The Wisconsin limited liability company (LLC) operating agreement is a legal document that the members use to define how the company will be operated and regulate their relationships within the company.
The LLC operating agreement, or business operating agreement, also outlines the initial contribution of each member and their share in the company’s interests based on the initial contribution.
Moreover, if the members decide to manage the company personally, the document provides their managerial rights and duties in the company.
Is an Operating Agreement Required in Wisconsin?
No, the operating agreement is not required in Wisconsin. However, many parties still choose to draft the operating agreement since the document can help optimize business operations and prevent potential disputes between the members.
4 Main Types of Operating Agreements
In Wisconsin, you have four main types of operating agreements you can choose to draft for your LLC:
Variety of Operating Agreements
Single-member LLC operating agreement: Here, the operating agreement outlines business operations in companies with only one member.
Multi-member LLC operating agreement: This type defines how the company will be operated and regulates the relationship between multiple members of the company.
Member-managed LLC operating agreement: Used when company members decide to manage the company personally.
Manager-managed LLC operating agreement: This type of operating agreement is used when company members decide to delegate the management of the company to a professional manager.
Laws and Legal Requirements for LLC Operating Agreements in Wisconsin
Chapter 183 of the Wisconsin Statutes, also called the Uniform Limited Liability Company Law, regulates the status of LLCs in Wisconsin.
Moreover, § 183.0102(13) provides a definition of the operating agreement as follows:
“‘Operating agreement’ means the agreement, whether or not referred to as an operating agreement and whether oral, implied, in a record, or in any combination thereof, of all the members of a limited liability company, including a sole member, concerning the matters described in s. 183.0105 (1). The term includes the agreement as amended or restated.”
How to Form a Limited Liability Company (LLC) in Wisconsin
Here, you can see the step-by-step process for establishing an LLC in Wisconsin:
#1. Choose a Business Name For Your LLC
The first step in this process is to name your LLC. The business name of your LLC must be distinguishable from business names used by other companies in Wisconsin.
To check if your business name is distinguishable, you should go to the Wisconsin Department of Financial Institutions website and do a business name search.
#2. Choose the Type of LLC
In Wisconsin, you can choose between two types of LLCs:
Types of LLCs
Domestic LLCs: Companies that are both established and registered in Wisconsin.
Foreign: Companies that are established outside Wisconsin but are registered in Wisconsin due to their business expansion or other reasons.
#3. Nominate an Agent
You should also choose a statutory agent who will receive important documents on behalf of the LLC. You can nominate a member of your LLC, a lawyer, or an agency as an agent.
It can be an individual with a registered address in Wisconsin or a company that can conduct business in Wisconsin.
#4. File the Registration Documents
For foreign LLCs, you should file the Certificate of Registration. Here, the parties can also submit their application online or by filling out Form 521.
#5. Pay the Required Fee
The application fee depends on the type of LLC you are forming and the way you choose to submit your application:
Mandatory Fee Depending on the Type of LLC
Online application: $130
Application via mail: $170
Online application: $100
Application via mail: $100
#6. Create your LLC Operating Agreement
After completing your registration, you should draft the operating agreement. This document doesn’t have to be registered with any state agency.
Although not required by state law, you should still consider making this document since it can optimize your business operations and decrease your business expenses.