An LLC, or limited liability company, is a type of business structure that gives personal liability protection to its owners, known as members, meaning that members of an LLC are not responsible for the company’s debts and liabilities, and their personal assets are generally protected from creditors.
An LLC in Wisconsin is formed by filing articles of organization with the Wisconsin Department of Financial Institutions. The articles of organization need to include the LLC’s name, the members’ names and addresses, and the registered agent’s name and address. It’s advisable to check the availability of the desired LLC name before filing the articles.
LLCs in Wisconsin also have to file an annual report and pay a fee every year to stay in good standing with the state.
Like any other state, Wisconsin law also allows members to adopt an operating agreement to govern the internal affairs of the LLC, including details such as the management of the LLC, the distribution of profits, and the process for dissolving the LLC.
It’s important to note that while an LLC can have any number of members if it has more than one member, it is considered a multi-member LLC. Single-member LLCs are taxed as sole proprietorships.
Also, depending on the number of members, the IRS may classify them as a partnership or a corporation for federal tax purposes. The LLC can also be taxed as a corporation if the members want it to.
As always, consulting a lawyer or professional with experience in LLC formation in Wisconsin is advisable to ensure compliance with the law and regulations.
What Paperwork Do I Need to File for a Wisconsin LLC?
To form a limited liability company in Wisconsin, you must file certain paperwork with the Wisconsin Department of Financial Institutions. Here is an overview of the main documents that you’ll need to file:
- Articles of Organization: The articles of organization are the main document you’ll need to file to form an LLC in Wisconsin. These documents must include the LLC’s name, the member’s names and addresses, and the registered agent’s name and address. It is advisable to check the availability of the desired LLC name before filing the articles.
- Registered Agent Designation: An LLC must have a registered agent in Wisconsin who is responsible for receiving legal documents on behalf of the LLC. The registered agent must have a physical address within the state. The name and address of the registered agent must be submitted with the articles of organization.
- Operating Agreement: An operating agreement is not required by Wisconsin state law, but it is highly recommended. It is a document that outlines the internal rules and procedures of the LLC, including details such as the management of the LLC, the distribution of profits, and the process for dissolving the LLC.
- Pay the filing fee: You will also need to pay a filing fee when you submit your articles of organization. The fee amount varies depending on the LLC’s structure and the number of members. Check the Wisconsin Department of Financial Institutions website for the current fee.
- Annual report and fee: Every year, an LLC in Wisconsin is required to file an annual report and pay a fee to the Department of Financial Institutions in order to stay in good standing with the state.
It’s important to note that LLCs, like any other business, may have other federal and state tax and regulatory compliance obligations, so it’s always best to consult a lawyer or professional experienced with LLC formation in Wisconsin to ensure you are fulfilling your obligations and to avoid any penalties.
Can I Kick a Member Out of a Wisconsin LLC?
Yes, removing a member from a limited liability company (LLC) in Wisconsin is possible. The process for removing a member will depend on the terms outlined in the LLC’s operating agreement. If the operating agreement is silent or unclear on the matter, the default Wisconsin LLC Act provisions will apply.
The Wisconsin LLC Act provides that members can be removed by unanimous consent of the other members or in accordance with the operating agreement of the LLC. If the operating agreement doesn’t specify the process of removing a member, the member may be removed by the vote of a majority of the members, and that would be the default provision in the law.
Following the terms outlined in the LLC’s operating agreement or the Wisconsin LLC Act is important to avoid any legal issues, including giving the member notice and an opportunity to be heard if that’s a requirement in the operating agreement.
If a member is removed from the LLC, they are entitled to receive their capital account balance and any other distributions, and the operating agreement should include how this will be done.
It’s worth consulting a lawyer experienced in LLC law in Wisconsin so that you can be sure the process is done correctly and you avoid any legal issues, such as breach of contract, that may arise from a wrongful removal of a member.
Can I Change a Wisconsin LLC Into a New Business Structure?
Yes, changing a limited liability company in Wisconsin to a different type of business structure is possible.
The process for changing the business structure will depend on the type of new structure you want to convert to and the laws of the state of Wisconsin. Some of the most common forms of business structures are a corporation, partnership, and sole proprietorship, among others.
A common way of changing the structure is called conversion, where the LLC can convert into a corporation, partnership, or any other entity.
Typically, this involves filing articles of conversion or amendment with the Wisconsin Department of Financial Institutions and drafting new articles of incorporation, partnership agreements, or other governing documents specific to the new entity type.
Another way is a merger, when one or more LLCs merge with or into another entity, becoming a new entity. This process also requires filing articles of merger with the Wisconsin Department of Financial Institutions and other legal formalities to comply with state laws.
Additionally, the dissolution of the LLC, followed by the creation of a new entity, can also be an option. However, this can be a more complex and time-consuming process and may have tax implications.
It’s essential to consult with a lawyer experienced in business law in Wisconsin and federal law to ensure the process is done correctly and to avoid any legal issues. They will be able to advise you on the best options for your specific situation and help you navigate the legal requirements and procedures involved in changing your LLC’s structure.
How Can a Lawyer Help With a Wisconsin LLC?
A Wisconsin corporate lawyer with experience in business law in Wisconsin can assist with a wide range of legal matters related to limited liability companies in the state. Some examples of how a lawyer can help with a Wisconsin LLC include the following:
- Forming an LLC: A lawyer can help you navigate the process of forming an LLC in Wisconsin, which includes drafting and filing articles of organization, drafting an operating agreement, and registering with the Wisconsin Department of Financial Institutions. They can also help you choose an appropriate name, check availability, and ensure your LLC complies with state laws and regulations.
- Reviewing and revising operating agreements: A lawyer can review your LLC’s existing operating agreement or help you draft a new one to ensure it is tailored to your specific business needs and complies with state laws and regulations.
- Removing a member: A lawyer can help you through the process of removing a member from an LLC, including reviewing the operating agreement, giving the member notice and opportunity to be heard, and making sure the process is done in compliance with the state laws and regulations.
- Change of Business Structure: A lawyer can advise you on the best options for changing the structure of your LLC and help you navigate the legal requirements and procedures involved in converting or merging the LLC in compliance with state and federal laws.
- Compliance and Annual Reports: A lawyer can ensure that your LLC is in compliance with state laws and regulations, including filing annual reports and paying fees to the Wisconsin Department of Financial Institutions.
- Legal issues: A lawyer can help you navigate any legal issues, such as disputes with members or outside parties or compliance issues with state and federal agencies.
A lawyer with experience in business law in Wisconsin can provide peace of mind and help protect your interests as a member of an LLC.
