General Business Information
Q: What are the legal forms of business?
Sole proprietorship, Partnerships, Limited Liability Corporations, S-Corporations and C-Corporations. With each legal structure, there are tax advantages and disadvantages. It is important to seek the advice of an accountant or an attorney for detailed tax information.
Q: What is the advantage of a sole proprietorship?
A Sole Proprietorship is owned and operated by one person. Obtaining the required licenses and permits establishes the business. If the name of the business is different from the person’s name, it is called a DBA or “Doing Business As”. For example: If John Doe owns a business called EAT HERE, the business is legally identified as John Doe DBA EAT HERE. Wisconsin Statutes do not require registration for a sole proprietorship. You may voluntarily register with the County Registrar of Deeds and the Wisconsin Department of Financial Institutions 608/261-9555
Q: Is there more than one type of partnership?
Yes! A General Partnership is owned and operate by two or more persons. Drafting a partnership agreement is highly recommended. The agreement can include provisions for the business to continue after the death or withdrawal of a partner. Otherwise, the business ends. If there is no legal partnership agreement, the partnership is regulated by state statutes under the Uniform Partnership Act.
A Limited Partnership must have at least one general and one limited partner. Popular in the 1980’s. Rarely used today. It is formed by filing a Certificate of Limited Partnership with the Wisconsin Department of Financial Institutions, 608/261-9555, Wisconsin Limited Partnership Act .
Q: What is the most common business entity?
Limited Liability Company (LLC) is the most used business entity in Wisconsin. It can be formed by one or more members. An LLC separates personal and business assets. The owners must file Articles of Organization and register the business with the Wisconsin Department of Financial Institutions, 608/261-9555.
Q: What is the difference between and S Corp and a C Corp?
Subchapter S-Corporation is legally a corporation but is taxed like a partnership. The business must file, and have approved, Articles of Incorporation and register with the Wisconsin Department of Financial Institutions, 608/261-9555
C-Corporation can be formed by one or more persons and is the most formal and complex business structure. Ownership is restricted to those owning stock. It is regulated by State Statutes, Chapter 180 Business Corporations. The business must file, and have approved, Articles of Incorporation and register with the Wisconsin Department of Financial Institutions, 608/261-9555. The business name must be different from any other national or foreign company.
Q: What is a B Corporation?
B Corp is to business what Fair Trade certification is to coffee or USDA Organic certification is to milk. B Corps are for-profit companies certified by the nonprofit B Lab to meet rigorous standards of social and environmental performance, accountability, and transparency. Today, there is a growing community of more than 2,100 Certified B Corps from 50 countries and over 130 industries working together toward 1 unifying goal: to redefine success in business.
Q: Is there any free assistance with forming my legal entity?
The Wisconsin Department of Financial Institutions has a lot of great information on their website. The UW Law & Entrepreneurship Clinic offers free assistance with entity formation.
Q: Where do I go to file my corporation?
The Wisconsin Department of Financial Institutions, 608-261-9555.
Q: Are there any grants for starting a business?
In general, No. There are rarely funds available for starting a for-profit retail, service or manufacturing business. Sometimes there are industry specific monies available to spur innovation. In addition there may be government funds (usually in the form of a match) for revitalization or economic development. In general however, there are not funds for start-up.
Q: What do I need to do to get a loan for a business?
See Check List for SBA Guaranteed loan
See Financing through Commercial Banks
Q: What does private equity mean?
Private equity is simply shares in a company that are not listed on the stock market. This term has also been used to describe the broader group of firms that are operating as private equity owners of companies.
Q: What is the difference between an Angel Investor and Venture Capital?
Both Angel Investors and Venture Capitalists will hold private equity from having made investments directly into private companies. However Business Angel Investors will be individuals who are investing their own personal funds into a business opportunity. Whereas Venture Capital is invested by firms or companies that use other people’s money. They raise that money by offering investors a chance to take part in a fund that is then used to buy shares in a private company.
Q: Do I Have To Write a Business Plan?
If you are seeking financing then you will need to write a business plan. You may also want to write a business plan even if you don’t need funding. Plans serve as a roadmap for your business.
See Preparing a Business Plan
Q: Are there classes to help with Business Planning?
The BizSmart Training for Entrepreneurs Class includes an overview of the business areas crucial to planning and running your business. The class is designed to help you apply learnings to a business plan that you can use as a roadmap for your business. This program is meant for entrepreneurs who are just starting out, need a refresher of the business basics or need to update or write a business plan. The Entrepreneurial Training Program (ETP) is a more intensive business planning training program that is a comprehensive combination of coursework, business plan development and optional individual consulting. ETP participants are required to write and submit a business plan on a timely basis and are eligible to receive grant funding to help cover program costs.
Q: How do I know who my customer will be?
When starting a business it’s vital to understand who your customer will be. This takes careful research.
See Free Sources of Market Data
Q: Do I need insurance for my business?
See Consumer’s Guide to Insurance for Small Business
Q: What is Intellectual property? (copywrite, trademark, patents etc.)
See Introduction to Intellectual Property for Small Business
Q: What do I need to do when hiring an employee?
See Hiring Employees
Q: What’s the difference between an employee and a contractor?
Independent contractor definition Wisc. Stats.
Q: I need help making a prototype where can I go?
Contact the UW-Stout Discovery Center
Q: How do I reserve a web address (URL) for my business?
There are many sites you can reserve a web address for your business. Godaddy.com is an example of one such site. Many webhosting sites also allow you to reserve your URL.
Q: How will I know what expenses are associated with my business?
Research the industry to determine common expenses. It is also a good idea to check with an accountant or take a financial management class to make sure you know which expenses are allowable for your business.
Q: How can I tell if I have a good business idea?
Test it out by taking the online First Steps class
Q: Who do I need to talk to about leasing space?
A commercial real estate agent or the owner of the building. Commercial leases are much more complicated than a residential lease so it is a good idea to have an attorney help you with the terms of the lease.