How to Start an S-Corp in Wisconsin


Steve Goldstein
Steve Goldstein
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Steve Goldstein runs LLCBuddy, helping entrepreneurs set up their LLCs easily. He offers clear guides, articles, and FAQs to simplify the process. His team keeps everything accurate and current, focusing on state rules, registered agents, and compliance. Steve’s passion for helping businesses grow makes LLCBuddy a go-to resource for starting and managing an LLC.

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Start an S-corporation in Wisconsin

Wisconsin, popularly known as The Badger State, offers a bunch of benefits for business owners, especially the state capital Madison has a lot to offer to the rising entrepreneurs in the state. If you want to start a business in Wisconsin, you must choose an appropriate corporate structure. You can have a corporation or a sole proprietorship or set up an LLC in Wisconsin. There are a few guidelines that you should be aware of when it comes to starting an S-Corporation. In Wisconsin, S-Corporation is businesses’ most common corporate structure, especially start-ups. It was developed in order to give companies limited liability protection while preserving the advantages of being a distinct legal organization.

In this article, you will learn about how to start an s-corporation in Wisconsin. You will also learn whether an s-corporate business structure suits your business. Please read all the points carefully before starting your business in Wisconsin.

What is an S-Corp in Wisconsin?

An S corporation (S-corp) is not a type of corporate entity, unlike a limited liability company (LLC) or other business structures. It’s a tax classification that might result in significant financial savings for both corporations and LLCs but in different ways. S-corp is similar to LLC, except that the IRS treats it as a corporation for tax purposes.

If you want an S corp status for your business, you can always form an LLC to protect your personal assets from business debts. It takes some basic steps to have a successful s-corporation in Wisconsin. S-Corps do pay corporate income taxes, but they are still treated as disregarded companies for federal tax purposes.

S-corps pay corporate taxes that LLCs do not have to pay. If you want to have an S-corp status, then we would recommend you have an LLC instead. This will protect your personal assets from your business liabilities and you don’t have to pay any corporate taxes.

–LLCBuddy Editorial Team

Limitation and Requirements of S-Corp in Wisconsin

As you have decided to have an S-Corp structure for your business, you must know the limitations and requirements to qualify for S-Corp status. We have listed some important points to consider following for your reference-

  • Be a domestic corporation.
  • Not be an ineligible corporation, such as specific financial institutions, insurance providers, or domestic corporations engaged in overseas sales.
  • Have just one type of stock.
  • Have a maximum of 100 shareholders or members.
  • Have only permitted individuals, certain trusts, and estates as stockholders or members.

If you are qualified for the limitations and requirements, you can apply for an S-Corp in Wisconsin.

How to Start an S-Corporation in Wisconsin?

To create S-Corp in Wisconsin, you must follow the below guidelines that include forming a business name, hiring a Registered Agent, filing your Articles of Organization, creating an operating agreement in Wisconsin, requesting an EIN, filing a form 2553.

Step 1: Register a Business Name in Wisconsin

After you have decided on the idea to start an S-Corp in Wisconsin, deciding the name for your corporation is significant. Legal procedures should be taken into account when choosing your partnership name. Choose a business name that will enable you to develop a strong brand identity.

If you want to set up an LLC, there is a complete guide on Wisconsin LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your S-corp.

  • Avoid profanities
  • The name should be available, and no other entity should have the same name in Wisconsin.
  • Limit of restricted words that need a license in Wisconsin, for example, doctors, attorneys, etc.
  • Do not use a business name that sounds like a government agency or entity (like “police,” “county,” and “state”)

Step 2: Hiring the Wisconsin Registered Agent

The next step in starting an S-corp in Wisconsin is hiring a Wisconsin Registered Agent, a person that accepts legal paperwork on behalf of your business. This person or business will receive important tax forms, legal documents (such as subpoenas), all notices of lawsuits, and other official government correspondence in Wisconsin. Forming an LLC and an S-corp will be easier if you have Registered Agent in Wisconsin.

Step 3: File Your Wisconsin Articles of Organization

The Articles of Organization is an important document to start your limited liability company (LLC). Wisconsin Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization. In order for the “Articles of Organization” to be filed, you need to pay a filing fee to the state. In Wisconsin, the filing fee is $170 (by mail and $130 online).

In California, along with the Articles of Organization, you must send the Statement of Information to file your company. The statement of information is a mandatory document in California, but other states do not have this document.

Step 4: Creating an Operating Agreement in Wisconsin

After you have filed your Articles of Organization in Wisconsin, the next step is to create an LLC operating agreement in Wisconsin. The Wisconsin LLC operating agreement is essential and necessary since it will cover your corporation’s important documentation and rules. The operating agreements usually include the following-

  • Article I: Organization
  • Article II: Management and Voting
  • Article III: Capital Contributions
  • Article IV: Distributions
  • Article V: Membership Changes
  • Article VI: Dissolution

After creating the LLC operating agreement, you can benefit in several ways since it will discuss how decisions for the business will be made, including management and member voting structure. For more details about how an operating agreement works, please check Operating Agreement.

Step 5: Request for EIN in Wisconsin

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your general partnership. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Wisconsin can be through the following:

  • Apply Online- You can apply for EIN online, the most desirable and fastest method for users.
  • Apply by Fax- Another method of obtaining EIN is to fax Form SS-4 (PDF) after entering all the correct information to (855) 641-6935.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

If you would like to be assisted in getting an EIN in the Internal Revenue Service, we can get your EIN for you. Our EIN service is quick and hassle-free. For more details about EIN for your business, check why you need EIN.

Step 6: File Form 2553 for Your S-Corp Business in Wisconsin

Once you have obtained your EIN and Articles of Organization to form an S-Corp, you must file Form 2553, Election by a Small Business Corporation, to apply for S-corp status. Filing a form 2553 should be done 75 days after the formation of your S-Corp, or not more than 75 days after the beginning of the tax year in which the election is to take effect.

If your LLS-Corp has passed the deadline of 75 days, you must also file Form 8832, Entity Classification Election, in order to opt to be taxed as a corporation. Then you would send Form 2553 and Form 8832 jointly by certified mail from the USPS. In Wisconsin, you can send your form 2553 to the Department of the Treasury Internal Revenue Service Center – Kansas City, MO 64999 Fax: 855-887-7734.

Advantages of Starting an S-Corporation in Wisconsin

Filing an S-Corp in Wisconsin has numerous benefits and advantages.

  • Writing Off Losses: With S-corp, owners can deduct business losses from their individual income statements. If the company loses money in the first few years, it may balance its other sources of revenue. Even so, understand the shareholder loss limitations set by the IRS.
  • Pass-Through Taxation: Starting an S-Corp is the widely known advantage in forming this kind of business structure since an s-corp uses a pass-through taxation structure. The company does not pay twice the tax in this kind of taxation. Because of this structure, most start-ups and entrepreneurs in Wisconsin apply for an S-Corp LLC.
  • Qualified Business Income Deduction: A qualified business income, or QBI, is the total of all qualified items of income, gain, deduction, and loss from any qualified trade or business, including S-Corp. With this, S corp owners may deduct up to 20% of their eligible earnings under the Tax Cuts and Jobs Act.

FAQs

What is an S-Corp in Wisconsin?
An S-Corporation in Wisconsin is a type of legal business entity that combines the tax benefits of a partnership with the limited liability of a corporation.
How do I start an S-Corp in Wisconsin?
To start an S-Corp in Wisconsin, you must first file a Certificate of Assumed Name with the Department of Financial Institutions, register the business with the Wisconsin Department of Revenue, and then file Form 2553 with the IRS to officially obtain S-Corp status.
What are the benefits of starting an S-Corp in Wisconsin?
Some of the benefits of an S-Corp in Wisconsin include
What are the disadvantages of starting an S-Corp in Wisconsin?
Some of the disadvantages of an S-Corp in Wisconsin include
What paperwork is required to start an S-Corp in Wisconsin?
The paperwork required to start an S-Corp in Wisconsin includes
Do I need to obtain a business license to start an S-Corp in Wisconsin?
Yes, in order to start an S-Corp in Wisconsin, you will need to obtain a business license from the Wisconsin Department of Financial Institutions.
How do I register an S-Corp in Wisconsin?
To register an S-Corp in Wisconsin, you must first file a Certificate of Assumed Name with the Department of Financial Institutions and then register the business with the Wisconsin Department of Revenue.
What are the filing fees for an S-Corp in Wisconsin?
The filing fees for an S-Corp in Wisconsin vary depending on the type and size of the business, but typically range from $50 to $200.
What taxes do S-Corps in Wisconsin have to pay?
S-Corps in Wisconsin are subject to income, sales, and property taxes. Additionally, they may also be subject to federal and state taxes.
Are S-Corps in Wisconsin required to file an annual report?
Yes, S-Corps in Wisconsin are required to file an annual report with the Wisconsin Department of Financial Institutions.
Are there any restrictions on S-Corps in Wisconsin?
Yes, there are restrictions on S-Corps in Wisconsin, including a limit of 100 shareholders and a requirement to have a valid business purpose.
Do S-Corps in Wisconsin need to have board meetings?
Yes, S-Corps in Wisconsin are required to have annual board meetings.
Are S-Corps in Wisconsin required to issue stock?
Yes, S-Corps in Wisconsin are required to issue stock.
What is the difference between an S-Corp and a C-Corp in Wisconsin?
The main difference between an S-Corp and a C-Corp in Wisconsin is that S-Corps are pass-through entities that are not subject to double taxation, while C-Corps are subject to double taxation.
Is it possible to convert an LLC to an S-Corp in Wisconsin?
Yes, it is possible to convert an LLC to an S-Corp in Wisconsin.
Do I need an attorney to start an S-Corp in Wisconsin?
Although an attorney is not required to start an S-Corp in Wisconsin, it is recommended that you consult with one to ensure that you are in compliance with all applicable laws and regulations.
Is there a limit to the number of shareholders allowed for an S-Corp in Wisconsin?
Yes, there is a limit of 100 shareholders for an S-Corp in Wisconsin.
Are S-Corps in Wisconsin required to pay unemployment taxes?
Yes, S-Corps in Wisconsin are required to pay unemployment taxes.
Are S-Corps in Wisconsin allowed to issue stock options?
Yes, S-Corps in Wisconsin are allowed to issue stock options.
How much does it cost to start an S-Corp in Wisconsin?
The cost to start an S-Corp in Wisconsin varies depending on the type and size of the business, but typically ranges from $50 to $200.
What is the filing deadline for S-Corps in Wisconsin?
The filing deadline for S-Corps in Wisconsin is April 15th of every year.
Is there a minimum capital requirement for S-Corps in Wisconsin?
No, there is no minimum capital requirement for S-Corps in Wisconsin.
Are S-Corps in Wisconsin required to file an annual tax return?
Yes, S-Corps in Wisconsin are required to file an annual tax return.
Are S-Corps in Wisconsin subject to double taxation?
No, S-Corps in Wisconsin are not subject to double taxation.
Are S-Corps in Wisconsin required to have a registered agent?
Yes, S-Corps in Wisconsin are required to have a registered agent in order to be able to receive legal notifications.
Is there a minimum number of shareholders for an S-Corp in Wisconsin?
No, there is no minimum number of shareholders for an S-Corp in Wisconsin.
Is there a minimum age requirement to form an S-Corp in Wisconsin?
No, there is no minimum age requirement to form an S-Corp in Wisconsin.
Are S-Corps in Wisconsin required to have bylaws?
Yes, S-Corps in Wisconsin are required to have bylaws.
Can I form an S-Corp in Wisconsin without having to register with the state?
No, you cannot form an S-Corp in Wisconsin without registering with the state.
What are the filing fees for a Wisconsin S-Corp?
The filing fee for an S-Corp in Wisconsin is $130.
What are the tax benefits of forming an S-Corp in Wisconsin?
S-Corps in Wisconsin are eligible for certain tax benefits, such as avoiding double taxation and taking advantage of pass-through taxation.
What are the ongoing requirements for a Wisconsin S-Corp?
Ongoing requirements for an S-Corp in Wisconsin include filing an annual report and paying franchise taxes. Additionally, S-Corps must hold annual meetings and keep accurate records of financial transactions.

Also Read

Why Wisconsin S Corporation is So Important

One of the primary reasons why Wisconsin S Corporations are so important is because they provide a tax advantage over other types of business entities. S Corporations are pass-through entities, which means that the profits and losses of the corporation “pass through” to the shareholders, who report them on their personal tax returns. This can result in significant tax savings for shareholders, as they are able to avoid the double taxation that typically occurs with traditional C Corporations.

In addition to the tax benefits, S Corporations also offer limited liability protections to their shareholders. This means that the personal assets of the shareholders are generally protected from the debts and liabilities of the corporation. This is a critical feature for business owners looking to shield themselves from financial risk and ensure that their personal assets are not at risk if the business faces legal issues or financial difficulties.

Furthermore, S Corporations are structured in a way that promotes growth and innovation. By providing owners with the ability to invest in their business and the flexibility to re-invest profits, S Corporations can often grow more rapidly and adapt to changing market conditions more easily than traditional business structures. This can lead to job creation, economic growth, and a more robust business environment in Wisconsin.

Another reason why Wisconsin S Corporations are so important is because they offer a level playing field for small businesses to compete with larger corporations. By providing similar tax advantages and legal protections as larger companies, S Corporations enable small businesses to thrive and grow without being hindered by excessive taxes or legal liabilities.

In summary, Wisconsin S Corporations are a critical element of the state’s business environment. They offer tax advantages, limited liability protections, and a platform for growth and innovation that can benefit both business owners and the overall economy. By choosing to operate as an S Corporation, small to medium-sized businesses in Wisconsin can take advantage of these benefits and position themselves for success in today’s competitive marketplace.

Conclusion

In conclusion, starting an S-corp in Wisconsin is a strategic choice for entrepreneurs seeking the benefits of limited liability and favorable tax treatment. One can successfully establish an S-corp by following the outlined steps, including selecting a unique name, filing the Articles of Incorporation, obtaining necessary licenses, and adhering to state-specific regulations. Ultimately, this corporate structure offers a strong foundation for business growth and protection, making it a worthwhile consideration for those looking to launch a venture in Wisconsin.

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