If you’re opening a business in Wyoming, you’ll want to think through the business structure that will work best for you since it can impact how you operate and your liability protection. The business entity you choose can depend on your type of business, but many small business owners and entrepreneurs may benefit from opening a limited liability company (LLC) in Wyoming. When you choose to become a Wyoming limited liability company, you’ll have more protections than a sole proprietorship.
In this article, learn about the pros of Wyoming LLC formation and find links that can help you through the process.
The Key Benefits of Forming an LLC in Wyoming
Here are the top 10 benefits to LLC formation, as well as using LLC formation services, in Wyoming.
1. Wyoming LLCs enjoy no state income taxes
Wyoming is considered one of the states with the most favorable taxes for businesses, which has a lot to do with the fact that it’s one of the few states that doesn’t charge personal or corporate income tax. So you won’t have to pay state LLC taxes on income. A limited liability co. in Wyoming will still have to pay federal income taxes to the IRS, however.
You must file an annual report and pay an Annual Report License tax that equals the greater of $60 or two-tenths of one mill on the dollar of your business’s Wyoming assets. Also, if you sell goods in the state of Wyoming, you’ll have to register with the Wyoming Department of Revenue and pay annual sales tax on your tax returns.
2. Wyoming LLCs provide superior asset protection and limited liability
Like all LLCS, a Wyoming limited liability company owner is protected from having their personal assets seized to make up for business debts. On the opposite side, a limited liability company’s business assets are usually not protected from personal creditors in most states — but they are in Wyoming. In other words, if an individual business owner owes a lender or other creditor money, that lender can go after the owner’s personal assets but they can’t seize income that came from the LLC. This is called charging order protection.
3. Wyoming LLCs allow privacy
In many states, your private information like your name and street address is a part of public record. Wyoming offers complete anonymity to small business owners registered in the state. You simply have to list an LLC manager to act on your behalf, which can be your registered agent.
You must use a registered agent who is a Wyoming resident — although you can act as your own. The registered agent must have a physical address or office address that is not a P.O. Box, UPS address, etc. You can use a registered agent service, which is a professional service that agrees to accept legal documents and other business notices at their mailing address during regular business days and business hours. Your chosen registered agent must sign a Consent to Appointment by Registered Agent form.
4. Wyoming LLCs offer transferability of ownership
Sole proprietorships can’t transfer ownership to another entity, but LLCs can. Business owners in either single-member LLCs or multi-member LLCs can perform an exchange of membership if they decide they no longer want to own the business.
LLCs are also either member-managed or manager-managed, which defines who manages the company. The former type of LLC means the owners manage the day-to-day operations, while an appointed manager manages the business in the latter type. A Wyoming LLC is no different.
5. Wyoming LLCs build credit and raise capital
LLCs are separate from their owners legally, so they can build a credit history and bring in capital as distinct entities. For more on how to establish business credit, check out this guide from Nav’s experts.
Also, it’s a good idea to open a bank account for your business. Check out Nav to find your best option for a business bank account quickly and easily.
6. Wyoming LLCs allow for many owners
LLCs don’t limit the number of members like sole proprietorships. You can have an unlimited number of members in your business.
Keep in mind that having more members can make operations more complicated. You may want to think about creating an operating agreement to outline the responsibilities of each of the owners in the day-to-day operations. An LLC operating agreement isn’t required in Wyoming, but it’s a good idea to have. LLC owners can benefit from having their operations outlined to improve efficiencies and handle any situation that may arise.
7. Wyoming LLCs have no citizenship requirements
The Wyoming Secretary of State allows foreign LLCs to operate within the state, so you don’t need to be a U.S. resident. The costs are the same for non-U.S. residents as they are for residents.
8. Wyoming LLCs are easy to move
When you move a business to many states, you have to start fresh. This process removes the record of your previous time in business — which is a key point that lenders look at when deciding whether or not to fund your business. This doesn’t happen under Wyoming law. You can move a business to Wyoming and keep your original employer identification number (EIN) and start date in a process called “continuance.”
You will have to fill out a certificate of authority if you’re a business from another state doing business within Wyoming. The state requires you to provide an original certificate of good standing as a foreign LLC with your application.
9. Wyoming LLCs have an unlimited duration
Typically, corporations exist for an unlimited amount of time while LLCs have a limited lifespan, usually around 20 years. But LLCs in Wyoming aren’t forced to limit their lifespan. This is called perpetual life. When you file your LLC articles of organization, you will simply not choose a date of dissolution. Specific events, like the death of the owner, trigger dissolution, however. Be sure to outline the outcomes of these events in your operating agreement.
10. Wyoming LLCs have lower startup costs
You have to pay state fees when you go through the state filing process, but the fees are lower in Wyoming than in many other states. The filing fee is $100 (online filing has an additional $2 charge) for Wyoming articles of organization. You can file LLC articles of organization through the Wyoming Secretary of State website. The state provides a useful list of the documents and information you need before you file your LLC articles of organization in Wyoming.
Each year, you’ll also have to complete an annual report to stay in good standing with the state of Wyoming.
State of Wyoming Quick Links for Business Formation
Check out these helpful links that you can refer to during the process of forming your LLC in Wyoming.
- Name search. The first step of forming a Wyoming business is deciding on a business name, company name, or doing business as (DBA) name. Make sure you check Wyoming’s name search database to see that your desired LLC name is not already taken before filing.
- Registered agents. The state provides a list of verified Wyoming registered agents.
- Cost. Look at the fee schedule to see how much it will cost you to form your Wyoming LLC.
- Sales and use tax information. If you’re looking for information on sales and use taxes, head to Wyoming’s Department of Revenue.
- Business licenses and insurance. Head to the Secretary of State website for more information on getting the licenses or insurance your business needs.
- Forms. Whether you’re looking to file articles of organization or complete an annual report, the forms are all available here.
Consider Nav your partner in your LLC formation journey. For more on starting your own LLC in general, head to this explainer article from Nav’s experts.