How to Incorporate in Wyoming vs. How to Start a Wyoming LLC
A Guide to Choosing the Best Business Entity in Wyoming
Want to start a business in Wyoming, but unsure if an LLC or corporation best meets your needs? Active Filings has the guide for you! We can help you navigate the jungle of starting a business. Along the way we’ll point out some advantages and disadvantages of incorporating or forming an LLC in Wyoming.
When you’ve decided which business entity is right for you, you can hire Active Filings to incorporate your business in Wyoming. We’ll streamline the process and make it as smooth going as possible. We’re sure that you’ll find out in no time why Active Filings is America’s most reliable business incorporation service.
LLCs vs. Corporations
The average person doesn’t know the difference between an LLC and a corporation? Active Filings is about to drop some knowledge. Below you’ll find the three factors we think will help you make an informed decision on whether you want to incorporate or start an Wyoming LLC.
- Ease of maintenance
LLCs are pretty easy to maintain. An LLC can opt to be managed by its members, which allows all owners to share in the business’s day-to-day decision-making, or by managers, who can be either members or outside managers. This is helpful if members aren’t experienced in running a business and want to hire people who are. Corporations have to hold meetings, keep minutes, record votes, and generally file more paperwork compared to an LLC. However, corporations are perpetual, which means they can exist as their own entity forever, whereas an LLC will generally dissolve and cease to exist upon the resignation, death, or bankruptcy of the member or members.
- Desired tax structure
LLC is generally organized as a pass-through entity, meaning its profits go directly to its members without being taxed by the government on the company level. Instead, they’re taxed on members’ federal income tax returns. This makes filing taxes easier than if your business were taxed on the corporate level. Corporate profits are subjected to what can be referred to as “double taxation,” which means that a corporations profits are taxed, and then you get hit with taxes at the personal income level. The Wyoming LLC is where it’s at on tax structure.
If you plan to raise capital for your business, then incorporation probably makes the most sense. Investors prefer the favorable taxation rules of a corporations, and unlike LLCs, a corporation’s shareholders are not taxed on company profits unless profits are distributed. This means the dividends paid from the corporation can be structured to take advantage of the best tax scenario for the shareholders. LLCs If you plan to grow your small business into a larger entity and attract investors, forming a corporation is your best bet.
Let’s also not downplay the notion of prestige. When you hear the word corporation, many people think of Amazon, Apple, Walmart, and Nike. While the LLC is perfect for the small to medium-sized business, the LLC just doesn’t carry the same weight as a corporation. While LLCs first came into being in the late 1970s, the corporation is the oldest recognized business entity in the US.
WY LLCs vs. WY Corporations
While we’ve already broken down the differences between an LLC and a corporation, we’re going to dig a bit deeper into the pros and cons of forming an Wyoming LLC or corporation. Take a look below to see what makes Wyoming LLCs and corporations unique:
- Low Taxes
We say this because Wyoming has THE lowest taxes in the US. No state income tax. No corporate income tax. No inventory tax. No gross receipts tax. No franchise tax. No excise tax. No tax on food. Wyoming doesn’t even levy a tax on candy since the state considers candy a food. They do tax vending machine candy and snacks. The only taxes you’ll pay in Wyoming are sales taxes, which average out to be a little over 5% depending on where you live or purchase your goods. Wyoming’s low taxes are a pretty awesome benefit, especially for anyone with an LLC because once you’ve filed your Federal Tax Return and your Wyoming Annual Report, you’re basically done.
- Excellent Asset Protection
Wyoming seriously has your back when it comes to protecting you and your business’s assets. The whole point of an LLC or corporation is to not only run a profitable business, but to also legally shield yourself and any of your members or shareholders from lawsuits. Wyoming is one of five states that has stringent protections on the books for single member LLCs. In Wyoming, even if a creditor obtains a charging order against your LLC, they can’t access your business or income thanks to the protections of the Delaware Corporations Act. This makes it nearly impossible for anyone to actually enforce a judgment against your business
- Privacy and Anonymity
Wyoming’s privacy protections are well known throughout the business world, and Wyoming Annual reports only require the name and signature of one person, plus they report only the assets located in Wyoming. With a Wyoming corporation or LLC you really can anonymously own your business. This anonymity is helpful in preventing lawyers from finding out what companies you own by searching public records and filing frivolous lawsuits that could waste your time and hurt your wallet. You’d be hard pressed to find a state that offers better protection for the small business owner.
- The Cost of Doing Business
Wyoming only charges $100 to file your Articles of Organization or Incorporation, which means that to start an LLC or a corporation, you’re looking at the same cost. And believe us, lots of other states nickle and dime you for everything, but not Wyoming. When you file your annual report they charge you $50 (unless your business has earnings above the $250,000 threshold based on the charges of $.0002 per dollar of business assets) but overall the costs to form and operate a business in Wyoming are far lower then in other states.
Wyoming LLC or Wyoming Corporation? Final Answer.
Wyoming invented the LLC. That’s right, in 1977 Wyoming passed the first legislation that allowed for a hybrid style of business entity that became known as a Limited Liability Company. So for this fact alone, it’s pretty hard not to choose the Wyoming LLC as the best, easiest, and most affordable option for your Wyoming business. When you factor in an LLC’s ease of maintenance, desired tax structure, and not having to go out and woo business suit-wearing investors, the Wyoming LLC is a pretty awesome. That said, because Wyoming makes it so affordable to run a business, forming a corporation is nearly as easy as an LLC, with just a few added wrinkles. But in our estimation, ease of use and simplicity rule!
How to Incorporate in Wyoming
To form a Wyoming corporation, you must complete and file the Articles of Incorporation with the Wyoming Secretary of State. The online state filing fee for your Wyoming Articles of Incorporation is a super affordable $100. If you choose Active Filings, we’ll make sure the process of incorporation is as painless and straightforward as possible. Here’s a quick over view of the information you’ll need in order to properly fill out your new company’s Articles of Incorporation.
Pretty self-explanatory here, but just for clarification, you’ll need to enter your company’s name and end it with “Inc.” or “Corp.” You’ll need to determine whether the name is available in Wyoming by searching the Secretary of State’s database. Per Wyoming’s law, your corporate name may not contain language stating or implying that the corporation is organized for a purpose other than that permitted.
If you are forming a “Close Corporation” you’ll need to check this box. If not, leave this section blank. The majority of corporations are not close corporations, so you’re probably not forming one. But if you are or even if you just want a little information, allow Active Filings to drop some knowledge. A closed corporation is a company whose shares are held by a select few individuals who are usually closely associated with the business. By structuring as a closed corporation when incorporated, a partnership can benefit from liability protection without dramatically changing the way that the business operates.
Here you’ll list your registered agent and their address. Both domestic and foreign entities are required to maintain a registered agent. All registered agents must maintain an address in Wyoming for service of process, notice, or demand. Don’t want to act as your own registered agent or you don’t know anyone in Wyoming, never fear, Active Filings is here! If you hire us as your registered agent, you can use our address and we’ll receive all of your corporation’s important mail.
Where do you want your mail to go? Your legal filings go to your registered agent address, but for your mailing address you can use your home address. If you want to stay off the books and remain anonymous, we recommend a PO Box.
When you hire Active Filings to act as your registered agent, we’ll let you use our Wyoming office address as your principal address.
Here is where you’ll list the number of shares you plan to create. At least one share must be authorized, but you can authorize as many as you want.
Your incorporator signs your Articles of Incorporation. When you hire Active Filings, we’ll serve as your incorporator and sign for you.
You’ll definitely want Active Filings in your corner when it comes to personal contact information. If you fill this section out with all of your own personal information, it becomes public record, which can result in you receiving spam mail and annoying sales calls for some cruise vacation you have no interest in going on. Hire us and we’ll let you put our information here instead of yours.
How to Start an LLC in Wyoming
Starting an LLC in Wyoming is pretty affordable, with the cost to file your LLC’s Articles of Organization being just $100. You can file online or by mail, and once filed with the state, your LLC will be formally created. Here’s a simple walk-through of what information you’ll need to fill out Wyoming’s Articles of Organization paperwork:
What is your company’s name? Make sure no one else already has registered “Earth, Wind, and Tires, LLC” as a business by searching the Secretary of State’s database.
The registered agent for your Wyoming LLC must have a physical address in the state, which makes Active Filings the perfect registered agent for your business. Sure you can act as your own registered agent, but then your name and information will be out there for just about anyone to get in touch with you, including junk mail and robocalls. Active Filings will be happy to receive all of your important mail, which will also keep your name and address out of state records, and help keep your information protected.
Your registered agent’s address will go here. When you hire Active Filings, you can put our address down.
Seems a bit derivative, but Wyoming really wants to make sure they’ve got all your info, so when you hire Active Filings to act as your registered agent, we’ll let you use our Wyoming office address as your principal office address.
Your LLC Organizer is the person or company who signs the LLC formation documents. Active Filings can do this for you.
You’ll need to enter a person of contact, their phone number, and email address. If you hire Active Filings we’ll allow you to put our contact information in this section, which will save you the headache of unwanted phone calls and emails.
WY Annual Report Requirements
In order to keep your LLC or corporation in Wyoming in good standing, you’ll need to complete a couple tasks with the state to keep your business entity up and running.
Below, you’ll find instructions and resources to help you accomplish all your maintenance and tax related upkeep.
What is the Wyoming Annual Report?
The purpose of Wyoming’s report is to keep your business records up to date with the state, which allows creditors and other interested parties to look up your business address in case they need to contact you. The IRS also uses this information to track the payment of your company’s taxes.
How do I file my Annual report?
You can file your LLC’s Annual Report through the Business and Commercial Services Division website. You can also file your report by mail or in person.
To file online you’ll need to know your business ID number, which you can search here.
Once you’ve recovered your ID number, simply enter your business “Filing ID” in the search box.
You have two options: “file online” or you can select “print form” and mail a paper copy.
The site will generate the Wyoming Annual Report form for your business. Pay your fees with a credit card ($2 online filing fee) or you can mail your Annual Report with check, to:
Wyoming Secretary of State
Herschler Building East, Suite 101
122 W 25th Street
Cheyenne, WY 82002-0020
How much does it cost to file an annual report in Wyoming?
All Wyoming LLCs and corporations are required to file an annual report, though Wyoming is unique in that filing fees are based on the assets that a particular company has located in the state. The state charges $.0002 per dollar of business assets or $50, whichever is greater. Although this fee structure is unique, many companies do not exceed the $50 minimum because they do not have business assets greater than $250,000. This payment structure applies to all Wyoming corporations, limited liability companies, and limited partnerships. Nonprofits based in Wyoming pay a more standard $25 fee to file their annual report. If a company chooses to file the annual online, no matter their structure, they are also subject to a $2 credit card convenience fee. Not bad.
When are Wyoming Annual Reports due?
Reports are due on your company’s first day of it’s anniversary month, so if “Sit and Spin Pottery, LLC” started their company on October 20th, their Wyoming Annual Report would be due on October 1st of the following year.
Wyoming Business Taxes
Tell me about Wyoming Business Taxes.
Your business is subject to sales tax based on what it purchases, but Wyoming doesn’t charge income or corporate income tax, so once you file your federal tax return, you’re done.
Is this real? No income or corporate tax in Wyoming?
Wyoming may only have half a million residents, and it may snow 13 months out of the year, but since Wyoming does not collect an income tax on individuals, or levy any state corporate income tax, your LLC or your corporation are not required to file a Wyoming State Income Tax Return. This makes life just a bit easier for the state’s business owners, and is why the state is consistently ranked as a low tax, business-friendly state.