Benefits of a corporation
One of the biggest advantages to forming a corporation is the liability protection it provides its owners. If the corporation is sued or has financial difficulties, the owners’ losses are limited to the amount they have invested in the corporation. A corporation offers numerous other benefits, including tax savings and easy transfer of ownership, which can make it more attractive to investors.
Requirements for incorporating in Wisconsin
Preparing your articles of incorporation
To form a corporation, you must file articles of incorporation with the Wisconsin Department of Financial Institutions and pay a filing fee. The corporation’s existence begins on the date you file the articles. The articles of incorporation can include numerous provisions, but they must, at a minimum, contain the following:
- Name of the corporation
- Statement that the corporation is incorporated under Chapter 180 of the Wisconsin statutes
- Stock structure
- Names and addresses of incorporators
- Registered agent name and address
In regard to stock structure, the articles of incorporation must state the total number of shares the corporation is authorized to issue. If there is more than one class or series of shares, the articles must state the number of shares in each class or series and provide a distinguishing designation for each class or series.
Before shares are issued in any class or series, the articles must state the limitations, preferences, and relative rights of that class or series. The articles must also include any provision giving the directors authority to determine the limitations, preferences or relative rights of a class or series of shares and any provision that grants or limits preemptive rights.
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Naming your corporation
Before filing articles of incorporation, you should make sure the corporate name you want is available. You can check name availability by searching the Department of Financial Institution’s records online or by calling the Department.
You can reserve a name for 120 days by submitting an application to the Department of Financial Institutions.
Your corporation’s name must meet the following conditions:
- It must include one of these words: “corporation,” “incorporated,” “company,” or “limited,” or the abbreviation “corp.,” “inc.,” “co.,” or “ltd.”
- A corporation’s name must be distinguishable from the name of any other corporation, cooperative, limited liability company, limited partnership, or limited liability partnership in the records of the Department of Financial Institutions.
Incorporators sign the articles of incorporation and file them with the Department of Financial Institutions. You must meet the following requirements when specifying incorporators:
- Incorporators must list their names and addresses in the articles of incorporation.
- A corporation must have at least one incorporator.
- An incorporator may be a person or an entity.
- If directors are not named in the articles of incorporation, the incorporators must elect them. They may also appoint officers. After the directors have been chosen, the incorporators have no additional duties.
A corporation’s board of directors is responsible for establishing the corporation’s overall goals. Directors have a duty to make prudent business decisions and place the interests of the corporation ahead of their own personal interests.
The following conditions must be met when specifying directors for your corporation:
- There may be one or more directors. There is no maximum number of directors. The articles of incorporation or bylaws should specify the number of directors the corporation will have.
- State law does not limit who can be a director, but the articles of incorporation or bylaws may set qualifications for directors.
Specifying a registered agent
A corporation must designate a registered agent to receive lawsuits and other official communications on behalf of the corporation.
You must adhere to the following requirements when specifying a registered agent for your corporation:
- The articles of incorporation must include the name of the registered agent and the street address in Wisconsin of the registered office.
- A registered agent may be a person who resides in Wisconsin or a corporation, limited partnership, limited liability company or limited liability partnership formed or authorized to do business in Wisconsin. The agent’s business address must be identical to the registered office address.
Stating a corporate purpose
Every corporation formed in Wisconsin has the purpose of engaging in any lawful business. It is not necessary to provide any additional purpose in the articles of incorporation.
Determining incorporation bylaws
Bylaws are a corporation’s internal rules. They provide important guidelines for the corporation’s directors, officers, and shareholders and may contain provisions for managing the business and regulating the affairs of the corporation.
Although bylaws are not required, the directors, incorporators, or shareholders may adopt them. Bylaws cannot conflict with the law or the articles of incorporation.
Costs of incorporating in Wisconsin
The Wisconsin Department of Financial Institutions requires a fee when filing articles of incorporation or reserving a corporation name. Corporations are also required to pay state and federal income taxes.
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