Wisconsin LLC Operating Agreement

If you plan to open a limited liability company in Wisconsin, in addition to Articles of Organization, we recommend signing an LLC operating agreement. Unlike Articles, this document is not required by state law, but it is in your best interest to arrange it.

An LLC operating agreement is an agreement between all members of a company (or just yours if you are a sole proprietor) aimed at documenting many aspects of the organization:

  • duties and responsibilities of members
  • degree of ownership, share in the company
  • management principles
  • statement of taxes
  • and whatever you see fit to indicate.

Documenting this information and the signatures of all members of the organization are very important to avoid misunderstandings. All aspects are reflected in this agreement.

The Wisconsin LLC operating agreement does not require certification from a notary public agent. A written agreement by all members of the organization is sufficient.

If you open a company alone, you should also create an LLC operating agreement to distinguish its assets from your personal assets—your house, car, or any other property. This is one of the most important uses of this agreement.

There is no single certified LLC operating agreement, but it usually includes the following parts:

  • Basic details. Needless to say, you need to state the name of the company, the date of foundation, the address, and the names of the company’s owners. Also, state the company’s purpose and operation field.
  • Invested capital. The LLC must have some kind of initial capital, the contribution of which is indicated in the agreement. Each company member must contribute their share, which determines their share in the company (expressed as a percentage).
  • Management and operational practices. All principles of company management must be expressed. You can prescribe conditions for the voting of members, tax regime, conditions for liquidation of the company, methods of transferring company shares, actions in the event of a member’s death, whether a manager or members will manage the company, and any other relevant information.

You also can check our form-building software to facilitate the creation of the document. You will find it on our website.

Wisconsin LLC Laws and Definition

The formation and operation of an LLC are regulated by Chapter 183 of Wisconsin State Law. Before starting a firm, it is advisable to study the law carefully or hire an experienced lawyer to avoid embarrassing mistakes.

An operating agreement is defined in § 183.0102 (16), which is a written agreement that governs the relationship between members and business conduct.

If you decide not to form an LLC operating agreement, disputes will be resolved according to state law. Therefore, if you do not want this, it is important to document all the key points. The courts will refer to the agreement first.

According to § 183.0405, you are required to keep all operating agreements, including those that are no longer valid and all additions, at the company’s office. It is also important that all members of the company have a copy. Furthermore, supply copies of the agreement to your lawyers, accountants, banks, and everyone involved.

Steps to Forming an LLC in Wisconsin

Setting up a company seems confusing and complicated. However, in reality, everything is much easier if you break the task down into steps. Let’s consider the main steps to take to open an LLC in Wisconsin.

Choose a Name for the Company

Choosing a name is a critical process because the company’s name should appeal to you, attract clientele, be sonorous, and meet the state’s requirements.

These requirements include:

  • Mention of the form of the company. The name must contain a reference to the fact that it is an LLC.
  • The name must not be already taken by another company in the state, and it must be unique.
  • It should not overlap with government services (for example, State Department, Treasury).
  • Must not include forbidden words. Such words require additional permissions and documents (for example, School or Museum).

You can use special sites to know whether your name or domain is free and whether the name contains prohibited words.

Assign Registered Agent

Assigning a registered agent is the next required step. This agent is essentially the contact used for all official government or state correspondence, such as from a court or state department.

The agent can be a firm or an individual. You can designate yourself or any company member, but the member must be registered in Wisconsin.

You can also use the services of special firms that will act as your registered agent.

Prepare Articles of Organization

Articles of Organization is an important and obligatory document for starting a company in Wisconsin.

You can fill out the document online or by mail, and you will have to pay a fee.

Articles of Organization includes basic information—company name, registered agent data, name and signature of the person who created this document. However, you will also need to indicate the management of the company—whether it will be managed by a manager (or managers) or members of the company. Therefore, this moment is worth considering in advance.

Registration of Articles of Organization usually takes five business days, and the cost ranges from $130 to $170.

Write an LLC Operating Agreement

Drafting this agreement is not mandatory by law but highly recommended by all business professionals.

This document prescribes all the rules relating to the company’s management and operation, initial capital, divides shares between company members, and separates your personal assets from the company’s assets.

This document is also useful in court as it documents your company rules, which will have privileges over those specified in law. Otherwise, disputes will be considered based only on state law.

You can read more about the LLC operating agreement above.

Get Employer Identification Number

If you plan to carry out any financial transactions or if your company is more than one person, you need an EIN. It can easily be obtained from the Internal Revenue Service (IRS) online or by mail.

Each LLC needs its unique EIN. You cannot use an existing one.

You will need an EIN to hire and transfer employees’ salaries, open a bank account, and file tax returns.

Submit your Annual Report

Every LLC in the state is required to file an annual report with the Department of Financial Institutions.

This report must be filed at the end of the calendar quarter of the anniversary month of the LLC’s formation.

Instructions on how to fill out the report are sent to the address of your registered agent.

Registration of the report is paid. You will have to pay from $25 to $80 every year.

These are the basic steps for starting an LLC in Wisconsin. Of course, it is recommended to take additional actions. For example, hire a good accountant and a lawyer to take care of payroll, accounting, and tax reporting.

You can take out insurance for your business to protect the company from additional risks.

Finally, start your advertising campaign with a press release.

We wish you the best in doing business with your LLC.

Published: Mar 24, 2021