Forming an LLC in Wyoming can be a great way to protect your personal assets.
The state is one of the most business-friendly states in America, and forming an LLC there is relatively easy.
This article will discuss how to form an LLC in Wyoming so that you can follow along with the process.
There are a few steps that need to be followed in order for your business entity to be recognized as an LLC. You will also need the assistance of an attorney who is familiar with how these types of things work in Wyoming.
What is a Wyoming LLC?
A limited liability company is a structure that combines features of both a corporation and an LLC.
While an LLC provides limited liability protection, as corporations do, it also allows for pass-through taxation (like in traditional sole propriety companies).
A Wyoming LLC is treated as a domestic company under state laws, but it can be considered to have foreign status under federal law.
This means that the members are not liable for debts or other obligations incurred by the company outside of their activities within its business framework.
The benefits of forming a Wyoming Limited Liability Company include: protecting personal assets from being used to pay off debt; pass-through income so there are no double taxes on profits made at different levels; ease in transferring ownership interests without triggering tax consequences.
The Benefits of Wyoming LLC
A Wyoming limited liability company (LLC) provides liability protection and tax benefits to LLC owners (members). Wyoming LLCs also protect members' personal assets from business assets and liabilities.
A Wyoming LLC is a pass-through entity for income tax purposes, meaning the company itself does not pay taxes on its profits. Instead, the individuals who own interests in the company are responsible for reporting their share of any taxable income or loss generated by the organization. This means all profits or losses flow through directly to each member's individual state tax return.
Wyoming LLCs do not have to hold annual meetings or keep formal minutes either—instead, they only need record decisions made by unanimous written consent. They may be required to file an annual report with the state, but other than that, there are no additional taxes or fees required.
Wyoming LLCs can be owned by individuals (natural persons) and other companies. They also have the option of choosing to become member-managed or manager-managed LLC depending on their needs. There is only one class of membership in an organization, too, which makes it easy for everyone involved because each person has equal rights and privileges within the company itself.
Forming a Wyoming LLC takes less time than forming most other business entities—the entire process should not take longer than a few business days once everything goes through unopposed at both ends.
Step 2: Appoint a Registered Agent
A Wyoming registered an agent service is a person or company you appoint to receive official service of process documentation on behalf of your LLC.
This means that if someone files a lawsuit against your limited liability company, the registered agent service must accept legal documents related to the suit.
Failure to do so can result in serious consequences for both you and your LLC—including losing any chance at protecting personal assets from being seized because they are tied up with business property.
A Wyoming registered agent should be someone with a physical street address in the state. This is because the service of process (the legal papers that someone files to start a lawsuit) must be done in the county where the registered agent resides.
Many business owners choose themselves as their company's registered agent, but this can present some obvious issues—what if you move out of state or become unreachable for one reason or another? If your LLC ever needs to go to court, it will be up to you and your fellow officers/managers/members (or whoever ends up running things in your absence) to show up on time and explain why they should not make decisions based on what other people told them while you were gone.
That's why the best option is to appoint an independent third party as your registered agent in Wyoming.
The cost of registered agent services starts at $40 per year, but this can vary depending on the company you choose.
In some cases, your LLC's registered agent may be able to offer other services like business compliance or even financial planning—if they do, then their price will reflect that added benefit.
Step 3: Write the Wyoming Articles of Organization
The LLC Articles of Organization are what make your LLC official, so it's important to get them right. You can use either an online template or a traditional document. The state fee for filing is currently $100 plus any county fees or a $2 additional fee if you file your Articles of Organization online.
The Wyoming LLC Articles of Organization contain basic company information such as the name of your LLC, business address, and registered agent.
Articles of Organization are the only document that must be filed in order to create a Wyoming LLC.
That means they are the only document you have to file with the Secretary of State's office, and they are also filed with your county clerk.
The Articles must include: The name of the LLC; whether members or managers will manage it (if there are members); its registered agent contact information; a statement that there are two co-registered agents available for service in Wyoming (if applicable).
You can even add additional lines so you can include other important details such as when you want your articles to become effective, dissolution procedures, and termination dates if applicable. These items do not need to be listed on each sheet but should not exceed four lines per sheet.
If you want to add any business classifications like "for-profit," check with the Wyoming Secretary of State for availability since some are not available in every state.
Step 4: Create a Wyoming LLC Operating Agreement
LLC operating agreements are one of the most important documents for LLC members. Without a solid operating agreement, it can be difficult to enforce any decisions made by the company or its members in court.
An operating agreement is not required under Wyoming law but should still be drafted and recorded with your state's Secretary of State office if you plan to operate as an LLC there.
The filing process will take about a few business days from start to finish, so make sure that this document is ready before you submit your application.
Creating a strong, efficient Operating Agreement early on will save both time and money going forward – especially when it comes down to enforcing member voting rights during major disputes regarding management decisions within the business.
Members who do not have written agreements end up spending more time arguing over when and when not to use their voting rights.
When it comes down to hiring a company, you should always make sure that they are licensed by the Wyoming Secretary of State.
You can search for this information online through the state's business portal. Licensing is absolutely necessary in order for them to be able to legally provide services on behalf of LLCs formed under Wyoming law. This step will save you from dealing with potential legal issues or tax disputes later on after things have settled within your new venture.
Step 5: Obtain an EIN
An EIN is the tax identification number for your LLC. Suppose you are the sole owner of an LLC.
In that case, it is not necessary to obtain a separate EIN—the same one that you use for your personal income taxes will also work for business taxes (this means that if you already have an EIN from another business entity, like your corporation or S-Corp, then this can be used).
The procedure for obtaining the federal employer identification number (FEIN) is relatively straightforward.
There are two different ways to apply for the EIN online.
You can choose between applying through your own secure account or by telephone (and in some cases, you may be able to fax in the application).
The process typically takes about five minutes. Applicants will receive confirmation via email once their number has been issued, so they know it's ready to use right away. No matter which method above you select, don't forget that you'll need to have easy access to your business name, its primary address, and the mailing address of the registered agent before completing this step.
EINs are required if your limited company plans to hire employees or open an LLC bank account.
Step 6: Obtain Business Licenses
Business licenses are required for all businesses in Wyoming. The state of Wyoming requires two separate licenses, a business privilege tax certificate and an employer identification number (EIN), which is also a form of business license.
Federal license requirements are available at the U.S. Small Business Administration website. The business licenses for the state are available on the Secretary of State website.
Wyoming LLC Taxes
The tax structure for an LLC in Wyoming is defaulted to be taxed as a sole proprietorship. LLCs do not pay taxes at the federal level, but they are required to file and pay taxes on income generated within the state of Wyoming (Wyoming State Business Tax).
Income from an LLC is subject to taxation in your personal capacity if you have chosen that status for your business, which means it will only be taxed once. In this case, however, Wyoming allows losses incurred by corporations up until their formation date to offset gains from other businesses or sources.
This includes sole proprietorships and partnerships, which can help save money down the road when filing returns with both entities together at tax time.
Corporate income tax is applicable if an LLC chooses to be taxed as a corporation.
The federal government also imposes an income tax on corporations and companies that do business within their jurisdiction. Wyoming LLCs operating in other states will be subject to this taxation as well if they choose to incorporate federally with the IRS (Internal Revenue Service).
State income tax rates are based on federal income tax rates, so an LLC that is exempt from paying corporate taxes at the federal level will not have to pay state corporate income taxes.
Sales tax is applicable if an LLC is registered to collect and remit taxes on sales made by the company. If your LLC sells goods or services that are subject to taxation, you will need to file separate state sales tax returns.
If your LLC is registered in Wyoming and does not have any employees nor operate a business outside of the company itself, it is exempt from paying unemployment taxes. However, if you have employees, you will need to pay unemployment taxes.
Similar to federal income tax, a Wyoming LLC has a default tax status at the partnership level for property and capital gains taxes.
This means that there is no separate entity taxation in this state. If your company's profits are distributed among members using an LLC agreement, these earnings would be subject to self-employment taxes for each.
The details about tax requirements are available at the Wyoming Department of Revenue website.
Wyoming LLC FAQs
How Do I File an Annual Report for an LLC in Wyoming?
You can file online through the Wyoming Secretary of State website. When filing your Wyoming annual report, you will need to provide the filing ID number and the $60 annual report fee.
Does Wyoming have a Series LLC?
Yes. Wyoming is one of the few states that allow for the Series LLC business structure.
How Long Does It Take To Create an LLC in Wyoming?
After you file your Articles of organization, it usually takes around two weeks to receive your Articles of Organization back from the state.
How Do I Transfer Ownership of an LLC in Wyoming?
Limited liability companies in Wyoming can transfer ownership by filing an amendment to the Articles of Organization and making a new operating agreement. The name on file with the Secretary of State must match exactly, including punctuation and spaces between letters, for this to work.
Can I Change the Name of My LLC in Wyoming?
Yes, you can change the name of your LLC in Wyoming by filing a name change application and the Articles of Amendment with the state.
What Is a Foreign LLC in Wyoming?
A foreign LLC in Wyoming is a Wyoming LLC formed by an out-of-state or foreign business entity.
Can I Write My Own LLC Operating Agreement?
Yes. You can write your own Operating Agreement, but it's not recommended. It's much easier to use the one provided by your service provider, which is usually far more comprehensive than what you could come up with yourself.
The disadvantage of using a template or the form offered by the state when filing for an LLC in Wyoming is that it can be difficult to understand how it relates to other documents.
How Do I Add a Bank Account to My LLC in Wyoming?
Once you have your Articles of Organization and your Operating Agreement in place, you can contact the bank and start the business bank account application process. Keep in mind that you will need an EIN and potentially business licenses too.
Does Wyoming Recognize Single-Member LLC?
Yes. Wyoming recognizes both single-member and multi-member LLCs. Single-member LLCs have the same rights and responsibilities as multi-member LLC, which means asset protection is guaranteed in both cases.
Does Wyoming LLC Need Business Insurance?
A lot of Wyoming LLCs will need some kind of business insurance in order to protect LLC assets. The business insurance you will likely need includes: general liability insurance and commercial auto insurance.
Are Wyoming LLCs Anonymous?
Wyoming companies that have a registered agent or a registered agent services file annual reports, disclose managers' names, and file an annual report can remain anonymous.
Does Wyoming Allow Expedited Processing for LLCs?
No, the state of Wyoming does not allow for expedited processing. The LLC formation can take up to fifteen days but may be processed faster depending on the volume of filings coming in.
Does Wyoming Have a PLLC?
Wyoming allows professional LLCs, although the law doesn't officially mention professional LLCs. There are no specific laws regarding professional LLC; however, it is assumed that they would be treated like regular LLCs under the law.
Wyoming LLC formation can be a daunting process.
However, this article has provided you with the necessary steps to go through in order to make sure your business is legally sound and protected by law.
If you have any questions about what we have covered, do not hesitate to reach out for help from an attorney who specializes in small businesses or startups.