If you are in the process of incorporating a new limited liability corporation (“LLC”) or changing the designation of an existing business to an LLC, there are some legal issues you need to be aware of. Although there are many advantages in operating as an LLC, including the ability to avoid personal liability, being freed from the double taxation that other corporate entities must endure, and enjoying much simpler corporate filing requirements, there are also risks.
Applying for LLC Status
In Wisconsin, the process of incorporating an LLC is fairly straightforward. Many business owners make the decision to avoid problems by getting help from a business litigationyer to manage all of the details correctly. The Wisconsin Department of Financial Institutions (“WDFI”) maintains an online portal where a business can incorporate as an LLC. The laws that set forth the procedures for incorporation as an LLC and all other matters pertaining to LLC entities are found on the Wisconsin legislature’s website in Chapter 183 of the Wisconsin state statutes.
In order to incorporate as an LLC, an applicant needs to provide the following information:
- the proposed name of their LLC,
- the name of their registered agent and the registered agent’s office address,
- the type of management which will run the LLC, i.e. manager(s) or member(s),
- the organizers’ names and addresses,
- the drafter’s name, or the person actually filling out the online form submission,
- the signature of the organizer(s),
- contact information of the person filing the submission,
- and credit card payment information.
The Wisconsin LLC application filing fee is non-refundable. Once you have completed your filing, the WDFI will send you a confirmation of filing and communicate any other additional information needed to complete the process. For an additional fee, the state allows you to expedite the process and receive approval the next day.
Maintaining Your Business’ LLC Status
Once you have incorporated your business as an LLC, there are several annual requirements necessary to keep it in good standing. First, you will have to create and maintain an Operating Agreement. This document is not filed with the state, but rather, it must be kept by the corporation.
Wisconsin statute 183.0102(16) defines an Operating Agreement as “an agreement in writing, if any, among all of the members as to the conduct of the business of a limited liability company and its relationships with its members.” Each year, the LLC must file an Annual Report with WDFI. WDFI will send the LLC’s registered agent an email each year with a unique ID number with which to begin the online submission of the annual report.
Forms for effectuating any other corporate matters, such as amending the articles of incorporation, dissolving the corporation, changing members or merging with another corporation, must all be filed properly and in a timely manner.
Avoiding legal problems is a crucial aspect of doing business. You may lose the protection of an LLC if you fail to keep all filings and legal requirements up-to-date. Most business owners choose to have a lawyer handle these details, for their own protection.
Please do not hesitate to contact our attorneys at Kerkman Wagner & Dunn if you have any questions about the application process or maintaining your LLC in good standing. With over 50 years of combined experience in Wisconsin business litigation, we are confident that we can help you and your company with any issue that may arise. We look forward to hearing from you.