Reduced Regulations, No Taxes, Anonymity & More
Laws governing Limited Liability Companies vary greatly across states. Wyoming was the first state to allow LLCs and continues to be at the forefront of corporate innovation. This is why Wyoming is a popular destination for new LLCs even when so few live here.
Wyoming is known for its frontier mentality and our culture can work to your benefit. We value reduced regulations, low fees, no taxes and anonymity. Other states charge more, publish personal information and won't respect your single member LLC when it matters most. These benefits make WY popular regardless of where you live:
No income tax or tax return to file.
Members and managers are never listed anywhere.
Charging order protection, including for single member LLCs.
Single member LLCs are not discriminated against.
Wyoming allows Close LLCs which have no required annual meeting.
Wyoming LLCs are inherently private. The WY Secretary of State only requests to know who organizes the LLC, which is us. Our name appears on the documents and your information never appears anywhere. This prevents nosy neighbors, needy family members and aggressive creditors from finding your assets with a simple name search.
An LLC is legally separate from its owner(s). No owner is liable for debts incurred by the company. This is called the corporate veil. Wyoming also prevents personal creditors from voting or seizing your interest, voting Combine this with the nation’s strongest charging order protection and you have a powerful combination. The creation of multiple LLCs will segregate business assets from business liabilities. Ask us how today.
The state for you depends upon your situation. However, we feel confident Wyoming offers benefits few other do. The three states most commonly considered states are Delaware, Nevada and New Mexico.
Delaware offers wonderful advantages for large corporations. They also have additional fees and paperwork. These are not off putting for large companies with lots of resources. Bank of America does not care if it pays $1,000 more a year. For small and medium sized businesses, though, the increased cost are deal breakers.
Nevada LLCs are the most similar to Wyoming. However, they are several hundred dollars per year more expensive. You may find a complete comparison of Wyoming, Delaware, and Nevada here.
The ongoing reports that are required by federal and state government is extremely tedious to complete when an organization is set up as a corporation. There are quarterly financial reports that need be completed for the IRS. Your board of directors also has to have at least one meeting per year, with minutes taken and kept in a file, documenting these meetings. This must be done in order to keep your status as a corporation. Some of this can avoided using a Close Corporation, but neither corporation is as simple as an LLC.
Taxation is one of the major challenges that face corporations today, especially if they are small businesses. If a corporation decides to issue shares to shareholders and a profit (dividends) is paid to the owners on those shares, then the organization will have to pay taxes on the profits. There is then a second form of taxation for corporate owners. This is the personal tax that they will have to pay because they received profits individually. With an LLC the owners only pay taxes once on their personal income no matter how much revenue or profits the organization achieved. Additionally, corporations have to pay quarterly FICA and Social Security taxes for each of their employees. Learn more about LLC taxes here and Corporation taxes here.
With a Corporation adding new executive team members (president, vices president, treasurer, secretary, etc.) can be quite a challenge because Board of Directors has to be involved in the decision-making on new management. The more people you have in the decision-making the longer the hiring process will take. With an LLC, management team members can select whomever they like without the approval of a board. LLC's are not required to have a board of directors to select executive staff.
LLC's can operate more fluidly than corporations because they don't have multiple layers of management. In a corporate structure management team members have to get approval from the board of directors before they can finalize a decision. Those who choose the corporate form of a business entity have to seek board guidance on major decisions, and in some cases minor decisions. This can make the day-to-day management very tedious. LLC's do not need board approval to make decisions. They simply corroborate with each other and move forward on decisions from that point.
Limited Liability Companies (LLCs) and Limited Partnerships (LPs) are well established business entities. Both boast flexible structures, providing the ability govern the way you want to. Each provide you the power to dole out obligations, maintain a healthy standard of care, and define your business terms with ease. Although sharing many qualities, LLCs and LPs are far from the same thing and one may be a better pick for your business than the other.
Personal liability is the most significant difference between an LLC and an LP. A Limited Partnership may have one, or several general partners that take charge of routine management within the business. With this responsibility comes a limitless amount of managerial liability, thus these general partners may be responsible for paying off debts and performing business duties.
A limited partner, however, has protection from personal liability. This entity cannot be entrusted with a significant amount of say within the company's management. If the court finds that the limited partner has acted as a manager, it will be tried as a general partner. To safeguard against this, a Limited Liability Company may become a general partner with an LP. This type of partnership, though, will add cost, a degree of complexity and possibly some painful tax repercussions.
The LLC retains the elastic nature of the partnership, while providing protection from the dangers of personal liability. Their only liability is their investment. LLC members can be corporations, individuals, or even other LLCs and there is no restrictions on how many members you can have. LLCs and Limited Partnerships are both exempt from federal income tax and it is the responsibility of the investor to declare its own income tax.
When comparing the LLP (limited liability partnership) and the LLC (limited liability company), one advantage stands out from the rest. The partner has added protection from the actions of other partners.
In a general partnership, all partners may be held liable for the actions of their fellow partners. This limited liability partnership provides some protection for the partner for extraordinary actions of the other partners. Such acts include errors, negligence, or incompetence. The liability from these actions can be devastating; this form of entity grants some protection in this area much like you receive from organizing as a corporation.
This LLP selection is very popular among professions in which legal liability can be extremely high. Some professions who may choose this type of investment are accountants, architects, or doctors. One caveat is that you HAVE to have more than one person involved in the organization. You cannot have an LLP in your own name. However, the LLC can have only one member.
One advantage of a single member LLC is that you can still file your tax return as normal, placing your LLC activity in your personal 1040. The biggest benefits of an LLP and an LLC are liability protection. If you get sued for doing something within your business life, all that can be collected against is your business assets. In addition, if you are sued on a personal level (like for a car accident) your business assets cannot be collected.
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