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Are you considering starting a Wyoming LLC? This state’s attractive tax policies make it a smart choice for entrepreneurs. While the process might seem daunting, especially if you’re new to business ownership, there’s no need for concern. Our straightforward guide will lead you through each step, helping you find smooth sailing while establishing a limited liability company in Wyoming.
Key takeaways
- Accessible to businesses of any size, a Wyoming LLC offers operational flexibility, tax advantages, and limited liability asset protection.
- Wyoming welcomes foreign entities to form LLCs, broadening opportunities for global entrepreneurs.
- You can simplify your LLC formation with Block Advisors Business Incorporation Service, designed to help busy entrepreneurs save time.
What is an LLC?
An LLC, or a limited liability company, is a business structure that combines the flexibility of a partnership or a sole proprietorship with limited liability protection, similar to a corporation. The owners of an LLC are referred to as “members,” and they can be individuals or business entities. Members can generally be sheltered from the company’s legal obligations, meaning their private assets may be protected.
An LLC can have one or more members. Single-member LLCs are like sole proprietorships but offer additional liability protection and tax benefits. Similarly, multi-member LLCs are like partnerships.
Besides these LLC types, you can also form the following:
- L3C: Low-profit liability companies designed for socially focused businesses.
- Series LLC: A tiered business structure comprised of multiple, mostly independent, LLCs.
- PLLC: Professional limited liability companies designed for licensed professionals like lawyers and doctors.
A Wyoming LLC is taxed as a pass-through entity by default. That means LLC members report profits on their individual tax filings. They pay the federal self-employment tax. An LLC can also be taxed as a C corporation (C Corp) or an S corporation (S Corp), but only if they meet specific criteria. Learn more about LLC taxation options.
Benefits of forming an LLC in Wyoming
Considering how many benefits an LLC offers businesses, it’s no surprise that many Wyoming business owners opt for this business structure. Here are just some of those benefits.
Simple LLC formation process
Wyoming LLC formation is a relatively straightforward process. It requires minimal paperwork and relatively low filing fees, and you can complete the entire process online. Throw in the readiness of Wyoming Secretary of State office clerks to process the formation documents as quickly as possible, and you’ll understand why Wyoming is one of the most favorable states for starting an LLC.
Low operating costs
The state of Wyoming is known (and loved) for its low fees and taxes associated with LLC formation. Business owners pay modest annual fees to maintain their LLCs. Thanks to these favorable annual requirements, a Wyoming Limited Liability Company is an excellent choice for optimizing ongoing operating LLC costs.
Adaptable ownership & management
A Wyoming LLC offers remarkable ownership and management flexibility. State guidelines allow individuals, other businesses, or even foreign entities to own them. As for management, these LLCs can either be manager-managed (specific individuals appointed to run the company) or member-managed (all members participate in decision-making). This flexibility enables business owners to tailor their WY LLC structure to meet their needs.
Limited liability protection
One of the most significant benefits of Wyoming LLCs, and indeed all LLCs, is limited liability protection. In many cases, this structure can safeguard owners from personal financial risk and liability for the business’s debts.
A welcoming environment for non-residents
Wyoming stands out as a good choice for establishing an LLC for non-residents. The state’s foreign-friendly policies remove burdens like state income tax and demanding compliance requirements, making it an appealing option for national and international entrepreneurs.
Ready to form your Wyoming LLC?
How to start a Wyoming LLC
The LLC formation process varies from state to state. Here’s a simple step-by-step guide to form your Wyoming LLC.
1. Choose your Wyoming LLC name
Choosing the right name for your Wyoming LLC is an essential first step in the formation process. It’s not just about picking a name you like; it must also comply with Wyoming’s naming guidelines. For example, you should do the following:
- Include “limited liability company,” “limited company,” or abbreviations like “LLC,” “L.L.C.,” “LC,” or “L.C.” in your name.
- Ensure your name is unique and not already in use by checking the Wyoming Secretary of State Business Entity Search tool. A name already used by another Wyoming business won’t be accepted.
- Avoid business type suffixes like “Corp,” “Inc,” or “Nonprofit” that could misrepresent your LLC.
- Steer clear of words like “bank,” “trust,” “insurance,” and “university” unless you’re authorized or licensed to use them.
- Your name should reflect your business’s nature, avoiding confusion about its purpose. In other words, don’t name your LLC “Jones Financial Trust” if you sell hot dogs.
If your name meets these criteria, you can file for an LLC immediately or reserve your desired name. The second option involves filling out the Application for Reservation of Name and paying the $60 filing fee. After approval, your name is reserved for 120 days.
While checking the business name availability, you can do the same for your trade name. A trade name (or a “Doing Business As” or DBA name) may not be required, but it can benefit those who want to operate under a distinct brand name.
2. Choose a registered agent service
Your Wyoming LLC will need to have a registered agent. A registered agent is a person or company that acts as your business’s representative, accepting legal documents and official state correspondence, particularly in legal matters such as lawsuits. For someone to be a Wyoming registered agent, they need to check a few boxes, including the following:
- Have a physical address in Wyoming.
- Maintain regular business hours.
- Quickly forward received mail.
Technically, you can be your registered agent. However, consider that you may be served legal papers in front of customers and have your personal address publicly available.
For most business owners, a strong alternative is to hire an affordable registered agent service to take care of these responsibilities. Once you choose a registered agent, you must have the agent sign a Consent to Appointment by Registered Agent. This document is filed with your other formation paperwork.
If you form your business with Block Advisors, you can appoint a third-party registered agent during the ordering process.
3. File your LLC Articles of Organization
Submitting the Wyoming Articles of Organization is the first “official” step in the business formation process for Wyoming LLC owners-to-be. This document essentially formally registers your business with the state of Wyoming. As such, your Wyoming LLC articles must contain all the essential information about your LLC, including the following:
● LLC name (compliant with the naming guidelines)
● LLC physical address (no P.O. boxes allowed)
● Business mailing address
● Phone number
● Registered agent information
● Management structure
You’ll also need proof of payment for the $100 state filing fee for residents. If you’re a nonresident, you will pay an additional $50 to get a Certificate of Authority. This document allows you to do business within the state of Wyoming.
To file Articles of Organization, you have three options — online, in person, or snail mail. Online filing involves visiting the Wyoming Business Center website and an additional convenience fee. As for filling in person or via mail, you’ll need the following address:
Wyoming Secretary of State
Herschler Building East, Suite 101
Cheyenne, WY 82002-0020
Then, it’s time to play the waiting game. Depending on the method of filing, the Wyoming Secretary of State can take up to 10-15 business days to let you know their decision. After this document is approved, your LLC is officially recognized as a legal entity.
4. Prepare an LLC operating agreement
The State of Wyoming doesn’t require you to have an operating agreement. Still, having one is strongly recommended because, typically, it includes all the details necessary for operating an LLC smoothly. Without it, you’ll have to rely on Wyoming’s default statutes to navigate significant events for your business.
An LLC operating agreement should detail all the rules, regulations, and provisions for member voting, distributing profits, transferring membership interests, navigating potential disputes, adding new LLC members, dissolving the LLC, and much more. The more detailed this document is, the better. Although an oral agreement would suffice in some situations, a written one is the safest option to avoid conflicts and misunderstandings among members.
5. Obtain an Employer Identification Number
Obtaining an Employer Identification Number (EIN) comes after you form your Wyoming LLC. This step is crucial to ensure the long-term functioning of your business. Get help obtaining an EIN for your small business when registering your company using Bock Advisors Business Incorporation Service. You can also receive this number from the Internal Revenue Service (IRS) by applying online.
The EIN is a unique nine-digit number that acts as a tax identification number for your business. It lets you handle financial transactions and open a business bank account without divulging personal information.
6. Maintain your Wyoming LLC
Once the state of Wyoming officially recognizes your LLC, you’re not finished. You’ll have ongoing responsibilities to ensure it remains in good standing. For example:
Annual Reports: Each year, by the anniversary of your LLC’s formation, you must submit an annual report to maintain your good standing with the state of Wyoming.
Annual Report License Tax: The filing fee for the annual report depends on your business assets and can be filed online for many small businesses. The Annual Report License Tax is the larger $60 or an amount based on business assets located and employed in Wyoming.
Federal and State Tax Requirements: You’ll have specific federal and state tax obligations depending on how you’ve structured your LLC (as a pass-through entity or a corporation). Be sure to understand these requirements to avoid any tax issues.
Business Licenses and Permits: Depending on your business activities, you may need additional licenses or permits. Stay informed about these requirements to ensure uninterrupted operations.
Staying on top of your obligations ensures your Wyoming LLC thrives and complies with state laws and regulations.
Streamline your Wyoming LLC formation
Navigating the intricacies of forming a Wyoming LLC can be time-consuming, especially for busy entrepreneurs. While you evaluate your options, consider your business needs and individual circumstances. Remember – laws can vary from state to state. An attorney can help you evaluate all relevant considerations.
If you’re ready to begin forming your business, Block Advisors Business Formation Incorporation Service can help. Tailored for business owners with demanding schedules, we streamline the setup, ensuring a smooth process to start forming your Wyoming LLC in as little as 10 minutes. Block Advisors guides you through each step in filing the paperwork. Save time and get peace of mind to launch your LLC.
This article is for informational purposes only and should not be construed as legal advice. You may want to seek the advice of an attorney to evaluate all relevant considerations.
About the Author
Carl Breedlove is a lead tax research analyst at the Tax Institute. He specializes in business, rental property, and state taxation. Carl is a University of Missouri-Kansas City School of Law graduate with a JD and an LLM in tax.
FAQs
Why is a Wyoming LLC the best?
No specific state is the “best” for forming an LLC. Many entrepreneurs choose to form their LLCs in their home state. This can simplify tax and other matters by only dealing with one state’s regulations. Some non-resident small business owners form a Wyoming LLC because of the state’s business-friendly environment, including no state income tax. Wyoming is also an attractive state to form an LLC in because it offers minimal annual fees and one of the lowest small business tax burdens in the U.S. You should weigh your options carefully when choosing which state to form your LLC.
What is the disadvantage of an LLC in Wyoming?
One drawback of forming your Wyoming LLC pertains to the tax benefits. You must live AND do business in the state to secure its full tax advantages. Living in another state subjects you to that state’s taxes – you won’t enjoy full income tax freedom. Additionally, if you live out of state, you will likely not enjoy the same LLC asset and ownership protection from creditors. Only in-state residents get that perk through Wyoming’s Charging Order Protection laws. Finally, Wyoming has strict annual report requirements. If you submit your Wyoming annual report late, you risk losing your LLC’s good standing.
How long does it take to form an LLC in Wyoming?
Wyoming has an efficient and straightforward business registration process. After the state receives your business’ documentation and filing fees, it generally takes no more than 15 business days to process and officially form your LLC.
Can I start an LLC in Wyoming without living there?
Yes, you can start an LLC in Wyoming without living there. Non-residents form most Wyoming LLCs. This process follows the same steps as for residents forming an LLC.
What does it cost to start an LLC in Wyoming for non-residents?
Forming an LLC in Wyoming will cost non-residents $150 in filing fees. This is only slightly more expensive than the $100 for residents.
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