How to Start an S Corp in Wisconsin 

(November 2024)

In This Article

Introduction

Imagine you’re sitting at your kitchen table, a cup of coffee in hand, thinking about starting your own business. You feel excited, but also a bit overwhelmed by the process ahead. You want your business to be successful, and you know that forming an S Corporation (S Corp) in Wisconsin can offer you benefits like limited liability and tax advantages.

In this journey, you take a deep breath and decide to break it down step by step. You picture yourself choosing a unique name for your business, filing the right paperwork, and figuring out the legal details. You know you need to create bylaws and get an Employer Identification Number (EIN), but it doesn’t feel too daunting. You remind yourself that starting an S Corp is a smart move, especially if you plan to grow and hire employees down the road.

By the end of this process, you can visualize yourself confidently managing your own business, enjoying the rewards of your hard work. 

1. Select a Business Name

Come up with a name for your business. In Wisconsin, the name has to be unique, meaning no one else in the state can be using the exact same name.

What to Do:

  • Go to the Wisconsin Department of Financial Institutions (DFI) website and use its Business Name Availability tool. You type in the name you want and see if it’s taken.
  • Make sure the name ends with “Incorporated,” “Corporation,” “Inc.,” or “Corp.” If you’re going with an LLC, you need something like “LLC” or “Limited Liability Company” instead.

2. Choose a Registered Agent

Now, it’s time to choose a registered agent. Think of a registered agent as your business’s official point of contact—someone who receives legal documents, government notices, and important filings on your behalf. This person or business ensures that you don’t miss any critical deadlines or paperwork that could impact your company’s operations.

In Wisconsin, your registered agent must have a physical address in the state. You have two main options:

  • First, you can act as your own registered agent if you live in Wisconsin and have a local address. It’s cost-effective but requires you to be available during standard business hours.
  • Alternatively, you can hire a registered agent service. These companies handle everything for you and typically charge between $50 and $150 per year, providing convenience and peace of mind.

3. Submit Your Articles of Incorporation in Wisconsin

It’s time to make your business official! To legally form your corporation (or LLC) in Wisconsin, you need to submit either Articles of Incorporation or Articles of Organization, depending on your business type.

What You Need:

  • The name of your business.
  • Your registered agent’s name and address.
  • The number of shares to authorize (for corporations).
  • Your personal details, including your name and address.

How to File:

  • You can file online through the Wisconsin Department of Financial Institutions (DFI) website or by mail. Online submissions cost $100, while mailing it in costs $130.

Once your filing is approved, you receive a Certificate of Incorporation or Organization. 

4. Create Bylaws (or Operating Agreement for LLCs)

When setting up a business, establish clear rules for how it can operate. For corporations, these rules are outlined in bylaws, while for LLCs, it’s called an Operating Agreement. Even if you’re the sole owner, Wisconsin requires corporations to have bylaws. These documents cover important aspects, such as how meetings are conducted, how decisions get made, and how profits are going to be shared. 

For LLCs, the Operating Agreement provides similar guidelines but offers more flexibility. Although you won’t need to submit these documents to the state, keep them on hand. These documents can be useful when applying for a loan or bringing in investors, ensuring smooth business operations down the road.

5. Obtain an Employer Identification Number (EIN)

Think of an Employer Identification Number (EIN) as your business’s version of a Social Security number. It’s essential for opening a business bank account, hiring employees, and handling tax-related matters. The best part? It won’t cost you a dime to get one!

Getting your EIN is quick and easy. Simply visit the IRS website and apply online—it only takes a few minutes to complete. Once you receive it, make sure to store the number in a safe place, as you frequently need it for various business activities. Having an EIN is an important step toward keeping your business finances organized and running smoothly.

6. Organize Your First Official Meeting

Once your paperwork is filed and you have your EIN, the next important step is to hold your first organizational meeting. Think of it as your business’s official kick-off, even if you’re the only person involved.

Here’s what typically happens during this meeting:

  • If you’ve set up a corporation, you adopt your bylaws.
  • You can officially issue shares of stock to yourself and any other owners (if applicable).
  • You can also document everything by taking meeting minutes, which simply capture the key decisions made.

This meeting is essential for keeping things professional and organized. It also serves as proof to the IRS, banks, or other institutions that your business is following proper procedures.

7. Apply for S Corporation Status with the IRS.

Okay, now that you’ve got your corporation formed, here’s the most important part: applying for S Corp status with the IRS.

How to Apply:

  • Fill out Form 2553, which is the official IRS form to elect S Corp status.
  • Provide your company’s EIN, name, and date of incorporation on the form.
  • Every shareholder needs to sign this form, agreeing to the S Corp election.

Ensure you submit this form within 75 days of forming your business, or you can also file it anytime during the year for it to take effect the following tax year.

Once the IRS approves your S Corp status, you get taxed differently—profits and losses pass through to your personal tax return instead of the business being taxed separately. This can save you some money, especially on self-employment taxes.

8. Register for Wisconsin State Taxes

After you get your S Corp status sorted with the IRS, you need to register with the Wisconsin Department of Revenue (DOR) for any state taxes.

Depending on what your business does, you may need to register for:

  • Sales tax (if you sell goods or services that are taxable).
  • Withholding tax (if you have employees).
  • Franchise tax (if required for your type of business).

You can register for these taxes online at the Wisconsin DOR website.

9. File Annual Reports

Wisconsin requires all corporations and LLCs to file an Annual Report with the Department of Financial Institutions (DFI). This is basically a way for the state to confirm that your company is active and that all your information is up to date.

How to File:

  • File your annual report online through the DFI website.
  • The fee is $25 for LLCs and $40 for corporations.

This report is due every year by the end of the anniversary quarter of your business formation. Missing this step could result in late fees or even your business being dissolved, so make sure you stay on top of it.

10. Stay Compliant with Federal and State Laws

After everything is set up, your job isn’t quite done. There are a few ongoing things you need to keep up with to stay in good standing as an S Corp.

Here are some key things to remember:

  • Pay Yourself a Reasonable Salary: As an owner of an S Corp, you must pay yourself a salary that makes sense for the work you do and withhold taxes just like any other employer.
  • File Federal and State Taxes: S Corps don’t pay income taxes at the business level, but you need to file Form 1120-S with the IRS and report your share of the income on your personal tax return.
  • Keep Good Records: Maintain your financial records, meeting minutes, and any important documents to avoid trouble if the IRS or Wisconsin DOR ever audits your business.

Recap

Starting an S corporation in Wisconsin can be a rewarding venture, but it requires a few important steps to ensure everything is done correctly. First, you need to choose a unique name for your business and make sure it complies with Wisconsin naming regulations. Next, file your Articles of Incorporation with the Wisconsin Department of Financial Institutions. After that, obtain your Employer Identification Number (EIN) from the IRS.

Once your corporation is established, hold an organizational meeting where you can adopt bylaws and issue stock. It’s also important to file Form 2553 with the IRS to elect S Corp status, which allows your business income to be passed through to your personal tax return, avoiding double taxation. Finally, make sure to keep up with Wisconsin’s ongoing compliance requirements, like filing annual reports. With these steps, you’re well on your way to successfully operating your S Corporation in Wisconsin. 

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