Header graphic for print
Wisconsin Business Law Blog Providing in-depth discussions, thought, creative, and innovative insights on Business Law innovative insights

Category Archives: Business Formation

Subscribe to Business Formation RSS Feed

Corporation vs. LLC: Which Should You Choose?

Posted in Business Formation, Buying, Owning and Selling a Business, Operating a Business, Tax

If you’ve decided to create a startup business, one of the many decisions you face is the choice of what type of limited liability entity to form. In Wisconsin, the most typical choices are either the Limited Liability Company (“LLC”) or corporation. I frequently have people ask me whether I can help them set up an LLC for their… Continue Reading

Fifth Circuit Rules that a C-Corporation’s S-Corp Affiliate’s Rents Cannot be Classified as Passive Income (Section 469)

Posted in Business Formation, News and Recent Decisions, Operating a Business, Real Estate, Tax

A Federal Appeals Court ruled earlier this month that an S-Corporation’s rental income from a lease agreement with a C-Corporation with entirely common ownership with the S-Corp, could not be classified as passive activity income, and therefore could not offset the individual’s passive activity losses. Internal Revenue Code section 469 was passed in the 1980s… Continue Reading

Dropbox Passwords Hacked

Posted in Business Formation, Business Litigation, Buying, Owning and Selling a Business, News and Recent Decisions, Operating a Business, Other Legal Issues, Technology Related Topics

We learned this morning about another data breach, this time relating to the widely used Cloud Service called Dropbox. Steve Kovach, of BusinessInsider.com reported yesterday that over 7 million Dropbox passwords have been compromised. After the Target, Home Depot and other recent breaches, this isn’t a big surprise. However, since many lawyers use dropbox to share… Continue Reading

Can I Crowdfund in Wisconsin Yet?

Posted in Business Formation, Operating a Business, Technology Related Topics

Wisconsin’s equity crowdfunding law, which was unanimously passed by the legislature and signed by Gov. Walker last November, officially took effect on June 1, 2014.  Wisconsin is one of 11 states that has “taken matters into its own hands” by passing its own crowdfunding laws while the federal rules are still pending. President Obama signed… Continue Reading

Easier Tax-Exempt Status: New IRS Form 1023-EZ

Posted in Business Formation, Operating a Business, Other Legal Issues, Tax

Good news for those of you starting new exempt organizations: the IRS just released a new form, called the 1023-EZ, which will make applying for tax-exempt status for some smaller organizations much easier.  The new form is only three pages long, compared to the lengthy 26 page standard 1023 form.  The simplified form will substantially… Continue Reading

Use of LLC Profit Interests

Posted in Business Formation

The owners in many new business ventures bring different assets to the table. Often one partner may have significant cash and another has certain skills that are essential for the success of the new venture. In these situations, it is important to consider tax issues when granting the service provider with an owneship interest in the… Continue Reading

What are the basic out of pocket costs to Register an LLC in Wisconsin?

Posted in Business Formation, Buying, Owning and Selling a Business

  If you exclude attorneys fees for services (such as preparing an operating agreement and determining what additional filings, permits, etc. that the business will need to get up and running), the most basic cost to register or “organize” an LLC currently in Wisconsin online is $130.00 paid to the Wisconsin Department of Financial Institutions, which… Continue Reading

Beware of “Capital Calls” in LLC Operating Agreements

Posted in Business Formation, Buying, Owning and Selling a Business

One item often overlooked by parties while negotiating or deciding to enter into an Operating Agreement for a limited liability company or (“LLC”) with more than one member is what is often times referred to as a “capital call.” Buried deep in what can be voluminous pages of “legalese” contained in many LLC operating agreements, may lurk a… Continue Reading

A Reminder to Make Your Buy/Sell Agreement Clear

Posted in Business Formation, Business Litigation, Buying, Owning and Selling a Business, News and Recent Decisions

A recent Wisconsin Supreme Court opinion filed June 25, 2010, Ehlinger v. Hauser and Evald Moulding, Inc., 2010 WI 54, is a candid reminder that co-owners of a business should not only take the important step of entering into a written Buy/Sell Agreement to determine how important issues such as death, disability, divorce, bankruptcy, etc…. Continue Reading

Wisconsin Makes Covenants More Employer Friendly

Posted in Business Formation, Business Litigation, News and Recent Decisions, Noncompete Agreements

  For over 50 years, Wisconsin has been deciding cases related to covenants not to compete in working relationships under Wisconsin Stat. § 103.465. On July 14, 2009, in an opinion authored by Justice Michael J. Gableman, Wisconsin’s Supreme Court changed the way that statute will work, much to the benefit of employers. Here’s what… Continue Reading

Impact of Proposed Changes in Condemnation Law on Owners of Business Property

Posted in Business Formation, Business Litigation, Operating a Business, Real Estate

The 2009 Wisconsin Budget Bill contains proposed changes in condemnation law which may substantially impact on the ability of business property owners to successfully challenge condemnation or contest the amount of compensation awarded. The Wisconsin Department of Transportation is sponsoring the proposed modifications.  Currently, an owner of land subject to condemnation may recover attorneys fees incurred… Continue Reading

Interplay Between Tradename, Noncompete Agreements and Tort Law

Posted in Business Formation, Business Litigation, Operating a Business

In D.L. Anderson’s Lakeside Leisure Co. v. Anderson, 2008 WI 126 (filed 2 Dec. 2008) the Wisconsin Supreme Court addressed the interplay between tradenames, noncompete agreeements, and tort law. Anderson involved an asset purchase agreement whereby Seller agreed to sell certain assets, including seller’s tradename, to buyer and seller agreed to a noncompete agreement with… Continue Reading