State of Wisconsin DEPARTMENT OF FINANCIAL INSTITUTIONS Division of Corporate & Consumer Services

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1 State of Wisconsin DEPARTMENT OF FINANCIAL INSTITUTIONS Division of Corporate & Consumer Services Available Types of Business Entities The Department of Financial Institutions ( DFI ) is the filing office for creating a Wisconsin Corporation (Ch. 180, Wis. Stats.) Business Service (Regulated professional occupations) Statutory Close Investment companies Limited Partnership (Ch Wis. Stats.) Limited Liability Company (Ch. 183, Wis. Stats.) Limited Liability Partnership (Ch. 178, Wis. Stats.) Cooperative Association (Ch. 185, Wis. Stats.) Common Law Trust (Ch. 226, Wis. Stats.) or for licensing an existing foreign (out-of-state) entity to transact business in Wisconsin. The person or persons forming the business have the responsibility of selecting the type of entity to use. The department cannot offer legal advice; accordingly, you may want to consider consulting your own legal advisor in making this decision. It is not mandatory to engage an attorney to prepare and submit your organizational instrument for filing. Our examination of your organizational instrument is limited to determining the availability of the name selected for the entity and in ascertaining that the document sets forth the minimum information and satisfies the general filing requirements of the particular statutory chapter under which it is formed. Generally, an entity created under one chapter of law is not readily convertible to a type organized under a different chapter. Changing from one type of entity to another will entail filing fees and may have significant tax or other legal implications. Page 1 of 9 Pages

2 General Characteristics of the Several Types of Entities A business corporation is a general-purpose entity in which management is exercised by a board of directors elected by the shareholders. A service corporation is a special-purpose type of business corporation for shareholders who are all licensed, registered, or certified to engage in the same professional occupation. A statutory close corporation is a general purpose business corporation or service corporation, but one in which the shareholders agree to limitations on the transferability of shares, may elect to operate without a board of directors, and may impose greater voting or quorum requirements. The number of shareholders is limited to 50 or less at the time it elects statutory close status. Investment companies are those that specify that they are organized as a management investment company under 15 USC 80a to 80a-64. These mutual fund companies pay a substantial one-time filing fee ($12,500) for authority to issue an indefinite number of shares. A limited partnership has one or more general partners and one or more limited partners. Management is exercised by the general partners, with the limited partners as passive investors. A limited liability company has members (similar to a partnership) who may directly manage the company or who may vest management in one or more managers. It combines features of both a partnership and a corporation. A limited liability partnership is a general partnership that has filed a registration statement declaring itself a limited liability partnership. A cooperative association is formed on a membership basis with no capital stock, or on a membership basis with capital stock. Five or more adults, one of whom must be a resident of Wisconsin, may organize a cooperative. A common law trust is organized by creating a Declaration of Trust. The trust may sell beneficial or participating certificates to investors. In order to have authority to conduct business in Wisconsin, it must file an application with the department, accompanied by an original or certified copy of its Declaration of Trust. Page 2 of 9 Pages

3 The following types of business organization are not filed with the Department of Financial Institutions. Other public record custodians, such as the county Register of Deeds, may accept a notice or statement for record under the provisions of sections and of the Wisconsin Statutes. A general partnership is an association of 2 or more persons to carry on as coowners a business for profit. It may operate under a partnership agreement, customarily prepared in consultation with a legal advisor. The agreement may be recorded with the county Register of Deeds, but is not required to be. General partnerships are not filed with the department. A business conducted by a sole proprietor has no existence apart from its owner. They are not filed with the department. A sole proprietor may elect to file a statement with respect to its use of a business name with the county Register of Deeds, or may file a tradename with the Secretary of State. Those listed above are not the only types of entities available, nor should the characteristics mentioned above be construed as all-inclusive. Forms Common use forms are available on the Internet, at the department s website. (Website address: Click on Corporations, next on Forms and scroll down to the desired form. If you do not have Internet access or cannot find or identify the form you need, contact DFI, Div. Of Corporate & Consumer Services, ATTN: Corporation Section: By phone: (608) TDY (608) By FAX: (608) By mail: P O Box 7846, Madison WI, Office location: 345 W. Washington Av, 3 rd Flr, Madison WI, The forms published by the department include instructions for completing the form, filing fees, and filing procedures. You may also want to research the statutory chapter of law under which the entity is being created, as our published forms do not outline or comment on every option available under law. Page 3 of 9 Pages

4 Filing Procedures Filing procedures differ, depending on the chapter of law under which the entity is being created. Refer to the instructions on the form. Generally, Prepare and submit the document in duplicate, completing all items in accordance with the instructions. Have the appropriate individual sign the document. Remit the filing fee with the document, making the remittance payable to Department of Financial Institutions. (Visa or MasterCard accepted) Send the document and fee to Department of Financial Institutions, P. O. Box 7648, Madison WI, (If sent via courier or US express mail, address to 345 W. Washington Av., Madison WI, Firms maintaining a funded draw account with the department, or individuals paying a fee by credit card, may convey Chapter 178, 180, 181 and 183 documents to the department via FAX for filing. Limited partnership (Ch. 179) and cooperative association (Ch. 185) documents are not acceptable for FAX transmission due to signature requirements set by statute. Expedited service is available for any document filing or service function performed by the Corporation Section. The fee for this service is $25, in addition to whatever other filing or service fees may apply to the transaction. Subject to unforeseen circumstances, expedited service transactions are completed by the close of the business day following the day on which we receive them. (NOTE: Ordinary, i.e., non-expedited, turnaround time is approximately five working days, or more, depending on the type of document and the volume of work in process.) Flag your document or service request conspicuously For Expedited Service and remit the additional fee. Determining Availability of a Company Name At the time your organizational instrument is received for filing, the Corporation Section will search its records to determine the availability of the name you have selected. The name must be distinguishable from the names of other existing entities on file with the department. You may, before submitting your instrument, survey CRIS (Corporate Registration and Information System) on the DFI website Page 4 of 9 Pages

5 to see the entities already in existence, or call the Corporation Section at (608) and ask that a name be searched for availability. Searches performed on CRIS or provided in response to a verbal enquiry cannot reach the entire name file due to the indeterminate status of work in process. Accordingly, no reliance should be placed on the results of an availability search conducted on CRIS or by phone. NOTE: Entrepreneurs have several ways to designate use of a business name in Wisconsin. Filing an organizational document with the Department of Financial Institutions establishes the name on its records. Other methods, such as trade name or sole proprietorship may involve optional registration or no filing at all. Therefore, the department does not have record of all business names in use and the departments acceptance of your name does not provide absolute protection of a name against claims by persons who can establish prior rights to use of an identical or similar name. In choosing the name of your entity, it is suggested that you apply to reserve the name beforehand and that you also review trade publications, telephone books, business directories and other resources that may show business names used by enterprises similar to your own. Reserving a Company Name in Advance You may (but are not required to) apply to reserve a company name in advance of submitting your organizational instrument. Use Form 1, available for downloading from our website. Submit the application by mail or FAX, and remit the filing fee indicated on the application by check, Visa or MasterCard. You may also submit an application verbally, by phone, or by FAX to Applications placed by phone or FAX receive expedited attention, but are subject to a special, non-refundable service charge. Continuing Requirements Business corporations, limited liability companies, limited partnerships and limited liability partnerships must continually maintain a registered office and agent within Wisconsin. The initial designated office and agent are set forth in the organizational instrument and the entity is obliged to file a written change statement with the department when it desires to change either the registered agent or the registered office address. The registered office is the address used for service of process and for the receipt of other official communications directed to the entity (including its annual report form), so it is important to keep current information on file with the department. Page 5 of 9 Pages

6 Some entities are obliged to file an annual report with the department. Report forms are automatically distributed during the calendar quarter in which the report is due for filing, and are addressed to the corporation, c/o its registered agent and office. The due date for the report is the last day of the calendar quarter within which the anniversary date of the entity s date of incorporation, registration, or organization with the department. For example, the due date for the report of an entity incorporated February 15, is March 31; for an entity incorporated December 2, the due date for the report is December 31. Failure to continuously maintain a registered agent and office within Wisconsin or file the annual report may establish grounds for administrative dissolution of the entity. After filing its organizational instrument, the entity may expect to receive solicitations for information from other state agencies, such as the Wisconsin Department of Revenue and the Department of Workforce Development. Documenting the Existence of Your Entity Your entity may, in the conduct of its business, need to document its existence or to verify certain information on record with respect to it. Loan applications, licensing requirements, and property transfers are typical situations that may call for a certificate of status. A certificate of status, issued by the Department of Financial Institutions, is commonly used to document the existence and status of an entity. These certificates are variously referred to as certificate of existence or certificate of good standing and are available for nominal sum. See the department s website for a description of the types of certificates available and the fees. Click on Corporations, and next on Certificates of Status and Certified Copywork. Commonly Asked Questions Q. My bank wants to know my corporation number before they will open an account for my company. Where do I get that number? A. DFI assigns a unique file number to an entity when its organizational instrument is filed. The department applies this number to the lower right hand corner of the organizational instrument at the time it is filed. The Page 6 of 9 Pages

7 acknowledgment copy returned to you has this number on it. This file number is not the same as the entity s employer identification number. The entity must independently apply to IRS for issuance of an employer identification number. Q. What is the function of a registered agent and why must I have one? A. The registered agent is the person designated by the entity to receive official communications on its behalf, such as annual report forms and service of process. Because service of process may involve in-person delivery of a notice or document to a physical location (the registered office), the registered agent must reside in Wisconsin and the address of the registered office must describe its location, i.e., street number, street name, city (in Wisconsin) and ZIP code. (Note: Although private mail boxes have a street address, they are not suitable as the registered office for an entity because the registered agent may not be found at that address.) It is important to keep the current designation of registered agent and office currently on file with the department, as significant consequences could arise for failure to receive and act on important papers sent to the corporation s registered agent. Failure to maintain a registered agent and office in Wisconsin may establish grounds for administrative dissolution of the entity. Q. Although you approved my company name for use, another company with a similar name says it has prior rights to the name and is threatening legal action if I continue to use my company name. I thought my company name was protected by filing with your department. Can someone now challenge my use of the name? A. The department must accept the name you propose to use unless there is another entity on its records whose name is indistinguishable from the name you want to use. Indistinguishable means that we would be unable to differentiate the name of one entity from that of another on our records. We cannot deny use of a name only because it is similar or because of the competition for use of a name. The adjustment of name conflicts is a matter to be resolved by the entities involved. Q. Our company plans to expand its operations into other states. Is there any permission we have to obtain to do so? Page 7 of 9 Pages

8 A. The states in which you are not incorporated consider you a foreign corporation and may require that you obtain a certificate of authority to transact business in that state, although not all activities constitute transacting business. It is suggested that you contact the other states to see if you need a certificate of authority and learn how to apply. Q. I filed a Declaration of Inactivity with the Department of Revenue, but you are still sending me annual report forms. My entity is inactive. A. The law under which your entity is formed requires that you file a report annually with the Department of Financial Institutions, so long as the entity is in existence. The declaration of inactivity filed with the Department of Revenue does not relieve the entity of its report obligation with this department. An entity accumulates annual report fees until it is dissolved at its own initiative or is administratively dissolved. Q. I do not want to incorporate, but I want to register my company name. Where can I register my company name? A. You may file a statement with the county Register of Deeds under sec of the Wisconsin Statutes or file a trade name registration with the Secretary of State. Contact your local Register of Deeds for further information. Forms for trade name registration are available from Secretary of State, P O Box 7848, Madison WI, 53707, phone Generally, registering a name does not establish exclusive rights to use of a name or preclude others from registering the same or a similar name. Q. I would like to do some research on my own on what is involved in starting a business. Do you have any materials available? A. The department has available, for free distribution, forms for creating the several types of entities filed with the department. The forms have instructions on how to complete them, but you need to look to other sources for in-depth information on what is involved in starting a business. In addition to published materials generally available through public libraries, the following sources are suggested: Page 8 of 9 Pages

9 UW-Extension, Small Business Forum 432 Lake St., Room 425 Madison WI, (Phone ) UW-School of Business Small Business Development Center 975 University Av., Room 3260 Madison WI, (Phone ) Department of Commerce Bureau of Small Business & Permit Assistance 123 W. Washington Av. Madison WI, (Phone 800 HELP BUS) Page 9 of 9 Pages AVAILABLE TYPES OF BUSINESS ENTITIES (11-00)