You’ve been thinking about starting your own business for awhile. As a professional, you know how important it is to do things right. With ZenBusiness, you’ve found a good partner! In this guide, we’ll show you the steps to start a Wisconsin professional corporation today.
Is a service corporation the right structure for you?
All businesses should consider a formal entity structure, but there are some that would do better as a corporation than other types. See the ZenBusiness entity guide to see what’s right for you.
Wisconsin refers to professional corporations (PCs) as service corporations. They are for-profit corporations established to provide a professional service. According to the state’s definition, that means a profession that needs state certification, such as accounting, architecture, dentistry, and health care.
Some states have another business entity type for professionals known as a professional limited liability company (PLLC). Wisconsin doesn’t have this option; instead, you can form a standard limited liability company (LLC). While LLCs are easier to start, they don’t offer the same type of liability protections as corporations.
At least one professional is needed to create a PC. If your organization has more than one shareholder, the other people usually need to have the same license, certificate, or registration. As a PC, there are management requirements that the shareholders and board of directors need to comply with to satisfy state and federal regulations.
Choose a name for your Wisconsin service corporation
Your corporation’s name should let people know your organization’s purpose. It can’t be too similar to any other corporate name that exists in the state’s records.
PC names can include the last name of a person or persons associated with the business. It must end with the word “Chartered,” “Limited,” or “Service Corporation,” or the abbreviation “Ltd.” or “SC.”
We know that getting the paperwork together to form your business takes time. Use ZenBusiness’s name reservation service, which checks to see if your preferred name is available and, if so, reserves it for you. A reservation can keep it on hold for 120 days so another business doesn’t snap it up. You can also complete the process through the Secretary of State if you prefer.
While you’re thinking about it, find and secure the right domain name for your PC using ZenBusiness’s domain name service. You’ll be one step ahead when it comes to creating a website where people can learn more about your business.
Select a Wisconsin registered agent
Corporations in Wisconsin are required to have a registered agent in the state. A registered agent acts as the official point of contact between your organization and the Secretary of State. Your agent also receives important legal correspondence, such as lawsuit notices.
An individual or a corporation can fulfill this role. The entity must reside in the state or be authorized to do business in the state. Although you can act as your own registered agent, it puts a lot of restrictions on your time and movement.
Registered agents need to be available Monday through Friday during normal business hours. That means no off-site coffee or lunch breaks, no meetings at a client’s or vendor’s office, and no vacations. Using the ZenBusiness registered agent service allows you to work when, where, and how you wish.
Complete your Wisconsin Articles of Incorporation
An incorporator (a person who signs the document) can file the Articles of Incorporation with the Department of Financial Institutions. Your PC needs at least one licensed professional to form your organization.
Your corporation’s Articles of Incorporation will need to include information such as:
- Your corporate name
- The number of authorized shares
- Registered office and registered agent
Filings should be mailed to the Department of Financial Institutions in Madison with a $100 check. Expedited service is available for an additional $25.
Establish corporate records
Corporate records are a permanent collection of official documents related to your business. There are specific documents that your corporate records should include, such as:
- A copy of your Articles of Incorporation
- Shareholder meeting minutes
- Board meeting minutes
- Accounting records required for your business
The records need to be in a readable format. They can be in another form, such as an electronic record, as long as it can be turned into a written format in a reasonable amount of time.
Designate a board of directors
A PC needs at least one person on the board of directors. The directors are usually licensed, certified, or registered for the same service as the PC. There are exceptions, such as for health care professionals, so you’ll want to familiarize yourself with the rules.
Create Wisconsin corporate bylaws
In Wisconsin, corporate bylaws aren’t a legal requirement. However, it’s smart to create bylaws because they set out the guidelines and rules about how the business should be managed day to day. This allows for consistency and accountability. If you’re drafting corporate bylaws, keep in mind that they’ll need to align with state laws and your organization’s Articles of Incorporation.
Hold your first board meeting
Once the Articles of Incorporation have been filed and approved, a meeting should be held by the initial board of directors. At this meeting, the board should take care of any activities required to complete the formation of the corporation. This can include:
- Electing officers
- Adopting bylaws
- Assigning a person to record minutes
Handle Wisconsin tax obligations
Your PC will need an Employer Identification Number (EIN). This number is used by the IRS as a business entity identifier. The EIN is needed when registering for licenses or permits, opening a business bank account, and filing tax returns. If you don’t have one, you can apply through the IRS or ZenBusiness.
As a service corporation in Wisconsin, you may need a Business Tax Registration. Other tax applications that your organization may require include:
- Seller’s Permit
- Consumer’s Use Tax Certificate
- Withholding Tax Number
The Department of Revenue Business Information guide is a good starting point for learning about business tax obligations. You can use the department’s tax rate look-up tool for additional information, including whether county taxes apply to your corporation. You may also consult a qualified tax professional.
Obtain Wisconsin business licenses and permits
Wisconsin doesn’t have a general business license. However, you should ensure that you have all the required licenses and permits for your business, especially at the local and industry levels. Resources include the Department of Revenue, your local government office, and the oversight group for your profession or industry. We also offer a business license report service to help you determine the requirements in your area.
Acquire insurance for your Wisconsin service corporation
Property and liability insurance are recommended for small businesses, although they aren’t required. As a PC, you’ll want to consider professional malpractice insurance specifically. Health care providers must maintain minimum malpractice coverage, and this type of insurance is valuable for other professionals who can be sued if they make an error.
Businesses in Wisconsin may also need auto insurance for commercial vehicles and workers’ compensation insurance. The latter is mandatory starting with the first one to three employees. Speak with a qualified insurance representative to ensure that your organization has all its insurance needs covered.
Open a business bank account
Banks have different requirements for opening a business account. It’s a good idea to reach out to your preferred institution to understand what documents or information you’ll need on hand. You’ll likely need a picture ID, your Articles of Incorporation, and an EIN at a minimum.
Ready to start your business?
At ZenBusiness, we are proud to support small businesses through a variety of different tools and services. Whether you need a registered agent service, want to reserve a business name, or are looking to register a domain name, our goal is to help you stay on the road to success. Check out our services and contact us today to see how we can help you grow your company.
Wisconsin Professional Corporation FAQs
What are the filing fees for a Wisconsin professional corporation?
It costs $100 to file Articles of Incorporation for a for-profit stock corporation in Wisconsin. Applications should be submitted by mail along with a check made out to the Department of Financial Institutions in Madison. There may be additional fees if you’re looking to reserve your corporate name or expedite the process. For example, it costs $25 to expedite each transaction.
Do I need a lawyer to form a Wisconsin professional corporation?
No, you don’t need a lawyer. However, you may want to seek one out to review your documents. You may find legal advice beneficial if your corporation’s structure is more complicated or if you have specific questions or concerns.
Does Wisconsin have other professional entity types?
No. Wisconsin doesn’t have other professional entity types, but professionals are allowed to form a limited liability company. For this structure, owners typically need to be members of the same profession.
Can professionals from different fields form a Wisconsin professional corporation together?
In most circumstances, professionals must be in the same field to form a Wisconsin PC. However, there are exceptions for certified public accountants where 50% of shareholders must be licensed, and for health care professionals. Check with an attorney or review Wisconsin business corporation law statutes for specifics.
Will I be taxed as an S corporation or C corporation in Wisconsin?
A PC in Wisconsin is usually considered a C corporation unless it has elected and qualified as an S corporation. To make this election with the IRS, you must have a limited number of shareholders, one class of stock, and no out-of-state or corporate shareholders.