Do you want to expand an existing LLC into Wisconsin with a foreign qualification, but you’re not familiar with the process?
This guide will outline important details when expanding your business and explain how to foreign qualify an LLC in Wisconsin.
Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!
But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.
It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.
For example, if your LLC is registered in Washington and you are looking to open a second location in Wisconsin, you may need to complete a foreign qualification in Wisconsin before you can expand there.
Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.
Foreign qualifying is essentially asking permission to do business in the state of Wisconsin. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Wisconsin yields consequences that are far costlier than registering in the first place. If you fail to foreign qualify, your business:
Imagine that for a moment: your LLC has been caught transacting unauthorized business. You lose your legal power and revenue stream in the state. On top of that, you have, most likely, thousands of dollars in additional fees. It’s not a pretty picture. So, it’s best to avoid this scenario altogether by foreign qualifying as soon as you begin doing business in Wisconsin.
The Wisconsin LLC Act has more information on these penalties in Section 183.1003.
We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Wisconsin? There can be some confusion surrounding this phrase because it’s not specifically defined by the LLC Act. But tax laws indicate that you are considered to be “doing business” in most states and required to foreign qualify if:
And taxes have a role to play too. Depending on how you’ve set up your LLC, it may be subject to certain Wisconsin business-related taxes. When you foreign qualify, you’re letting the state know that you’ll be paying these, and if you don’t, you could run into some heftier fines down the road. It’s important to always stay on top of your LLC’s taxation requirements to avoid any unwelcome surprises.
If you’re unsure whether or not you need to file for a foreign qualification in Wisconsin, we suggest seeking legal counsel.
The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Wisconsin. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:
If you see your only Wisconsin business activities here, you’re most likely off the hook for foreign qualification. For more in-depth descriptions of these exemptions, see the LLC Act, Section 183.1002.
Foreign qualification in Wisconsin is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Wisconsin, you need to acquire a Certificate of Registration. To apply for one, head over to the Limited Liability Company forms page.
Scroll down until you find Form 521: Foreign LLC Certificate of Registration Application. The link will take you to an online form. Simply follow the on-screen prompts and you’ll be done before you know it. It helps streamline the process if you have all of your information ready when you begin. For reference, here’s what you’ll need:
And, like many other states, Wisconsin charges an application fee for foreign qualifications. You can pay this $100 fee with a card (Visa, MasterCard, Discover, or American Express), or eCheck.
Most states require foreign LLCs to also submit a Certificate of Good Standing from their home states, but Wisconsin does not, so don’t worry about obtaining one.
The typical processing time for the Department of Financial Institutions is five business days. But sometimes time is of the essence with foreign qualification, so if you need it done sooner, you can pay an additional $25 for expedited (next-day) processing.
After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification and you’re embarking on another chapter in the life of your business.
Like other states, Wisconsin has certain requirements for business entity names. You’ve done a lot of work to get your LLC foreign qualified, so don’t let it get tripped up because your name doesn’t comply! Make sure that your name:
Considering all the work that goes into expanding your business to a new state, you’ve likely got a lot on your plate. Rather than trying to juggle everything yourself, you can bring on an individual or company to help you secure your LLC’s Wisconsin foreign qualification.
For example, business attorneys understand all the legal nuances involved, providing peace of mind that the job will get done correctly. But if you go this route, be sure you have the budget for it. Lawyer fees for Wisconsin foreign LLC qualifications can be a prohibitively expensive option for businesses operating on tight budgets.
If you’re operating on a limited budget, but still want to have your Wisconsin foreign LLC professionally registered, go with an online business service provider. There are plenty of reputable companies that can help you out with Wisconsin foreign qualifications.
We think you should foreign qualify your LLC before you begin conducting business in a new state. If you don’t, your business could be subject to a broad range of fines and penalties for operating an LLC in a jurisdiction where you don’t have permission to do so.
You’ll typically need to wait roughly five business days for the state to process your application. However, if you’re in a hurry, you can upgrade to next-day processing for just $25 more.
Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Wisconsin state law. For more information about business licenses and more in this state, check out Wisconsin’s helpful “A-Z License List.”
Yes. Whether you operate a domestic or foreign LLC in this state, you are required to file a Wisconsin LLC Annual Report.
The overall costs of operating a Wisconsin LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.
The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.
Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.
Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your Wisconsin registered agent.
The service then files your Certificate of Registration with the state to qualify your LLC to do business in Wisconsin.
Absolutely. There are quite a few reputable companies offering LLC formation service and foreign qualifications these days.
In fact, while we certainly have our opinions about which ones offer the best pricing and features, every one of the incorporation services we discuss on this website is entirely legitimate and trustworthy.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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