Before forming a business, the owner must decide first whether he wants to run it alone or with a partner. Does he want it to operate without a separate legal entity? Are the resources adequate to make it work? If not, he may consider switching to a corporation or a Limited Liability Company (LLC).
He also has to determine the appropriate legal structure for his business. He has to figure out which structure makes the most sense and matches his preference. It depends on different factors, such as the laws and fees. But, LLC is often favored due to liability protection and tax efficiency.
From there, he can choose in which state to establish a business entity. Any state where the business is formed does not require the owners to become residents there. They are free to choose the state with laws that fit their situation and the nature of their business.
LLC in Wyoming
Wyoming remains a favorite state for many LLC owners. Over the years, the number of business formations has grown dramatically. For example, LLC formations had increased from 20,971 in 2015 to 36,967 in 2017. In just two years, LLCs have grown by 76%.
Owners express their preference and satisfaction in Wyoming. The ease of forming LLCs is one of the things that they appreciate. But, there’s more to Wyoming LLCs, especially for small business owners. Below are some other benefits that Wyoming LLC owners may enjoy.
Asset Protection and Limited Liability
An LLC in Wyoming is considered a separate legal entity from its Federal tax ID number. Hence, liabilities are shouldered by the LLC, not the owners. Moreover, it provides a high level of protection from lawsuits and unsolicited mails. For example, a summons is not directed towards the owners or managers. This allows them to maintain privacy and asset protection.
Lower Startup Costs
Wyoming filing fees are reasonable. If you compare it to Nevada, Wyoming state fees are lower by 84%. Hidden officer filing fees in the former are not included yet. You may have to pay $125 thirty (30) days after your business is formed.
The thing is, Wyoming only charges officer filing fees 12 months after the LLC formation. It does not require a state business license, unlike in Nevada, where you must pay $200. Given this, the state delivers an ideal company package.
No State Income Tax on Limited Liability Companies
Wyoming does not levy state income tax on LLCs. If you choose to form your business there, you may not pay state income tax at all.
Transferability of Ownership
A sole proprietorship ends when the owner can’t work on it anymore. It means that he can’t transfer his ownership to other people or a third party. Meanwhile, LLC allows the transferring of ownership. It can be done through an exchange of membership.
No Citizenship Requirements
You do not have to be a US citizen or a Wyoming resident to form an LLC. Even if you reside in other countries, you can establish and run an LLC in the state. Yet, you must be familiar with the state laws and information about your registered agent.
Easy to Move
If you already have an existing LLC, moving to Wyoming is not a problem, unlike in other states.
Number of Owners is Unlimited
Wyoming does not set a limit on the number of LLC owners. But if the business is in S-Corporation status, the maximum number of owners or members is 100.
Ability to Build Credit and Raise Capital
LLCs are separate legal entities from their tax identification number. This is similar to an individual’s social security number. Given this, an owner can raise capital if necessary. He may build credit or borrow and sell equity in the form of shares. Because of the limited liability and ease of transferring investments, investors prefer LLCs.
Due to its legality, a limited liability company has perpetual life/duration. In short, it can continue into succeeding generations. In a sole proprietorship, the business ends once the owner can’t run it anymore. But an LLC can continue until its dissolution. LLC membership or ownership can be sold, bequeathed, and gifted to other people.
Wyoming provides unmatched security and privacy to LLC owners. Some examples include:
- Minimal reporting and disclosure obligations
- LLC owners’ information is not listed and maintained on Wyoming public records.
- Wyoming state law does not require the enlistment of a manager or member for the duration of the LLCs.
Perks of Forming an LLC in Wyoming
Forming a Limited Liability Company (LLC) is a sagacious move for your business. Due to an LLC’s structure, owners can raise capital by borrowing money and selling equity. It ensures your security and privacy. Plus, it protects you from lawsuits and unsolicited mails. You are assured that your finances and assets are separate from liabilities. Since Wyoming LLC fees are low, the state remains one of the top choices in the US.
As previously mentioned, many business owners favor LLCs due to ease of formation. LLCs are more flexible in requirements. They are less formal compared to corporations.
Moreover, Wyoming is one of the states without personal or corporate income taxes. As such, owners will only have to pay an annual license tax of $50. If not, they can choose to allot a small percentage of the value of their LLC assets in the state. Lastly, the number of members or owners can exceed 100, unlike corporations.
Cost to Form an LLC
When you form an LLC, you have to pay the LLC filing fee. It is a one-time payment to the state. The fees vary depending on the state where it is formed. The other costs include the following:
Wyoming LLC Online Filing Fee
The main fee is the state filing fee of $100 for the Articles of Organization. It is filed with the Secretary of State.
Registered Agent Fee
You may act as the registered agent for your LLC. But if you want to enjoy the benefits of having one, you will have to pay a company that provides it. A registered agent ensures your LLC’s compliance with state law. He also keeps tax forms and legal documents and reminds you of the deadlines.
Optional LLC Fees
Optional LLC fees include LLC name reservation fee and the “Doing Business As” (DBA) name fee.
Business Licensing and Permit Fees for Foreign LLCs
Business licensing and permit fees depend on the LLC’s industry and geographical location.
If your LLC requires several federal, state, and local permits or licenses in order to legally operate, you might want to consider hiring a professional. Doola will help you incorporate, access US Payment systems, and stay legal year over year.
Wyoming LLC Fees
To have a precise estimation for your LLC formation, here are the important fees:
Wyoming LLC Online Filing Fee
The main fees for a Wyoming LLC are the state filing fee of $100 for the Articles of Organization. You may have $2 for a convenience fee when you file it online. It is filed with the Wyoming Secretary of State. But keep in mind that every state has different filing fees. But, they are only one-time payments during your LLC formation.
Business Permits and Licenses
Depending on the industry and location of your LLC, you might need to pay permits and licenses. This applies to other business structures. Wyoming charges $100 for the registration of foreign LLCs. Payments for licenses and permits are not included.
In some states like Arizona, Nebraska, and New York, an LLC has to publish a statement of formation in a local newspaper. The publication fee can vary from $40 to $2000. It depends on the requirements of the state.
Registered Agent Fee
In Wyoming, you can be your registered agent. But using a registered agent service helps keep your company in compliance. He reminds you of important filing deadlines and avoids late fees. Aside from the one-time Wyoming LLC filing fees, you may consider paying registered agent service. On average, the registered agent fee amounts to $468 annually.
Other LLC Filing Costs
LLC Name Reservation
You may wish to pay the name reservation fee of $50 for your LLC filing for more convenience. It covers up to 12 months before the LLC formation. All you have to do is file an Application for Reservation of Name and pay the above-mentioned fee.
“Doing Business As” (DBA) Name
You may also file an Application for Reservation of Trade Name. With this, you can have another name aside from the legal business name of your LLC. Pay the filing fee of $100, and everything will be settled. This is also known as the “Doing Business As” (DBA) Name.
Annual Fees in Wyoming
After paying the Wyoming LLC formation fees, it may operate in the state. But, you will still have to pay annual fees. These include the following:
Wyoming Annual License Tax
Since it does not impose a state income tax, you will only have to pay for the annual license tax. This is required upon your LLC’s annual report filing. You will have to pay $50 or 0.0002% of the LLC’s assets, whichever is higher. If the annual fee exceeds $500, it must be filed by mail after the online process. For more information, you may refer to the Wyoming government.
Wyoming Annual Report Fee
LLCs in Wyoming have to pay the annual report fee of $60 to the secretary of state. This is done at the beginning of the year. If you want an easier payment method, you may do it online and pay the convenience fee of $2.
Technically, the annual report fee is $60. But if the value of the assets of an LLC exceeds $250,000, you will have to pay $60 for every $250,000. So if your LLC has assets of $1,000,000, you will have to pay the annual report fee of $240 plus the convenience fee of $2 if you do it online.
Cost to Form a Foreign LLC in Wyoming
If your existing LLC is registered in another state, you may register it in Wyoming if you plan to expand it. But, this is filed as a foreign LLC in Wyoming. You will have to pay the foreign LLC registration fee of $100. You may also do the registration by applying for a Certificate of Authority.
Aside from the registration fee, you will also have to pay for business permits and licenses. The cost depends on the industry and geographical location of your business.
Not Sure Where to Start? Seek Professional Help Today!
Are you a business owner who wants to form an LLC? If that is so, reach out and seek assistance from the registered LLC agents of Doola. We will help you incorporate, access US Payment systems, and stay legal for over a year.
Wyoming LLC Fees FAQs
Is an LLC really necessary?
Basically, a business does not have to be an LLC to operate. But it has a lot of benefits that fit your needs and preferences. Its benefits seem to outweigh the costs.
What is the cheapest way to get an LLC?
The cheapest way to get an LLC is to file the forms by yourself. It varies depending on the filing fees in a state. The LLC’s Articles of Organization corresponds to incorporation statements.
Do you have to pay for a Wyoming LLC every year?
You have to pay the annual license tax of $50 or 0.0002% of the value of assets, whichever is higher. Annual report fees of $50 per $250,000 of assets are also paid.