How to Start a Business in Wisconsin (Updated 2024)

If you'd like to start a business in Wisconsin, you need to learn about the state and local laws surrounding businesses. Start by forming an idea for your business and creating a plan. Then make your business legal by filing paperwork with the state, applying for the appropriate licenses and permits, and registering for taxes.

Follow the steps outlined below to start your Wisconsin business.

1. Choose a Business Idea

Take time to explore and research ideas for your business. At this stage, you should consider your own interests, skills, resources, availability, and reasons why you want to form a business. You should also think about the likelihood of success based on the interests of your community, and whether your business idea will meet an unmet need. (For tips on where to start, read our FAQ on evaluating your business idea.)

After you select an idea, consider drafting a business plan to evaluate your idea's profitability. When you create a plan, you'll have a better idea of:

• the startup costs
• your competition, and
• strategies for making money.

Investors and lenders might ask to review your business plan before providing financial assistance. As you create your plan, consider your funding options. Be prepared to apply for a business loan, pitch to investors, or reach out to family members. Check out our section on business financing, loans, and capital for ideas and guidance on financing your small business.

2. Decide on a Business Legal Structure

After you have your idea, you'll need to choose the right type of business to implement it. There are various kinds of business structures, each with advantages and disadvantages. You'll want to consider which ownership structure offers the type of liability protection you want and the best tax, financing, and financial benefits for you and your business. Once you know what kind of business you want to start, you'll have a better idea of which business entity best fits your needs.

The most common legal structures for a small business are:

• sole proprietorships
• partnerships
• limited liability companies (LLCs), and
• corporations.

In short, sole proprietorships and general partnerships are inexpensive and relatively easy to form. But they offer no liability protections to owners. LLCs and corporations are more expensive and come with more legal requirements but they give limited liability protection to owners.

In Wisconsin, you can also form a limited partnership, limited liability partnership (LLP), or limited liability limited partnership (LLLP), which are types of partnerships where some partners have limited liability.

Alternatively, if you provide a professional service, you have the option of forming a service corporation (called a "professional corporation" or "professional service corporation" in other states) in Wisconsin. In general, a "professional service" is a service that requires a license, registration, or certification.

Depending on which business structure you choose, you might be able to elect to become an S corporation, a tax entity. Different types of businesses, such as LLCs and corporations, can elect to be taxed as S corporations but legally remain corporations or LLCs. If you have specific questions, you should speak with a tax attorney or other tax professional.

3. Choose a Name for Your Wisconsin Business

Next, your business needs a name. Picking a business name is a fun step but it's also an important one. The name you choose will appear on your signs, advertisements, merchandise, listings, and in other places.

Pick a name that uniquely identifies your business. In Wisconsin, your business name is legally required to be distinct from the names of other businesses already on file with the Wisconsin Department of Financial Institutions (DFI). Find available names by using the DFI corporate records search.

Entity name designators: Wisconsin has certain naming requirements for LLCs and corporations (and other business types). For example, you must include certain words or abbreviations to identify your business's structure (such as using "LLC" for LLCs or "incorporated" for corporations). See our article on how to form an LLC in Wisconsin for more on the state's LLC naming requirements.

Reserving your business name: You can reserve an available name for 120 days by submitting a Name Reservation Application to the DFI. As of 2024, the fee to reserve a name is $15 for corporations, LLCs, and LLPs and $10 for LPs, LLLPs, and nonstock (nonprofit) corporations.

Recording your business name: Is your business a sole proprietorship or general partnership that uses a business name different from the real name of the business owner (for a sole proprietorship) or the individual partners (for a partnership)? If so, you must record your business name with the register of deeds of the county where your business is located. You must include a verified statement disclosing all owners' names. Check with your county's register of deeds office for the appropriate form to file. (Wis. Stat. § 134.17 (2024).)

If you plan to do business online, you might want to register your business name as a domain name. In addition, to avoid trademark infringement issues, you should complete a federal and state trademark search to make sure the name you want to use isn't the same as or too similar to a name already in use.

4. Create Your Business Entity With the Wisconsin Department of Financial Institutions

Now that you have your name and business structure figured out, it's time to register your business with the DFI (unless you've chosen to be a sole proprietorship or general partnership). If you want to form a corporation or LLC, you can create your business online through the Wisconsin OneStop Business Registration Portal. For every other business type or to register your business by mail, send a paper copy of the registration form to the DFI. You can find a list of business entity forms on the DFI website.

Here's how to form each type of business in Wisconsin:

• Sole proprietorship: You don't need to file any organizational documents with the state to start a sole proprietorship in Wisconsin.
• General partnership: As with a sole proprietorship, you don't need to file any paperwork to create a general partnership in Wisconsin. Although not legally required, all partnerships should have a written partnership agreement to lay out the rules for how the partnership will be managed and how the profits will be divided.
• Limited partnership: You must file a Certificate of Limited Partnership (Form 302) with the DFI.
• Limited liability partnership (LLP): A domestic partnership can become an LLP (often used by professionals) by filing a Statement of Qualification (Form 602) with the DFI. The partnership must first approve the conversion by the same vote or consent needed to amend the partnership agreement. (Wis. Stat. § 178.0901 (2024).)
• Limited liability limited partnership (LLLP): You can form an LLLP by filing a Certificate of Limited Partnership with the DFI. You must state in your certificate that the partnership is an LLLP.
• LLC: To create a Wisconsin LLC, you must file Articles of Organization (Form 502) with the DFI. You can file these articles online or by mail. You should also prepare an operating agreement to establish the basic rules for your LLC's operations.
• Corporation: You must file Articles of Incorporation (Form 2) with the DFI to create a corporation in Wisconsin. You can file these articles online or by mail. You must also prepare and adopt bylaws for your corporation. Corporate bylaws, similar to an LLC's operating agreement, set out your corporation's internal operating rules. You don't need to file your bylaws with the state.
• Service corporation: Any person licensed, certified, or registered to practice a personal or professional service can create a service corporation by filing Articles of Incorporation with the DFI. All incorporators and owners must be licensed, certified, or registered under the same profession or occupation.

Most of these business structures require you to appoint a registered agent in Wisconsin for service of process. A registered agent can be a Wisconsin resident or a domestic or foreign (out-of-state) business registered or authorized to do business in the state. An agent agrees to accept legal papers on the company's behalf.

After you form your corporation or other applicable business with the SOS, you can file IRS Form 2553, Election by a Small Business Corporation, with the IRS to elect S corporation tax status.

5. Apply for Wisconsin Licenses and Permits

In most cases, you'll need to apply for at least one license, permit, or registration for your business.

Tax registration. If you're going to be selling taxable goods or services in Wisconsin, you must register with the Department of Revenue (DOR) to collect sales tax and get a seller's permit. If your businesses will have employees, you must register with the DOR for employer withholding taxes. You can register for both types of tax—and other business taxes—online via the state's One Stop Business Portal or the DOR's Online Registration site (depending on your business type). You can also register on paper using Form BTR-101, Application for Wisconsin Business Tax Registration.

Employer identification number (EIN). If your business has employees or is taxed separately from you, you must obtain an EIN from the IRS. Even if you're not required to get an EIN, there are often business reasons for doing so. For instance, banks often require an EIN to open an account in the business's name and other companies you do business with could require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There's no filing fee.

Regulatory licenses and permits. You might need to apply for permits or licenses related to health and safety, the environment, building and construction, and specific industries or services. Different departments and agencies oversee various regulatory licensing. The Department of Natural Resources and the Department of Health Services handle some of the state's important regulatory licenses and permits. For information about local licenses and permits, check the websites for any cities or counties where you'll do business.

Professional and occupational licenses. The Department of Safety and Professional Services (DSPS) has information about a full range of the state's licensed professions and occupations.

6. Pick a Business Location and Check Zoning

The next step is selecting a location for your business and checking local zoning regulations. Keep these considerations in mind when choosing your business location:

• Your business location needs to be affordable. Calculate the costs of running your business in the desired spot, including mortgage or rent and utilities. Look back at your business plan to see whether you can afford your desired location, especially during your company's early months. If you lease a commercial space, make sure you negotiate terms that'll work for your business in the long term.
• Your location needs to be suited to your business needs. Pick a place that has the space and functionality to run your business. For example, if you need a lot of storage, make sure you have the space to house it. And, if your business depends on foot traffic, choose a spot that's central and walkable.
• You need to verify that your location is properly zoned for your type of business. You might find zoning regulations for your town or city by reviewing your local ordinances and contacting your town's zoning or planning department.

Do you need a physical location for your business? In general, you should have some sort of mailing or office address for your business. Oftentimes, an address is legally required. This address can usually be your home address, a P.O. box, or a coworking space, among other options. Read our article on whether you need a physical address for your small business to learn more.

Can you run your business out of your home? One alternative to opening your business at a new location is running your company out of your home. If you decide to run a home-based business, check your local zoning laws. Residential zoning laws are often stricter than commercial zoning laws. You should also review your lease (if you rent your home) and homeowners association rules (if applicable), either of which might ban some or all home businesses.

7. Register and Report Business Taxes

Wisconsin taxes every kind of business. You can find many of the tax forms you need on the forms webpage of the DOR website. Most businesses can register to file and pay their taxes online through either the DOR's My Tax Account or the One Stop Business Portal.

Sole proprietorships. Sole proprietors pay business income as part of their personal income tax returns.

Partnerships. Partners pay state taxes on partnership income on personal tax returns. In addition, most Wisconsin partnerships also must file Form 3, Wisconsin Partnership Return.

LLCs. By default, LLCs are considered "pass-through tax entities," meaning members pay state taxes on their share of LLC income on their personal tax returns. However, in Wisconsin, you can elect to have your LLC taxed at the entity level by checking Box I on the LLC's partnership return. Alternatively, a Wisconsin LLC can elect to be taxed as a corporation by filing Form 8832, Entity Classification Election with the IRS. Wisconsin LLCs must also file an annual report with the DFI. For more, read our article on LLC annual report and tax filing requirements in Wisconsin.

Corporations. Shareholders must pay state taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay state income tax on their personal state tax return. Wisconsin corporations must pay either the state's corporation income or franchise tax using the corporation franchise or income tax return. Corporations with annual gross receipts of more than $4 million must also pay an economic development surcharge. Finally, corporations, like LLCs, must file an annual report with the DFI.

And, apart from Wisconsin taxes, there are always federal income and employer taxes. Check IRS Publications 334, Tax Guide for Small Business, and 583, Taxpayers Starting a Business.

8. Obtain Insurance for Your Wisconsin Business

Regardless of your industry or type of business, you should look into getting insurance coverage for your business. Business insurance can protect your business and your personal assets from unexpected events, such as personal injury lawsuits and natural catastrophes.

An insurance agent can help you explore the different coverage options for your business. You should consider getting general liability insurance to protect your business against claims related to bodily injury or property damage. Your business might also benefit from cyber liability insurance to cover litigation and settlement fees following a data security breach.

For further guidance, see our article on what types of insurance your small business needs.

9. Open a Business Bank Account

No matter the type of business you form, you should consider opening a separate business account to make it easier to track your income and expenses. For some business types, including LLCs and corporations, a separate bank account is necessary to maintain your liability protection.

Additional Help With Starting Your Wisconsin Business

When creating your Wisconsin business, a great place to start is Wisconsin's One Stop Business Portal. Check out the Open My Business section under "Resources" for in-depth guidance and information on business registration, business taxes, and unemployment insurance. On the One Stop website, you can also find links to resources like:

• the Wisconsin Small Business Development Center
• the Office of Business Development
• the Business Development and Government Relations Unit, and
• the WI Supplier-Diversity Program.

In addition, the DFI has a helpful business entity FAQ webpage that can help you with the business startup process.