Please note that I actually wrote this on Wednesday, just didn’t get it published until today!
I help a lot of people set up an LLC with the State of Wisconsin. The process isn’t very complicated and I sometimes do it online, with my clients present. Don’t think that this post is going to give you everything you need to know about setting up your LLC. Choosing to do business as an LLC as opposed to a partnership, corporation, non-profit, or sole proprietorship has implications on your taxes and your legal exposure if your business gets into trouble. Creating an LLC has implications on your estate if you should die. It becomes an asset that potentially is subject to division if you (or your partner) get divorced. I advise talking to a lawyer who can explain the different entity choices and what long-term effects the different choices have for you.
That being said, here we go, off to the State of Wisconsin Department of Financial Institutions. Your first step for setting up your LLC is to choose a name for it. You cannot pick a name that someone else is already using. How do you know if your choice is available?
Go to www.dfi.gov and click on “I want to search…” a menu will drop down, choose “Corporate Records”
You will get a page with a search box. Type in the name you want to use. Any similar name will show up in the results.
Search results for “Kirk Law” were:
If the name you would like to use is not listed, you are good to go because it is available. Wisconsin requires that you will have to use “L.L.C./Limited Liability Company/LLC” or some other variation in your name. This is a requirement because it lets the world know what type of entity you are choosing.
Go back to the main DFI page. Click on, “I want to file…” in the dropdown menu choose “Create a Corporation/LLC”
The website will take you through several questions, some seem very repetitive. Here are a few keywords you will need to know:
“Member” is an owner of the LLC, like a stockholder in a corporation. An LLC can have one or many members. Members can be people or other legal entities like another company.
“Manager” is the person or people who get to make decisions about how the LLC operates. I can be a member, or not a member. You will have a question asking whether the LLC will be “member-managed.” If you want to restrict decision-making only to owners you should choose to be member-managed.
“Registered Agent” is the person who is the official contact for the LLC. If you get sued, this person is the one who must be served with paperwork.
“Organizer” is the person who is creating the LLC. It may be a member, or could be someone else, like your attorney or accountant.
“Article of Organization” is the document that creates your LLC. It’s like your very own constitution, or charter.
“Operating Agreement” is the rule-book for how your LLC operates. It can determine who gets to be a member, how profits are paid, memorializes what everyone’s initial contribution to the LLC was, designates what happens if a member dies or wants to get out of the LLC. There are some standardized forms available over the internet, but if you have a spouse or a partner, you should review your operating agreement with a lawyer. I’m not trying to hard sell you here. I just think that getting a lawyer’s perspective matters. What if your LLC co-member gets divorced? What if you become seriously ill or are injured in a car accident and can’t do your fair-share for the LLC anymore? There are lots of contingencies you can plan ahead for to avoid trouble down the road.
There is a filing fee of $130 for registering your LLC. You will have to pay it online. Alternatively, you can have a lawyer draft up the paperwork and send it to the DFI with a check. Once you “file” the registration, you will be notified via e-mail that it has been received. That does not mean it has been “filed.” Once it is “filed” you will receive a notice providing you with a DFI Entity Number.
And that, folks, is how an L.L.C. is created. It is not magical, it’s an online form-filling and payment process. The real “magic” of what I do is sit down with people and explain how creating an LLC or any business entity establishes a relationship with co-owners, impacts your relationship with your spouse, and affects your annual income tax exposure, medical assistance eligibility, and so much more. Contact me if you have questions.
Johanna R. Kirk
Kirk Law Office, L.L.C. – 1418 Tower Ave. Suite #6; Superior, WI 54880 (715)-718-2424