Are you planning to start a business in Wisconsin as an S-corporation? This guide provides a step-by-step process to start an S-corp in Wisconsin, including the legal requirements, tax obligations, and how to register your S-corp with the state.
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What is an S-corp?
Firstly, it is important to understand what an S-corp is. An S-corporation, also called a Subchapter S corporation, is a type of business entity that allows the company to avoid paying double taxes on their income. S-corp is a pass-through entity whose income is passed through to its shareholders, who report their share of the income and losses on their individual tax returns. However, S-corporations have certain limitations: they can only have 100 shareholders and only issue one class of stock.
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Legal Requirements for Starting an S-corp in Wisconsin
To start an S-corp in Wisconsin, you need to follow these steps:
Step 1: Choose a unique Name for your Business
Before you start your business, you need to give it a catchy and unique name. The name of your business should reflect the type of service and products you offer. Choose a name that resonates with your customers and is easy to remember. Remember that your business name should not be similar to another already existing business, as this will result in legal issues, confusion among customers, and can lead to warning or penalties.
To check if your business name is unique and available in Wisconsin, visit the Business Entities Search page of the Wisconsin Department of Financial Institutions (DFI).
Step 2: Choose a Registered Office
After choosing a unique name, the next step is to select a location for your registered office. This is important because Wisconsin law requires S-corporations to have a registered office address in the state. You can either use your home address or rent an address from a mail receiving business (Private Mailbox) that offers you an official address that can be used for business legal purposes.
Step 3: Prepare the Articles of Incorporation
Articles of Incorporation must be prepared in order to file for an S-corps in Wisconsin. Some of the essential things that you should include in it are:
- Name and address of the registered agent
- The purpose of your business
- Stock information
- A description of the company's managers
Once yon have made it, review it over and ensure it has no faults before filling. Then proceed for filling it with the Wisconsin secretary of state.
Step 4: Prepare the S-corp bylaws
Bylaws are simple legal documents that define the functions and purpose of your business. It also lays down rules and regulations to implement in business when it sets up operations. It reflects company strategies and ideals outlined by the management for running the business complying with Wisconsin business statutes. In Wisconsin, the law requires all companies to have written bylaws, particularly S corporations.
Step 5: Acquire Federal Employer Identification Number (EIN)
Another essential process in starting an SEC in Wisconsin is acquiring an Employer Identification Number or (EIN). An EIN is a 9 digit number that is provided by the Internal Revenue Service (IRS) for businesses operating in the U.S. To obtain an EIN, fill a tax form called Form SS-4 to the IRS per request online.
Step 6: Register for state taxes in Wisconsin
Once you have acquired EIN, you must register for Wisconsin state taxes when your Wisconsin annual income exceeds $1,000. The state requires all Wisconsin businesses operating an S-corp structure to make business-related tax payments through electronic means. In other words, if you want to do business in Wisconsin, you must know severally what is defined commonly as SUI – State Unemployment Insurance Within Wisconsin.
Step 7: Obtain Required Wisconsin Licenses and Permits
Depending on the size and scale of your S-corps propose business , business entities in Wisconsin might be required to acquire several business licenses and permits before it starts operating. The requirements usually have a direct bonding to the particular industry that is eligible. Clams; electrical, plumbing, construction, pharmacists—call all patent is different from each other in standard when it comes to business licensing.
Conclusion
Starting an S-corp in Wisconsin is a great way to avoid double-tax on your income while growing a small business in one of the most friendly business terrain in the United States. With these guidelines and following every step, businesses can maximize succesful setup. Whether it's building traditions with firm businesses with an establishment in Wisconsin or competitive the nationwide names operating within the area - every business should have its steps to take. Research before taken steps speak, actions establish great growth.
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