Learn More About Form an LLC in Wyoming
When speaking of a limited liability company, also known as an LLC, we are talking about a business structure in the United States. In an LLC, business owners are not personally liable for the company's debts or liabilities.
Limited liability companies are a combination of a corporation, partnership as well as a sole proprietorship. Essentially, you get the best of all worlds when it comes to liability protection.
Reasons to Form an LLC in Wyoming
Whether you are thinking about starting a business, or you have been operating your business as a sole proprietor, you might be considering forming a Wyoming LLC.
There are many reasons why you might want to change the form of your business, or simply start as an LLC. These different factors include personal liability, ownership, management, cost of forming and registering the business, and finally taxation. A Wyoming LLC is a great option to choose based on the following reasons:
- Limiting your personal liability: With a Wyoming LLC you limit your own liability for business debts. This means that any assets owned in the name of the LLC, are only subject to the claims of business creditors. This includes lawsuits. Your personal assets can never be claimed to pay back business debts. This makes an LLC a form of personal protection.
- Raising capital: When you plan to seek capital from investors, you are bringing in people to contribute funds. This might also include the contribution of property, or services as well. Forming an LLC protects you from debts or paybacks to investors.
- Flexible tax management: LLCs provide huge tax advantages. As compared to a corporation, an LLC often has no separate tax that is levied on the LLC itself. Both LLC profits and losses are passed on to the members.
- Low Annual Fees: You can form an LLC for an initial cost of $102 for the state fee. The first year is the most expensive due to start-up requirements but the cost is cut down to only $60 annually after the first year.
How to Form an LLC in Wyoming
It is good to note that the details of forming an LLC vary from state to state, but when forming an LLC in Wyoming, you would begin by creating an LLC operating agreement. Next, will need to file certain forms with the appropriate state agency, which is typically the Secretary of State. Finally, you choose a name and pay a filing fee.
Choose a Name
When choosing a name for your LLC, you must choose something that is in compliance with Wyoming state rules. Under Wyoming law, your LLC name must end with the title or abbreviations of either “Limited Liability Company” or “Limited Company”. It can also be an abbreviation of one of these phrases (LLC/LC).
The next rule is that it must not be the same name as another LLC or business that is already registered in Wyoming. If you have a specific name in mind and are not quite ready to file yet, you may reserve your LLC name for a small fee.
Choose a Registered Agent
Also called a statutory agent, choosing a registered agent is essentially the person within your organization that will sign all papers, and accept legal documents on behalf of the LLC if it ends up being sued.
The registered agent must have a physical street address in Wyoming where the LLC exists. There are also commercial registered agents that can act as an agent should LLC members be unable to fill that role.
Operating Agreement
Wyoming does not require an operating agreement to form an LLC. Despite this, an operating agreement can be extremely helpful in determining exactly how your LLC will be run. This internal document is important because it will state how you plan to manage your LLC. Otherwise, state law will govern exactly how your LLC must operate.
Articles of Organization
When forming a Wyoming LLC you will need to file articles of organization with your state's corporate filing office. In Wyoming, this is the Secretary of State. These articles of organization can be completed online, but must include the following:
- Name and address of the LLC's registered agent
- Mailing address
- Principal office address
- Signature and contact information for the organizer
The articles must contain a written consent to appointment signed by the registered agent. In Wyoming, the filing fee is $100.
Who Should Start an LLC?
Starting a Wyoming LLC is a smart option for many entrepreneurs. As an individual or a partnership, an LLC can help to protect all personal assets of the owners involved.
The only time that you may not want to start an LLC is if you are a start-up or enterprise looking for traditional funding options. This is because some investors, such as venture capitalists, have tax-exempt partnerships that prevent them from investing in LLCs. LLCs can also complicate tax situations for investors and are not eligible for a section 1202 gain exclusion.
Although forming an LLC can protect you personally in many ways, it can hurt your business in terms of large scale funding, especially in the tech industry.
Work With a Business Attorney
We make it simple and easy to form a Wyoming LLC. We have been a Wyoming LLC formation service for over 30+ years! At Wyoming Trust & LLC Attorney we can help you assess all aspects of forming a Wyoming LLC, and to decide whether or not it is right for you. Contact us today to learn more.