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.

What is a Foreign LLC?

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.

Transacting Business in Wisconsin

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:

• a warehouse in the state
• a store in the state
• an office in the state, or
• a sales representative in the state.

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.

Certain Activities Are Exempt

Like most states, Wisconsin's LLC Act specifies certain activities that do not constitute transacting business in the state. The items listed include:

• defending or settling a lawsuit
• dealing with internal business affairs such as holding member or manager meetings
• having a bank account in the state
• having an office, agency, or persons in the state for handling your company's own securities
• selling through independent contractors
• soliciting or obtaining orders where the orders require acceptance outside the state before they become contracts
• creating or acquiring indebtedness, mortgages, or security interests in property
• securing or collecting debts
• owning, without more, property
• conducting an isolated transaction that is completed within thirty days and is not one in the course of similar, repeated transactions
• transacting business in interstate commerce; and
• in certain cases, the LLC having some interest, for example as an owner, of another entity transacting business in Wisconsin.

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.

Certificate of Registration

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:

• the name of your LLC as registered in the state where it was organized
• if necessary, the fictitious name under which your LLC will operate in Wisconsin (necessary if the original name or something very similar is already in use by another Wisconsin registered business or the original name does must comply with Wisconsin's LLC naming rules)
• the state where your LLC was organized
• the date your LLC was organized
• the name of your LLC's registered agent in Wisconsin
• the street address of your LLC's registered office in Wisconsin
• the street address of the office your LLC is required to maintain in the state where it was organized or, if no such office is required, of the LLC's principal office
• an indication of whether your LLC is member-managed or manager-managed
• an indication of whether your LLC has transacted business in Wisconsin without being registered and, if so, supplemental information about how many years it transacted business without registration (used to compute fees and penalties)
• a statement certifying you are applying on behalf of a foreign LLC, and
• an authorized signature including a date and an indication of whether the signer is a member, manager, or attorney-in-fact.

You may file on paper or online. The filing fee is $100.

What Happens if You Don't Register?

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.

Registering a Foreign Corporation

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.