Connecticut and Wisconsin, two states known for their unique landscapes and distinct qualities, offer different environments for businesses looking to form a Limited Liability Company (LLC).
In this side-by-side comparison, we will examine the key factors that entrepreneurs and business owners should consider when choosing between Connecticut and Wisconsin for their LLC formation.
Connecticut vs. Wisconsin LLC
Both states have state income taxes with progressive rates, affecting both LLCs and members’ personal income.
Connecticut emphasizes finance, healthcare, and technology, while Wisconsin thrives in manufacturing and agriculture.
Connecticut generally has a higher cost of living compared to Wisconsin, impacting business operations and personal finances.
| Connecticut LLC | Wisconsin LLC |
|---|---|
| Forming a Connecticut LLC involves varying filing fees, typically ranging from $120 to $160. | Creating a Wisconsin LLC requires a filing fee of $130. |
| Connecticut LLCs are required to file an annual report, incurring a fee of $80 to maintain active status. | Wisconsin LLCs also necessitate an annual report filing, with a fee of $25 to remain compliant. |
| It imposes a franchise tax based on the annual gross revenue of the LLC. | It does not impose a franchise tax on LLCs, providing relief from this financial obligation. |
| Connecticut enforces a progressive income tax with rates ranging from 3% to 6.99%, impacting LLC members’ personal income. | Wisconsin has a graduated individual income tax, with rates ranging from 3.54 percent to 7.65 percent. |
| LLCs in Connecticut need to account for the statewide sales tax rate of 6.35% when conducting sales of goods and services. | It has a state sales tax rate of 5.00% that applies to transactions involving LLCs. |
| Connecticut LLCs must file their annual report by the end of their anniversary month each year. | Wisconsin LLCs have an annual report due date at the end of their anniversary quarter. |
| It does not have a publication requirement for LLCs. | It is also not subject to a publication requirement. |
Cost Breakdown of The Two
You may use our free LLC cost calculator by state to find out filing fees, tax percentages, income taxes, and more.
Connecticut
Formation Fees: Filing Articles of Organization costs around $120.
Annual Report Fee: An annual report fee of about $80 is required.
Franchise Tax: An annual franchise tax is based on gross assets, ranging from $250 to $250,000.
Wisconsin
Formation Fees: Filing Articles of Organization costs around $130.
Annual Report Fee: An annual report fee of about $25 is required.
Related Posts:
- Connecticut LLC: Cost Breakdown, Pros and Cons, Requirements
- Wisconsin LLC: Cost Breakdown, Pros and Cons, Requirements
Similarities Between Connecticut and Wisconsin LLC
Both states follow a similar process for forming an LLC. In both Connecticut and Wisconsin, you need to file Articles of Organization with the respective Secretary of State’s office to create an LLC.
These documents typically include basic information about the business, such as its name, registered agent, and purpose.
Both Connecticut and Wisconsin offer strong liability protection to the members (owners) of an LLC.
This means that the personal assets of members are generally protected from the business’s liabilities and debts, assuming the LLC is properly managed and maintained.
Both states require LLCs to file annual reports. These reports help keep the state’s records up-to-date and often involve paying a fee.
While the exact fees and reporting requirements may differ, the concept of regular reporting is a shared similarity.
Both states mandate that LLCs designate a registered agent, who is responsible for receiving legal and official documents on behalf of the LLC.
This requirement helps ensure that there is a reliable point of contact for legal matters.
Both Connecticut and Wisconsin allow LLCs to choose between member-managed and manager-managed structures.
This flexibility means that businesses can decide how they want the company to be managed based on their specific needs and preferences.
While not required by law, both states recommend creating an operating agreement for your LLC.
This document outlines the internal workings of the LLC, including ownership percentages, management roles, and other important aspects.
Both Connecticut and Wisconsin offer online filing options for LLC formation and annual reporting, making the administrative process more convenient and accessible.
Additional Resources:
Steps to Form LLC in Connecticut
Choose an available name for your LLC.
File Articles of Organization with required details.
Designate a registered agent for legal matters.
Pay the filing fee, which is around $120.
Consider creating an Operating Agreement for internal rules.
Obtain an Employer Identification Number (EIN) from the IRS.
Register for state taxes if needed.
File an Initial Report within 30 days of formation.
Fulfill ongoing requirements and tax responsibilities.
Steps to Form LLC in Wisconsin
Select an available name for your LLC.
File Articles of Organization with necessary information.
Designate a registered agent for legal communications.
Pay the filing fee, which is around $130.
Optionally, draft an Operating Agreement for internal guidelines.
Obtain an Employer Identification Number (EIN) from the IRS.
Register for state taxes if applicable.
File an Initial Report within 90 days of formation.
Comply with ongoing obligations and tax requirements.
Feature Comparisons Between Connecticut LLC vs. Wisconsin LLC
Connecticut LLC
Taxation: Subject to a state income tax with rates reaching up to 6.99%, impacting both LLCs and members’ personal income.
Formation Fees: Moderate filing fees for LLC creation.
Annual Report: Required with associated fee.
Franchise Tax: Annual tax based on gross assets.
Business Environment: Diverse economy with strengths in finance, healthcare, and technology sectors.
Wisconsin LLC
Taxation: Also subject to a state income tax with progressive rates affecting both LLCs and members’ personal income.
Formation Fees: Moderate filing fees for LLC formation.
Annual Report: Required with associated fee.
Franchise Tax: No franchise tax.
Business Environment: Known for manufacturing, agriculture, and a mix of industries.
Business Environment
Connecticut LLC
Connecticut boasts a diverse economy with strengths in finance, healthcare, and technology sectors.
The state’s location near major metropolitan areas like New York City and Boston provides access to substantial markets and opportunities.
Connecticut benefits from a well-educated workforce, contributing to innovation and productivity.
Research institutions and universities foster innovation and collaboration among businesses.
Established networks and organizations offer support to startups and established businesses.
Wisconsin LLC
Wisconsin has a rich history of manufacturing, making it attractive for industrial and production-oriented businesses.
The state’s agricultural sector offers opportunities for agribusinesses and related industries.
Wisconsin’s universities contribute to innovation, particularly in sectors like healthcare and technology.
A lower cost of living compared to many other states can be advantageous for both businesses and residents.
Wisconsin has programs and organizations that support startups and small businesses.
Read Also:
- 30 Best Business Ideas in Connecticut
- 31 Best Business Ideas in Wisconsin
- Best States to Form LLC For Real Estate: The Ultimate Guide
Connecticut vs. Wisconsin Taxes
Connecticut Taxes
State Income Tax: Connecticut has a progressive state income tax with rates ranging up to 6.99%.
Sales Tax: The state imposes a 6.35% sales tax on most goods and services.
Corporate Business Tax: Connecticut levies a corporation business tax on corporate income, with rates varying based on income levels.
Franchise Tax: Connecticut LLCs are subject to an annual franchise tax based on the company’s gross assets.
Property Tax: Property taxes in Connecticut vary by municipality and can be relatively high compared to national averages.
Wisconsin Taxes
State Income Tax: Wisconsin also has a progressive state income tax with rates ranging up to 7.65%.
Sales Tax: The state imposes a 5% state sales tax on most retail transactions.
Corporate Business Tax: Wisconsin has a corporate income tax for C corporations, and S corporations are subject to a franchise or income tax.
Property Tax: Property taxes in Wisconsin vary by location and can have a significant impact on the overall tax burden.
Flexibility in Rules and Regulations
Connecticut
Management Flexibility: Connecticut allows LLCs to choose between member-managed and manager-managed structures, providing flexibility in how the company is operated.
Liability Protection: Connecticut provides strong liability protection to members’ personal assets, safeguarding them from business debts and liabilities.
Business Diversity: The state’s economy is diverse, providing opportunities across various industries.
Wisconsin
Management Flexibility: Similar to Connecticut, Wisconsin also permits LLCs to choose between member-managed and manager-managed structures.
Liability Protection: Wisconsin offers liability protection for members’ personal assets, ensuring separation between business and personal finances.
Economic Opportunities: Wisconsin’s diverse economy accommodates industries like manufacturing, agriculture, and technology.
Key Differences Between Connecticut and Wisconsin- An Overview
