How to Launch a Business in Wisconsin

Starting a business in Wisconsin can seem overwhelming, but breaking it down into manageable steps makes it more accessible. You need to know the key steps to get your business in 2024. From registering your business name to setting up tax accounts, here’s what you need to do.

What is the process to start a business in Wisconsin?

For many mid-career professionals transitioning to entrepreneurship, starting a business can feel like navigating a maze of legal requirements and paperwork. Understanding the key steps upfront can save you headaches and keep you focused on your business goals.

First, you need to choose a business idea and create a plan. This helps you understand your market, competition, and potential profitability. Once you have a solid plan, you can move on to the formal steps of starting your business. Check out these steps to start a small business for a detailed guide.

Choosing a business name is crucial. Conduct a business entity search on the Wisconsin Department of Financial Institutions website to ensure your desired name is available. If you’re forming an LLC or corporation, your name gets registered when you file the formation documents with the state. You must file a DBA (Doing Business As) with the county for sole proprietorships and general partnerships operating under a fictitious name.

Next, you need to obtain the necessary licenses and permits. Most businesses require a state business tax registration to get a seller’s permit or use a tax certificate from the Department of Revenue. Depending on your industry, you might need professional licenses, such as those for contractors or health care providers. Additionally, local permits may be required, like health permits for restaurants or zoning permits for physical business locations. Some industries, like agriculture or aviation, also require federal licenses.

Finally, set up your tax accounts and obtain an Employer Identification Number (EIN). EINs are issued by the IRS and are necessary if your business has employees taxed as a partnership or corporation or meets other criteria. You can apply for an EIN for free directly through the IRS website. Wisconsin does not issue separate state tax ID numbers, so your EIN will be your primary tax identification number. Simplify your business operations with Homebase’s all-in-one platform.

What are the main types of business structures in Wisconsin?

Deciding on a business structure is critical to your liability, taxes, and day-to-day operations. Knowing the pros and cons of each can help you make an informed decision that aligns with your goals and risk tolerance.

Sole Proprietorship

A sole proprietorship is the simplest business structure. A single individual owns it and doesn’t require any formal state filing. This structure offers complete control to the owner but also means personal liability for any business debts or legal actions.

Partnership

A partnership involves two or more people sharing ownership. There are two main types of partnerships in Wisconsin:

General Partnership: This type doesn’t require formal state filing. Partners share profits, losses, and management responsibilities. However, each partner is personally liable for business debts and obligations.

Limited Partnership: This type requires state registration. It includes general partners who manage the business and are personally liable and limited partners who invest but don’t participate in management and have limited liability.

Limited Liability Company (LLC)

An LLC combines aspects of partnerships and corporations. It provides liability protection to its owners, known as members, shielding them from personal responsibility for business debts. To form an LLC in Wisconsin, you must file Articles of Organization with the state. This structure offers flexibility in management and tax options, making it a popular choice for many small businesses. For more insights, check out these tips for aspiring entrepreneurs.

Corporation

A corporation is a separate legal entity owned by shareholders. It offers the most robust protection against personal liability but has more regulations and requirements.

C-Corporation: This type is taxed separately from its owners. Profits are taxed at the corporate level and again as shareholder dividends, known as double taxation.

S-Corporation: This type allows profits to pass to shareholders’ tax returns, avoiding double taxation. However, it has restrictions on the number and type of shareholders.

To form a corporation in Wisconsin, you must file Articles of Incorporation with the state. Learn more about buying a franchise if you are considering this business structure.

Nonprofit Corporation

A nonprofit corporation is formed to further a charitable, educational, or similar purpose. It doesn’t distribute profits to owners or shareholders. Instead, any income is reinvested in the organization’s mission.

To form a nonprofit corporation in Wisconsin, you must file nonprofit Articles of Incorporation. Additionally, you may need to apply for federal and state tax exemptions to avoid paying income tax on money earned related to your nonprofit’s purpose.

How do you register a business name in Wisconsin?

Choosing and registering a business name is an exciting step, but it can also be nerve-wracking. You want to ensure your name is unique and protected to avoid future legal issues.

First, visit the Wisconsin Department of Financial Institutions (DFI) website. Use their business entity search tool to see if your desired business name is available. This step prevents you from choosing a name already used by another state business.

If you’re forming an LLC or a corporation, your business name gets registered when you file the formation documents with the state. For an LLC, you will file the Articles of Organization. For a corporation, you will file the Articles of Incorporation. These documents officially establish your business entity and secure your business name.

For sole proprietorships and general partnerships using a name different from the owner’s legal name, you must file a DBA (Doing Business As) with the county where your business operates. This filing allows you to operate legally under a fictitious name, ensuring transparency and legal compliance.

To further protect your business name, consider applying for a trademark. A trademark safeguards your name from being used by others in the same industry nationwide. You can apply for a trademark through the United States Patent and Trademark Office (USPTO). This step provides additional legal protection and helps establish your brand identity. For more financial advice for new business owners, check out this guide.

What business licenses and permits are required in Wisconsin?

Navigating the maze of licenses and permits can be daunting, but ensuring your business operates legally is crucial. Missing a permit can result in fines or even business closure.

Most businesses in Wisconsin need to register for a state business tax. This registration is necessary to obtain a seller’s permit or use tax certificate from the Department of Revenue. A seller’s permit allows you to collect sales tax from customers, while a use tax certificate is for businesses that purchase goods for use in Wisconsin but do not pay sales tax at the time of purchase. You can complete this registration online through the Department of Revenue’s website.

Certain professions require specific state licenses to operate legally in Wisconsin. You must obtain the appropriate professional license if you work in a regulated profession, such as contracting, cosmetology, or health care. Each profession has its licensing board and requirements, including education, exams, and continuing education. Check with the relevant state board to understand the specific requirements for your profession.

Local governments in Wisconsin may require additional permits for businesses operating within their jurisdictions. For example, if you plan to open a restaurant, you will need a health permit from the local health department. If your business involves a physical location, you might need a zoning permit to ensure your business complies with local zoning laws. Contact your city or county government to determine which local licenses are necessary for your business.

Some industries require federal licenses to operate. If your business involves activities regulated at the federal level, such as agriculture, aviation, or firearms, you must obtain the necessary federal licenses. The specific requirements and application processes vary by industry. For example, businesses involved in agriculture may need permits from the U.S. Department of Agriculture, while those in aviation must comply with Federal Aviation Administration regulations. Check with the appropriate federal agency to understand the licensing requirements for your industry. Simplify your licensing process with Homebase’s employee scheduling tools.

How do you get an Employer Identification Number (EIN) in Wisconsin?

Getting an EIN is a critical step for your business, especially if you plan to hire employees or need to open a business bank account.

The IRS uses EINs to track business tax filings and payments. This number is necessary for various tax-related activities, including filing returns, paying taxes, and opening a business bank account.

You must obtain an EIN if your business falls into any of the following categories:

• You have employees.
• Your business is taxed as a partnership or corporation.
• You operate as a multi-member LLC.
• You file employment, excise, or alcohol, tobacco, and firearms tax returns.
• You withhold taxes on income, other than wages, paid to a non-resident alien.

Applying for an EIN is straightforward and free. Visit the IRS website and complete the online application. The process involves answering questions about your business, such as its structure, the nature of its activities, and the responsible party’s information. Once completed, you will receive your EIN immediately.

In Wisconsin, your EIN serves as your primary tax identification number. The state does not issue separate tax ID numbers so you will use your EIN for all federal and state tax filings and registrations. This simplifies the process, as you only need to manage one tax ID number for your business activities. If you plan to start a retail business, understanding EIN requirements is crucial.

What are the main steps to hiring employees in Wisconsin?

Hiring your first employees is a major milestone, but it comes with challenges and responsibilities. Ensuring compliance with state and federal regulations is crucial to avoid legal issues.

First, you need a federal Employer Identification Number (EIN). This number identifies your business for tax purposes. If you don’t already have an EIN, apply for one through the IRS website. The process is quick and free, and you’ll receive your EIN immediately upon completing the online application.

Next, register for a Wisconsin withholding tax number. This number is necessary for withholding state income taxes from your employee’s wages. You can register online through the Wisconsin Department of Revenue’s website. This step ensures you comply with state tax withholding requirements and adequately manage payroll taxes.

After hiring a new employee, you must report them to the Wisconsin New Hire Reporting Center within 20 days. This reporting helps the state enforce child support orders and detect unemployment insurance fraud. You can submit new hire reports online, by mail, or by fax. Include the employee’s name, address, social security number, and the hire date.

Workers’ compensation insurance is mandatory for most employers in Wisconsin. This insurance provides benefits to employees who suffer work-related injuries or illnesses. Contact an insurance provider to obtain coverage. Ensure your policy meets state requirements and covers all your employees. This step protects your business and your employees in case of workplace accidents.

Finally, comply with labor law requirements by posting required notices in your workplace. These notices inform employees of their rights under state and federal labor laws. Commonly required posters include minimum wage, workers’ compensation, and anti-discrimination laws. You can obtain these posters from the Wisconsin Department of Workforce Development and the U.S. Department of Labor. Additionally, ensure you follow other labor law requirements, such as maintaining accurate payroll records and providing meal and rest breaks as state law mandates. For more details, check out this guide on hiring your first employee.

What are the ongoing compliance requirements for Wisconsin businesses?

Once your business is up and running, staying compliant with state and federal regulations is an ongoing responsibility. This ensures you avoid fines and keep your business in good standing. Streamline your business operations with Homebase’s HR & Compliance tools.

LLCs, corporations, and other registered entities in Wisconsin must file an annual report with the Department of Financial Institutions (DFI). This report updates the state of your business’s current status, including any changes in address, management, or ownership. The filing fee varies depending on your business structure. Ensure you submit this report on time to avoid penalties and keep your business in good standing.

Businesses in Wisconsin must handle both state and federal tax obligations. You must submit quarterly and/or annual tax filings and payments to the Wisconsin Department of Revenue and the IRS. This includes income, sales, and other applicable taxes based on your business activities. Keeping accurate financial records throughout the year simplifies this process and helps you meet all tax deadlines.

Renewing your business licenses and permits is a key part of staying compliant. Depending on your industry and location, you should renew local, state, and federal licenses and permits regularly. For example, health permits for restaurants or professional licenses for certain trades must be kept current. Check your business’s renewal dates and requirements for each license or permit to ensure uninterrupted operations.

As an employer in Wisconsin, you have several ongoing obligations. Maintain workers’ compensation insurance coverage to protect your employees in case of work-related injuries. Report new hires to the Wisconsin New Hire Reporting Center within 20 days. This helps the state track employment and enforce child support orders. Additionally, you must file payroll taxes regularly, including withholding state and federal income taxes from employee wages. Keep up with these responsibilities to avoid legal issues and ensure a smooth operation. For more insights, refer to this workforce management guide. Foster an employee-first culture to maintain a positive work environment and ensure compliance.

By following these steps and utilizing the right tools, you can successfully launch and manage your business in Wisconsin. Homebase offers a comprehensive suite of tools to help you streamline operations, manage your team, and stay compliant, making it easier to focus on what truly matters—delivering excellent service and creating unique customer experiences.

TL;DR

• What: Steps to start a business in Wisconsin.
• So What: Simplifies the transition to entrepreneurship.
• Pros & Cons: Pros: Clear steps, Cons: Time-consuming.
• Bottom Line: Manageable steps ease the process.

Let’s make work easier for you. Start with Homebase today to simplify employee management and streamline business operations. Sign up now at Homebase.