Also known as an LLC, Limited Liability companies are set up so that the business structure ensures that the company's debts or liabilities remain the responsibility of the company. Wyoming LLCs protect owners from being personally liable, by employing a model that combines both the characteristics of a corporation, as well as aspects of a partnership or sole proprietorship.
How an LLC is More Flexible Than a Corporation?
You might have heard that a Wyoming LLC is much more flexible than a corporation. This is because although both corporations and LLCs are created by statute, meaning the state grants you the authority to exist. The difference between corporations and LLCs is that the laws governing those statutes were created at different times.
Corporations have been allowed to exist for hundreds of years. This means that those laws that govern the corporations have been around for the same amount of time. Corporations also have extremely strict management structures as compared to LLCs.
Similar to corporations, limited liability companies also have laws that they must comply with. The difference is that many of the laws that govern the LLCs can be changed through an operating agreement. Additionally, LLCs can be a sole-proprietorship, a partnership, or a multi-member structure. Overall, Wyoming LLCs also have no limit to the number of members that may be within the organization, and there is much more flexibility with the ability to use the operating agreement to modify any default rules set by law.
Wyoming LLC Requirements
The first step in making sure your Wyoming LLC is compliant with all laws is to pick a business name. This name must be completely unique, and cannot be the same, or very similar to any other business in your state.
In Wyoming, you must contain the words Limited Liability Company, Limited Company, Liability Company, or an abbreviation of the three options at the end of your name. There are two things that are prohibited in your LLC name, and that is either the use of either Inc. or Incorporated, or using a financial name such as Bank, Insurance, or Trust.
In the state of Wyoming, every LLC must have a registered agent as a point of contact for all LLC paperwork. The registered agent can be someone who is an owner of the business, or someone who is completely unrelated. The only requirement is that your registered agent will be required to be a resident in the same state that your LLC is being formed in. The agent does not need to be in any way an owner of the LLC. There are many companies that provide registered agent services for a fee.
In the state of Wyoming, an Operating Agreement is not a required part of the LLC filing requirements. Despite this, it is a very important and helpful part of forming a Wyoming LLC. The operating agreement is a written agreement that essentially plans out all of the legalities for the operation. It will be given to courts, investors, banks, and creditors as you operate your LLC.
This allows you to avoid upsetting any of your partners, but it also provides you with the opportunity to lay out everything that you want to be included in the LLC.
Some of the important aspects of the operating agreement include:
- Management structure
- Investment of additional capital
- How profits are divided
- What happens in the event of a death of an LLC member
Articles of Organization
Also known as the Certificate of Organization orCertificate of Formation, the articles of organization is the true first step in the legal LLC application. This document is filed with the Secretary of State in Wyoming.
Business Licenses and Permits
Depending on the industry your business will be a part of, you will need different business licenses to operate in your state. These different licenses and permits might include:
- General business license
- Health permits
- Zoning or land-use permits
- Tax registrations
- State-issued occupational licenses
Although it can be a lot of work getting all of this information together, it is essential to the compliance of your business.
Statement of Information Form
The Statement of Information form must be filled out along with your Articles of Organization. This form is simply a statement that includes your company name, the partners of the Wyoming LLC, and the business address.
- Tax Form 1065: This form must be used to file a tax return on partnership income. This form will be filed along with your other income tax documents. It is good to note that partnerships and LLCs do not pay separate taxes. Instead, all profits and losses are passed on to the partners.
- Tax Form 1099: This is a form that will be issued by any companies who have done business with your LLC resulting in a payment of over $600. This form must be included in your and your partner’s income tax filing.
- LLC Tax Extension Form 7004: This form is used to file for more time to fill out your LLC taxes. It allows you five extra months for your partnership to finish their tax documents. If you are a sole-proprietor LLC, then you will not need to file an LLC tax extension along with your own personal extension. In an LLC partnership, you will need separate business and personal extension forms to be filed.
- Tax Form 8832: This form is used if your partnership decides to elect a different tax standard. This is one of the best parts of an LLC, you choose how you want to be taxed.
Who is an LLC Best for?
Wyoming LLCs are extremely helpful when it comes to protecting your personal assets by limiting the liability. In the event of a lawsuit against your LLC, your personal assets will be protected. This means that an LLC is best for small business owners. Whether that means a sole proprietorship or a partnership, the protection of an LLC is similar to that of corporations, offering a great option for any small business owner.
If you are part of a larger organization or a start-up that is interested in traditional funding and investors, an LLC may not be the best option for you. Wyoming LLCs can complicate investor tax situations, preventing you from obtaining investors. Raising capital is also more difficult to do through an LLC versus a corporation. Overall, there are pros and cons to each option, but typically an LLC is perfect for small businesses made of one or two partners.
Work with a Lawyer to Create Your LLC
There are many reasons why a lawyer can help you to create your LLC. At Wyoming Trust & LLC Attorney we can explain to you whether or not pursuing an LLC is the best option for you.
We can help you with all of the guidelines in your operating agreement, ensuring that it truly dictates all of your rights. Contact us today for more information.