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For the reasons described below, it is highly unlikely that a business owner would actually realize any of these benefits if they were to organize their business as a Wyoming LLC. The first major substantive selling point is that Wyoming LLCs supposedly have superior asset protections. Wyoming law provides that the sole remedy available to creditors of owners of LLCs is a charging order. This limitation can make it more difficult for a creditor to collect on their judgment because the creditor will not be able to force the debtor to sell his ownership interest in the company.

Having this protection can give a debtor more leverage in negotiating a settlement.

Form A New Wyoming LLC or Corporation

However, the charging order limitation is not unique to Wyoming. It is true that Wyoming has extended the charging order limitation to single member LLCs, whereas many other states do not provide such a protection in the case where an LLC has only one owner.

Online LLC

See my post on Nevada corporations and LLCs for links to more information on what steps your should take for asset protection. Another major selling point that is used in promoting Wyoming LLCs is that Wyoming has no income tax.

Unfortunately, since most LLCs are pass through entities, which pay no taxes themselves, this is of limited benefit. For instance, if you live in another state that has a personal income tax, and form a Wyoming LLC, all the income would be passed through to you and you would still end up paying state income taxes. Therefore, forming an LLC in Wyoming is not an effective tax avoidance method.

Fast Facts: Your Budget and Timeline

The final major selling point that is used to promote Wyoming LLCs is that the fees to organize them and the ongoing annual fees are lower than other states. This is certainly true. But if you live outside of Wyoming, and organize your business as a Wyoming LLC, your business will almost certainly be doing business in your home state. In that case, your LLC will be required to qualify to do business in your state, which usually involves paying a fee equal to what your company would have paid had it simply been organized in your own home state.

How to Start an LLC in Wyoming

Therefore, you are unlikely to realize any cost savings from organizing your LLC in Wyoming Nevada and Delaware entities present this same issue as well. Despite this additional cost and complication, it is uncertain whether you will see any of the benefits, such as greater asset protection, that are often promised in connection with incorporation in Wyoming, nor are you likely to see any tax savings.

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  • However there is some flexibility. Once filed and accepted you are a formal LLC under the Wyoming law.

    Benefits of Forming a Wyoming LLC | Registered Agents of Wyoming LLC

    To form an LLC in Wyoming is not time consuming or expensive for you. This is your agent in Wyoming that will accept legal papers if the LLC is sued. Once you have formed a Wyoming LLC you must take steps to keep it current and in good standing with the state. While this can be cumbersome and expensive in some states it is a simple process in Wyoming. In order to form and maintain an LLC in Wyoming this annual payment must be made.

    Mountain Business Center LLC in the News:

    Sutton Law Center will work with you to make sure you current and in good standing with the State of Wyoming. File your Wyoming Articles of Organization.

    Include Resident Agent Information.