How to start a business in Wisconsin [Updated 2024]
Wisconsin is a great place for entrepreneurs to build successful businesses. In fact, small businesses represent a whopping 99.4% of all businesses operating in the Badger State, and new business applications reached the highest level on record during the pandemic. With a lower cost of living compared to other states and various tax credits and incentives available, it’s no wonder many small business owners choose to set up operations in Wisconsin.
Are you ready to start your business but not sure where to begin? You’ll likely need to do market research, calculate startup costs, and develop your brand identity. But you also need to ensure you stay compliant with Wisconsin filing and tax requirements.
Putting your business idea into action might seem like a daunting task, but we’ve got you covered. In this step-by-step guide, we’ll walk you through how to set up a Wisconsin business—from deciding on your business structure to complying with Wisconsin laws.
1. Name your business
Have a great name in mind for your business? Make sure it’s compliant with Wisconsin regulations by following these steps:
- Run a search on the Wisconsin One Stop Business Registration Portal to check that your chosen name is still available.
- Ensure it meets the naming criteria laid out in Wisconsin’s Department of Financial Institutions website.
- Check whether someone else has already trademarked your name by running a quick search on the US Patent and Trademark Office.
- Lock in your business name on the One Stop Business Portal.
- Register a web domain name and social media accounts under your business name.
You can also register a “doing business as” (DBA) name if you want to operate another brand under your business with a different name.
2. Explore your funding options
Several loans and grants are available for small businesses in Wisconsin. You’ll want to familiarize yourself with the options laid out on the Wisconsin Department of Workforce Development’s (DWD) website, but here’s a quick summary:
- Wisconsin programs & organizations: Programs like Small Business Grants for Women in Wisconsin and the Wisconsin Economic Development Corporation help small businesses gain access to capital.
- Federal organizations: The Small Business Administration (SBA) is the country’s go-to resource for starter loans and counseling.
- Local resources: Different cities and counties offer a range of services, including business planning assistance, mentoring, and grants.
3. Decide on your business structure
An important step in forming your Wisconsin business is deciding on the right type of business structure for your needs.
Common business entities you can set up in Wisconsin include:
Business type
What is it?
Pros and cons
Sole proprietorship
Informal business structure with one owner
✔ Easy to set up.
✔ Pass-through taxation: You report business income or losses on your personal tax return.
✘ You’re personally responsible for any business debts, obligations, and lawsuits.
Limited liability company (LLC)
Hybrid business structure with one or more member owners, requiring an operating agreement
✔ Combines benefits of a partnership and corporation.
✔ Easier to set up and maintain than a corporation.
✔ You can choose to be taxed as a pass-through entity to avoid the double taxation that corporations face.
✘ More formal requirements compared to sole proprietorships.
✘ No stock options: Unlike corporations, Wisconsin LLCs cannot sell shares to outside investors.
Business corporation
Legal entity separate from the business owners, managed by a board of directors elected by shareholders
✔ Liability protection for business owners: The corporation bears all tax and legal responsibilities.
✔ Can be structured as a C-Corp or an S-Corp.
✔ Transferring ownership is simple.
✔ Attractive to investors and employees since it’s governed by more formal regulations than LLCs.
✘ More legal formalities than other business structures, like holding shareholder meetings and keeping internal records.
✘ “Double taxation”: the corporation pays income taxes, and shareholders also pay taxes on their income from dividends.
Statutory close corporation
Business or service corporation in which the shareholders agree to certain limitations
✔ Fewer corporate formalities—shareholders may elect to operate without a board of directors.
✔ Shareholders have more flexibility in management and decision-making compared to regular corporations.
✘ Might be more legally complex to establish and maintain due to specific statutory requirements.
✘ Growth limitations: Shareholders face stricter limitations for transferring shares.
Limited partnership
Structure managed by one or more controlling partners and at least one limited partner
✔ Combines the financial resources of limited partners with the management abilities of general partners, where liability is customized to each partner.
✔ Pass-through taxation: You’re only taxed once.
✘ General partners have unlimited liability for debts and anything that goes wrong.
✘ More compliance requirements compared to general partnerships.
4. Register your business in Wisconsin
While you don’t need to register a sole proprietorship business with the Wisconsin Department of Financial Institutions (DFI), you do need to register other business structures and pay the required filing fees:
Business type
How to register
Costs
LLC
File articles of organization online via the One Stop Business Portal, or by mail.
$130 plus a $1 portal fee when done online
$170 when done offline
Business corporation and statutory close corporation
File articles of incorporation online via the One Stop Business Portal or by mail.
$100 plus a $1 portal fee
Limited partnership
File online or by mail with the Wisconsin Department of Financial Institutions.
$70
5. Decide on a registered agent
When you’re setting up a corporation, LLC, LP, or LLP, you’ll need to appoint a registered agent. This person—whether it's you or a professional—is named on your business's statement of information, which is a public record. They’re the go-to person for handling tax and legal paperwork on behalf of your business.
You can be your own registered agent in Wisconsin, as long as you meet the state requirements: The agent must have an email address and a street address in Wisconsin (not just a P.O. box), be at least 18 years old, and be able to receive legal mail and official communication during business hours.
A professional registered agent can cost you between $100 and $300 per year, depending on the range and speed of their services. Many business owners choose to hire a professional registered agent—either an individual or an agency—to avoid missing important mail and to protect their privacy.
6. Apply for an Employer Identification Number
Before you can hire employees, you need to get an Employer Identification Number (EIN)—sometimes also called a Federal Employer Identification Number (FEIN)—from the IRS.
An EIN is a federal tax ID number, like the business version of a Social Security number. You need it in many situations, such as opening a bank account, applying for loans, and handling tax payments and employee salaries. You can apply for an EIN on the IRS website by filling out form SS-4—the process is easy and free.
7. Get up to speed with Business Tax Credits
Many tax credits, deductions, exclusions, and exemptions are available in Wisconsin to help reduce your tax burden. You can use the Wisconsin Department of Revenue’s Interactive Tax Finder to learn more, but here are a few examples:
- Business Development Tax Credits: Refundable tax credits to support companies with job creation, capital investment, and training.
- Diverse Business Development: Supports existing, new, and expanding minority, women, LGBT, and veteran-owned businesses.
- Brownfields Grant Program: Helps organizations convert contaminated sites into properties that are ready for redevelopment.
8. Stay on top of filing requirements and taxes
To stay in good standing with the state of Wisconsin and continue operating, most business structures need to file annual reports. These are mainly used to ensure your business is up-to-date for tax purposes, and they include information like what your business does, your location, and your registered agent.
When it comes to tax returns, here’s a breakdown of what’s required for different business structures:
- Sole proprietorship: In addition to filing income on your individual tax return, include a Schedule C, which lists your business profits or losses, and any other required forms.
- LLC: The form you use to file income tax returns depends on whether your LLC is classified as a partnership or corporation. Learn more here.
- Corporation: Every corporation in Wisconsin must file a Wisconsin corporate franchise or income tax return. Wisconsin’s corporate tax rate is 7.9%, and the sales tax rate is 5%. Get the details and full requirements here.
9. Find a payroll solution
When it comes to hiring workers in Wisconsin, there’s a lot to keep in mind. First off, you need to ensure you're classifying workers correctly so you don't end up facing fines. Plus, if your employees in Wisconsin work over 40 hours a week, you have to pay them 1.5 times their regular hourly wage.
To keep everything running smoothly and pay your workers accurately and on time, you'll want to use payroll software. A solution like Rippling can save you from manual data entry work, and help you stay compliant with all state regulations. With Rippling Time & Attendance, you can automatically track, approve, and pay employees' hours, and set up alerts for when someone's getting close to overtime. When you’re ready to send payments, you just hit "Submit," and Rippling does all the math for you, calculating net pay and taxes in a flash.
And if you’re hiring beyond the Badger State, Rippling has you covered there, too. You can pay all your people, no matter where they are in the world, in a single pay run—whether they're hourly workers, salaried employees, or contractors. Rippling lets you manage every tool your payroll depends on in one integrated system.
10. Support and scale your growing business with Rippling
As your business expands, you’ll also need a reliable Human Resource Information System (HRIS). This software helps you streamline tasks like hiring and onboarding employees, managing payroll and benefits, and more.
Using an HRIS early on in your business can make your life a lot easier, especially if you're thinking about expanding beyond Wisconsin and going global. Once you reach that stage, Rippling will help you hit the ground running:
- Hiring and payroll: Whether your employees are in Milwaukee, Madison, or on the other side of the world, Rippling lets you run payroll in 90 seconds.
- Compliance: Stay ahead of local, state, and federal regulations.
- Benefits management: Bring all your benefits into one system and automate the manual work that usually eats up your time, like enrolling new hires and updating deductions.
- Recruiting: Rippling keeps all your recruiting data up to date and automates every step of the hiring lifecycle—from headcount planning to sourcing.
- HR analytics: Have a single source of truth for all your HR data, policies, and more.
FAQs about setting up a business in Wisconsin
Do I need a business license in Wisconsin?
Wisconsin doesn’t require a general business license, but you might need an occupational license, depending on your industry. Many cities in Wisconsin also require businesses to have local licenses or permits—check with your local city or county government to confirm what’s needed in your location. Finally, you might need a federal license if you operate within certain industries.
Do I need any permits when starting a new business in Wisconsin?
If you sell taxable products at a sales location in Wisconsin, you need a seller’s permit. This applies to individuals, partnerships, corporations, or any organization, unless your sales are exempt from sales or use tax. Some other exemptions may apply.
Do I need a business bank account when launching a business in Wisconsin?
Like most states, Wisconsin doesn’t legally require you to have a separate business account. But creating one and getting a business credit card is a smart move. It’ll help you simplify your business and personal finances, and protect your personal assets. Plus, if you have employees, you’ll need a business account to handle payroll.
Do I need to get business insurance?
Wisconsin law requires all employers to get certain types of liability insurance, including workers’ compensation or Wisconsin workers’ compensation pool if you have employees.
Whether you’re a sole proprietor or run a corporation, getting general liability insurance would be a wise choice to protect your business and personal assets. There are many types of liability policies available, depending on your needs and industry.
What are Wisconsin’s state payroll taxes?
Wisconsin employers must withhold the following taxes from employee wages:
- Personal Income Tax (PIT). Note: Wisconsin has reciprocity with Indiana, Illinois, Kentucky, and Michigan—meaning residents of these states working in Wisconsin will be taxed on income earned as an employee by their home state rather than Wisconsin.
- Unemployment Insurance (UI)
- State Disability Insurance (SDI)
Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.
