Benefits of forming Wyoming LLC
08 April, 2020
Planning to open an LLC in Wyoming? Well then, you are making a great choice. Wyoming is the first state in the USA that recognized the limited liability company as a permitted entity form in 1977. And since then, this company type has become one of the best ones for many businessmen around the state and country due to the multiple Wyoming LLC benefits.
Wyoming has kept updating the laws since then a lot of times so that it can stay current with the latest innovations in structure and liability protections for its members and managers of these companies. Additionally, Wyoming also offers a favorable legal environment for the businesses established in the state. This article will help you understand why opening an LLC in Wyoming is the best choice.
What is an LLC?
Before we can talk about the Wyoming LLC benefits, let us understand what an LLC is. In many ways, an LLC is a filing status that splits the difference between a corporation and a sole proprietorship. And even though it is this way, an LLC can be either of these two things as well, which mostly depends on the jurisdiction it is filed in.
An LLC gets a liability shield just like a corporation where those who are seeking damages against it are limited to what the company directly owns instead of having access to the assets of the owners. But unlike the corporation, an LLC gets to use "pass-through" taxation where the profits from the business are considered as income on the tax returns of the owners. With this, the double taxation issue is avoided in which the company owes taxes on the profits and then the owners owe taxes on the shares they get from the company.
Why start a business in Wyoming?
As mentioned earlier as well, there are a lot of Wyoming LLC benefits that have attracted many entrepreneurs to start their business here. The very first benefit that Wyoming LLC offers is the protection of the limited liability to what assets the company owns while also permitting its profits to be taxed just like a sole proprietorship.
And since Wyoming is the birthplace of the LLC, it offers a business-friendly tax system which makes it a great home for any company, especially an LLC. the other advantages include:
- Number of owners is unlimited
- Ability to build credit and raise capital
- Perpetual life
- No citizenship requirements
- Best asset protection laws
- Members nor Managers are not listed with the state
- Asset protection and limited liability
- No state taxes
- Transferability of ownership
- Recognition of Series and Nonprofit LLCs
- Lower startup costs- with Registered Agents of Wyoming LLC, the cost of forming an LLC is affordable.
- Limited Fiduciary Duties and Anonymity
Wyoming LLC benefits
Below shared are the detailed explanation of the various Wyoming LLC benefits:
No state taxes (no income taxes and lower fees) - Wyoming does not have any state taxes on the LLC since it does not levy any corporate or individual income taxes. But it should be noted that if your LLC has operations in other states, the income tax is generated as per those states. In addition to this, you will pay a low fee to maintain the company as compared to the fees in other stares.
Recognition of nonprofit and series LLCs - Wyoming is one of the states that allows series LLCs. The series LLCs is an LLC that has the capability to issue different series or classes of membership interests that each have separate liabilities and assets associated with them. And the assets and liabilities are protected and segregated from those of the other series of membership interests.
Basically, a series can liquidate its assets while leaving the rest of the businesses intact. This kind of business structure is used in the real estate industry. And just like this, Wyoming also allows nonprofit entities to organize as LLC instead of corporations.
Protections from creditors and corporate veil piercing - Another one of the Wyoming LLC benefits is that the Wyoming law strictly limits the remedies of a creditor to a "charging order" against the member's interest. This means that when the order is in place, the member's distributions have to be paid to the creditor directly.
In short, Wyoming law limits the ability of an LLC's creditors such as the employees, landlords, and lenders to hold a member (owner) of the company personally liable for the debts in a business. This is also called the piercing of the corporate veil. So, no member is liable for the obligations and debts of the LLC and have their personal assets protected.
But if you are not able to keep your business and personal expenses separately, the corporate veil will be torn and your personal assets would no more be protected. Also, if you do a fraud through your LLC, you can be liable to pay all the debts through your personal assets, that is if the person is able to prove that you have done a fraud.
No citizenship requirements - You do not have to be a USA citizen to form an LLC in Wyoming. In fact, you can live anywhere and operate the LLC from there after you have formed it in Wyoming. But in order to gain credibility and open the business, you will need a registered agent in Wyoming, a Wyoming address and the Mail Forwarding service. Just so you know, IncParadise offers all these services.
Privacy allowed - A Wyoming LLC owner enjoys unparalleled security and privacy due to the following:
- There is no need to list a member or manager for the duration of the Wyoming LLC.
- Wyoming LLC ownership is not maintained on Wyoming public records.
- Disclosure and reporting obligations are minimal.
Easy to move - Another one of the Wyoming LLC benefits is that it has made it easy to move an existing LLC to Wyoming. This is something many states do not offer including Nevada.
Perpetual life - unlimited duration & Transferability of ownership - A sole proprietorship does not have a life apart from its owners and cannot be transferred to another person. On the other hand, an LLC has a life that goes on forever and can be transferred easily to another person. Basically, an LLC has its own perpetual life.
Number of owners - An LLC allows you to have just a single owner up to unlimited number of owners. (This is only if you have not elected for the S-corporation status).
Ability to build credit and raise capital - Since an LLC is a separate legal entity, it has its own tax identification number where it can build credit on, borrow money and sell equity to raise capital. As a matter of fact, most of the investors prefer investing in an LLC due to the ease of transfer of investment and the limited liability.
Low startup costs - The fees to start a company in Wyoming is very low. In fact, Wyoming state fees are 84% less than Nevada's. You will need just a max of $100 to start an LLC in Wyoming making this one of the best Wyoming LLC benefits.
How can IncParadise help you?
With all clear on why Wyoming is a great place to start your company, it is time to find help so that you can start your business even if you are a foreigner easily. By hiring us, you will have your Wyoming LLC created in no time. Wyoming LLC articles can be filed online or sent by mail to the Secretary of State. The filing fee is just USD100. IncParadise can help you open your company by acting as your registered agent, which is something you will need as well.
Below shared are the services that we offer:
- Drafting of custom NV incorporation articles for Wyoming LLC
- Filling of Wyoming LLC registration form
- Receipt of filed LLC documents within a period of 3 to 6 business days from the date of filing
The total time for processing the LLC formation normally depends on the documents and the procedure. It can table from 4 to 6 weeks. Additionally, there are two options; "expedited" or "priority" that you can choose from.
Under the Expedited/priority processing, IncParadise will ensure that the necessary documents are filed with the Wyoming Secretary of State's office overnight through dispatch service or electronically. This would help you have your LLC formed in 2 to 3 business days. But keep in mind that there are extra charges for this.
All in all, you will need the help of a registered agent to handle all for you. IncParadise can be the registered agent you need for your Wyoming LLC. This will save you a lot of time and money for opening your company. And remember, we make everything easy for you so that you can focus on running your business!
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