Can I Register My Home-Based Business in Wisconsin As An LLC?

There are many ideas that would come to mind when you are thinking of a potential business venture. Some would involve selling products, while some would focus on offering a specific type of service. However, with the recent events involving a global pandemic, many were forced to stay at home and work at home.

Lockdowns are mandated in many states including Wisconsin which is why home-based business is one of the trending options nowadays. Although easier said than done, even home-based businesses need to undergo proper business registration which involves the LLC cost, filing of applications, obtaining permits, and many more.

However, the biggest question is if you can register a home-based business in Wisconsin as an LLC? If you are curious to know the answer, you can read through this article.

Registering a Home Based Business as an LLC

If you want a short answer to this question, then that would be a yes! It is possible and doable to register a home-based business as an LLC in Wisconsin. However, you need to be aware of the legal considerations before starting your home-based business.

1. Legal structure

For home-based businesses, the most popular type of business structure is an LLC or Limited Liability Company. An LLC in Wisconsin is created by filing the Articles of Organization with the state’s Department of Financial Institutions. Keep in mind that there will be corresponding fees. The minimum Wisconsin LLC cost is approximately $180, depending on how you filed your Articles of Organization and if you reserved your desired business name.

2. Governing documents

Even if it’s a home-based business, you need to accomplish the governing documents required by the state. The absence of these governing documents may prevent your business from getting a loan, or protecting its owners from personal liability.

3. Financing

New business owners have a tendency to underestimate the expenses and capital involved in setting up a business. Be sure to have a healthy banking relationship before starting your business. This will help you in terms of getting your business funded.

Alternatively, you also need to be aware of other ways to raise funds such as applying for grants, corporate loans, crowd funding, and seeking investors.

4. Licenses and permits

Before you can start your home-based business, it would be helpful to check permit requirements and associated fees that you need to accomplish. The common permits that are required in Wisconsin include withholding permits and seller’s permits.

5. Zoning

Even if it is a home-based business, it is strongly recommended for you to check for zoning codes and deed restrictions within your locality. There are zoning codes that require a conditional use permit from the local zoning board before your business can operate.

6. Taxes

The common tax question for home-based business owners has to do with the deduction for the business use of a home. Before the 2017 Tax Cuts and Jobs Act became effective, home-based businesses were allowed to deduct unreimbursed work-related expenses that exceeded 2% of their adjusted gross income on their tax return.

At present, employees who work at home are no longer allowed to deduct their out-of-pocket expenses. To further understand the effects of the 2017 Tax Cuts and Jobs Act on home-based businesses, it would be more helpful to consult a tax lawyer.

Registering your home-based business as an LLC is very beneficial for you as a business owner. This will ensure the legality of your business that could result in gaining trust from your customers. In addition, starting your home-based business will not leave you bankrupt as your personal assets are separated from your business.