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What is Needed to Start a Business in Wisconsin?

More than 4 million new businesses start in the United States every year. Of these, some will thrive while others may not. You have experience, you have drive, and you have a great idea for a new company. But before you start a business in Wisconsin, you will want to know the steps that you need to take to ensure that your endeavor will be a success. There are some essential legal considerations that will impact your business now and in the future.

Choose a Legal Structure

There are several options when it comes to setting up the legal structure of your business. The choice you make may have both advantages and disadvantages, so it is often best to seek legal guidance before you choose.

  • Sole Proprietorship – Sole proprietorship may be one of the easiest types of businesses to form, but it does have some drawbacks. A sole proprietorship has only one owner. As the owner, you are responsible for the profits and losses. You may be held personally liable if the business fails. For example, if you use your home as collateral for a loan and you default, you could lose your house.
  • Partnership – A partnership is a company that you own with another person. Although not legally required, you should have a written partnership agreement in place to avoid problems or disputes later. A partnership must file a registration statement with the Wisconsin Department of Financial Institutions (DFI).
  • Limited Liability Company – A limited liability company, LLC, is a business structure that provides some protections to company owners. It has some characteristics of partnerships and sole proprietorships but limits the personal liability of the owners. Owners pay taxes directly on profits, so there is no opportunity for double taxation. You will want to create an operating agreement, although it is not a legal requirement to do so.
  • Corporation – A corporation is a group of owners that may include individuals and stockholders to form a single entity. To form a corporation in Wisconsin, you must submit articles of incorporation with the DFI and appoint a registered agent. There are various types of corporations, including S and C corporations.

Obtain Licenses and Permits

Businesses must obtain the proper licensing and permits required by local, state, and federal laws. The types of licenses that you need depend on your type of business. If you will be selling goods, you must register with the Wisconsin Department of Revenue (DOR). You are required to collect sales tax, and you must also register for employer withholding taxes. Businesses other than sole proprietorships must obtain an Employer Identification Number (EIN) through the Internal Revenue Service (IRS).

Your business may require regulatory licenses or permits for environmental issues, health and safety, construction, and other industries. You will need to meet the specific requirements to obtain the proper permit or license. Some professionals require licensing as well. You will also need to check with your local municipality to find out about any other permits you may need for your business.

Handle Finances, Taxes, and Insurance

You will need to open a business bank account for your company. You will need to file taxes as required on a regular basis to both the state and federal governments. As a business owner, you will want to obtain insurance that protects you from liability. Talk to a professional to learn the options and requirements you must have in place. An accountant is helpful in establishing and maintaining business records.

Starting a business does not have to be stressful. Get the guidance you need from our experienced legal team to assist you through the process. Call us today at (608) 784-8310 or contact us online to schedule a consultation.

Published January 15, 2024
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