professional fundraisers cannot form a Professional Corporation in Wisconsin.
Who is authorized to regulate a professional corporation in Wisconsin?
In Wisconsin, professional corporations are generally regulated by the relevant boards which issue their license or certification.
Can a professional corporation in Wisconsin have non-licensed individuals working as employees?
Yes, a professional corporation in Wisconsin can have non-licensed individuals as employees, as long as the majority share of the corporation is owned by individuals who are licensed.
Can a professional corporation in Wisconsin have a foreign owner?
Yes, a foreign owner may own shares of a professional corporation in Wisconsin as long as they meet specified license requirements.
How many shares can a professional corporation in Wisconsin issue?
The number of shares a professional corporation in Wisconsin can issue is typically outlined in its Articles of Incorporation.
What is an operating agreement and do I need one for my Wisconsin professional corporation?
An operating agreement is a legal document outlining the rules of operation for a company. While not required by Wisconsin, it’s suggested that you have one for distribution of profit allocation and responsibilities.
Are shareholders in a Wisconsin professional corporation protected from law malpractice claims?
No, shareholders still face risks in terms of complaints related to malpractice or negligence despite the liability protections offered by a corporation.
Will the Wisconsin Secretary of State reject an application for a professional corporation that will not be used in a professional field?
Yes, an individual may not form a professional corporation simply for the purpose of transferring ownership of a skill without a licensure.
Can all therapists form a professional corporation in Wisconsin?
No, in Wisconsin, only certain licensed professionals like therapists can own shares in a corporation.
Is there an information formality kit required to be kept up-to-date for my professional corporation in Wisconsin?
It’s not required to maintain an information formality kit for your professional corporation, but it’s recommended to keep the company’s legally important documents in one up-to-date location.
Is an attorney needed to file the Articles of Incorporation for a Wisconsin professional corporation?
No, you can file Articles of Incorporation for your Wisconsin professional corporation yourself.
Are there any exceptions to the professional corporation limitation liability posed for directors or officers?
No, all professional corporations shareholders may only be held liable for their individual performance, not for the illegalities/ mismanagement from director or officers.
Does Wisconsin Provide Seem-Alike liability protections for professional corporations?
Wisconsin has statutes that increase possible legal errors liability protections for certain qualification-sensitive professions, like accountants and lawyers.
Is it beneficial to open a professional corporation cash credit account at a bank?
It is bound-to-not assist professional corporations in the way that opening a separate account for operating examinations responsibly does to obey reporting requirements.
What is the minimum number of investors needed to join to form a Wisconsin professional Corporation?
You need at least one investor to form a Wisconsin professional corporation.
Is there a limit to the number of shareholders in a Wisconsin professional corporation?
There is no limit to the number of shareholders that a Wisconsin professional corporation may have, but they must be qualified to profit from the services provided.

Also Read

How to Save Money While Forming Wisconsin Professional Corporation

Firstly, conducting thorough market research before starting your professional corporation can help you identify cost-saving opportunities. By understanding the current market forces and industry trends in Wisconsin, you can optimize your business plan to minimize unnecessary expenses. Analyzing the demand and supply conditions specific to your profession will enable you to allocate resources efficiently and avoid overspending on areas that offer limited returns.

Another key aspect to consider is legal assistance. While legal advice is essential during the incorporation process, the costs associated with hiring an attorney can vary significantly. To save money, explore alternative options such as incorporating your business online using reputable platforms. Several online services offer affordable packages that include professional consultations and the necessary documentation to form your professional corporation. Opting for one of these solutions can potentially lead to substantial savings while ensuring your legal requirements are met.

Furthermore, making smart decisions regarding office space and overhead costs can significantly impact your budget. Renting or buying real estate can be a substantial financial burden. Instead, consider shared office spaces or co-working facilities, which provide professional environments and essential amenities at a fraction of the cost. Additionally, as technology continues to advance, an increasing number of professionals now work remotely. Embracing the trend of remote work may allow you to forgo physical office space altogether, providing further savings on rent, utilities, and maintenance expenses.

A crucial aspect often overlooked is engaging with accounting professionals who understand your industry and are familiar with the complexities of forming a professional corporation. Although hiring an accountant may seem like an additional expense, their expertise can prove highly valuable. Accountants can help identify tax deductions and incentives that are specific to your profession, ensuring compliance while maximizing your tax savings. It is imperative to collaborate with an accountant right from the start to avoid costly mistakes in financial management, ensuring that you are starting off on the right foot financially.

Finally, embracing the power of technology can lead to substantial savings, especially regarding marketing and advertising costs. Building an online presence through social media platforms, search engine optimization, and online advertising can help you reach a wider audience without burning a hole in your pocket. By targeting your marketing efforts effectively, you can generate leads and attract clients while keeping your marketing expenses low.

To sum up, establishing a Wisconsin professional corporation does not have to be a drain on your finances. By conducting thorough market research, exploring online incorporation services, making conscious decisions about office space, engaging with an accountant specializing in professional corporations, and leveraging the power of technology, you can significantly reduce your expenses. These cost-saving strategies allow you to allocate your resources more effectively, providing a strong foundation for your business’s success.

Note: This editorial comment will be integrated into an existing article on the topic “How to Save Money While Forming Wisconsin Professional Corporation” before the existing conclusion.

Conclusion

In conclusion, forming a professional corporation in Wisconsin is a strategic decision for licensed professionals who seek to combine their expertise and services under a single corporate entity. This business structure offers limited liability protection, a formal governance structure, and compliance with state licensing requirements. However, it also comes with certain restrictions on ownership, transfer of shares, and personal liability for professional malpractice. By carefully considering the advantages and disadvantages of a professional corporation, professionals can determine whether this structure aligns with their business goals, regulatory requirements, and risk management needs, ultimately contributing to a more organized, secure, and compliant professional practice.

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