Small Business Formation FAQs

Learn More About the Law of Small Business Formations

Small Business Formation and Advising

Small business formation and advising, including setting up limited liability corporations, contract and lease reviews, and employee agreements.

Small Business FAQs

Q. What is an “LLC”?
A. An “LLC” is a Limited Liability Company. It is a fairly simple way to help protect you and your personal aspects from liability if a claim is made against your LLC.
Q. I have a small family run business. Do I need to be an LLC?
A. Not absolutely. Think of the LLC as a wall against lawsuits. If you never get sued, you do not need that wall. Insurance is another protection that all business should have. An LLC is one more form of protection.
Q. I filed out and filed the form on the Wisconsin Department of Financial Institutions website. Are there other forms or fees?
A. That is a good start, but most business should have an operating agreement, even if it is just for a one member LLC. If you do not have an operating agreement, you are stuck with the default provisions of the LLC statutes. There is also an annual report that needs to be filed and an annual fee paid.
Q. I made my existing business an LLC. Are there any changes I need to make in the way I do things?
A. Yes. All business paperwork, like invoices, stationery, websites and business cards should include the “LLC” or other designation that you used when you created the LLC. There are also other important changes to consider.
Q. I am confused. Should I be a member managed or manager managed LLC?
A. Simple question, but the answer is not. It depends on how the LLC will be run and by whom.
Q. Do I need a Tax Number?
A. There are a number of things that can be thought of as “Tax Numbers” these include Resale Certificates and Employer Identification Numbers (EIN). What you need depends on the type of business you are in.
Q. If I make all my employees “Independent Contractors”, can I avoid paying Unemployment Insurance and Workers Compensation Insurance?
A. That is a loaded question. An employer cannot just designate someone an “Independent Contractor”. To be an Independent Contractor there are a number of qualifications that must be met regarding how the employee does their job. If an employee is designated as an Independent Contractor and is later determined not to be one, there could be serious consequences for the business owner.
Q. By making my business an LLC, creditors can no longer collect money from me personally if the business goes under, correct?
A. That depends on a number of factors, the most important is if you personally guaranteed payment. If problems arise you may need to dissolve the LLC and file a personal bankruptcy.
Disclaimer: The answers to frequently asked questions and all information contained on this website is for general information only. Laws vary from state to state, and frequently change. Sometimes even counties have their own Local Rules. Tiny variations in facts, or information left out of a question can completely change advice and outcomes. No one should ever rely on this general information as legal advice for their situation. 
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