If you’re starting a business in Wyoming, you’re in luck! Wyoming is a very favorable state for creating a limited liability company (LLC). In fact, it was the first state to recognize LLCs as business entities, way back in 1977.
Wyoming strives to create a supportive environment for all types of businesses. If you don’t live in Wyoming and you’re starting a business, you may want to form your LLC in Wyoming instead of your home state to take advantage of the state’s pro-business environment. But this only applies to certain types of businesses.
An LLC is a business entity that offers liability protection for owners, as well as pass-through taxation, much like a sole proprietorship.
Advantages of Forming an LLC in Wyoming
- Wyoming is one of only a few states to have no personal or corporate income tax and no franchise tax.
- Fees to set up an LLC in Wyoming are relatively low at only $100.
- The formation documents to set up your LLC are short and simple, and no operating agreement is required.
- Wyoming permits Series LLCs and nonprofit LLCs. A series LLC allows for the segregation of members’ interests, assets, and operations into independent series. Each series is its own entity and can have its own finances. They are often used by real estate firms to separate each LLC owner’s interests.
- Wyoming offers more liability protection than other states. Creditors in Wyoming cannot seize LLC assets or a member’s ownership interest. Wyoming laws also make it more difficult for creditors to seize members’ personal assets.
- In Wyoming, the fiduciary responsibilities of members are limited.
- Public LLC filings in Wyoming do not require manager or member names, which provides anonymity.
Should You Choose Wyoming to Form Your LLC?
If you’re thinking of forming an LLC in Wyoming, but Wyoming is not your home state, going ahead with forming an LLC in Wyoming may only double your paperwork and filing fees. This is because you will likely still need to register as a foreign LLC in your home state and be subject to its laws and taxes as well as those of Wyoming.
This is true even if you merely base your business in your home state, but don’t do any sales there. This is because your business headquarters must be in the state where you live, whether you work from your home or not. Most state laws dictate that you must physically move to the state in which you form your LLC in order to avoid registering as a foreign LLC in your original home state.
A foreign LLC is simply an LLC doing business in a state other than the one in which it’s registered. For example, if your LLC is registered in Wyoming, but you also do business in Georgia, you’ll need to register a foreign LLC in Georgia.
If you have an LLC in your home state but do business in other states, you need to register as a foreign LLC in all of the states where you do business. Each state has different rules defining what doing business in their state means. Check with the secretary of state in any states where you may be doing business to see if you qualify. Generally, you’re doing business in another state if you:
- Have a physical presence of any kind in that state
- Have employees in that state
- Regularly meet with clients, managers, or investors in that state
- Are licensed to do business in that state
You also may be considered a foreign business if your business has a bank account or property in that state. However, if you’re an online business in one state and happen to make a lot of sales in other states, you’re probably not considered a foreign business and thus not required to register a foreign LLC.
If you’re starting your business in Wyoming and forming an LLC, you get to take advantage of all the benefits that Wyoming offers to LLCs. If you’re in another state, but considering forming your LLC in Wyoming, it may or may not be in your best interests.
It’s recommended that you speak with an attorney and tax advisor who are familiar with the laws of Wyoming and of your home state to determine if forming your LLC in Wyoming is the best decision for you.