If you own a business that was created in a state other than Wisconsin, you will need to qualify or register that business in Wisconsin if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Wisconsin) limited liability company (LLC) to do business in Wisconsin.
For Wisconsin purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Wisconsin. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Alabama is a foreign LLC in Mississippi.
According to Wisconsin’s LLC Act, you are required to register your foreign company with the state of Wisconsin if you are “transacting business” in Wisconsin. What does this mean? Well, like most states, Wisconsin’s LLC Act does not specifically define the phrase “transacting business” in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws.
Like most states, Wisconsin’s LLC Act specifies certain activities that do not constitute transacting business in the state. The items listed include:
For the full, legal description of each of the listed items, check Section 183.1002 of the Wisconsin Statutes or see the Wisconsin Department of Financial Institutions’ (WFDI) foreign entities webpage.
If your LLC’s only activity in Wisconsin is one or more of the listed items, you should not need to register with the state.
To register your business in Wisconsin, you must file a Foreign Limited Liability Company Application for Certificate of Registration with the Wisconsin Department of Financial Institutions. You can download a copy of the application form from the WFDI website.
To complete the form, you must provide more or less the same information that you need to create an LLC in your home state. More specifically, for a Wisconsin application for registration, you need to provide:
You may file on paper or online. The filing fee is $100.
If your LLC transacts business in Wisconsin without authority, it cannot bring a lawsuit in any of the state’s courts. In addition, your LLC will owe all fees due for each year it transacted business without registration plus penalties up to $5,000. However, not being registered does not invalidate your LLC’s contracts or prevent it from defending a lawsuit in the Wisconsin. Also, a member of the LLC is not liable for the LLC’s debts and obligations solely because the company transacted business in Wisconsin without a certificate of registration.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Wisconsin are similar. You will, however, have to use a different application form. See the Wisconsin Department of Financial Institutions website for forms, information, and filing instructions for registering a foreign corporation in Wisconsin.