Forming an LLC in Wyoming
You are interested in forming a Wyoming limited liability company. A limited liability company (LLC) is a business entity that many small businesses choose as a way to organize themselves when they are just getting started. Forming an LLC will have a few advantages for small businesses but may not be appropriate for larger ventures or startups seeking investors. In addition, LLCs have a unique business structure that can get very technical.
It would help if you looked closely at other business entities like partnerships and S-corporations before launching a Wyoming LLC.
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Advantages of LLCs:
- Limited personal liability protection for members for business debts and lawsuit
- Fewer reporting and recordkeeping requirements than other kinds of entities, including corporations
- Avoiding the double taxation—business and personal—of corporations if taxed as a pass-through entity
- Wyoming LLCs do not have to disclose the identification of members to the public
Disadvantages of LLCs:
- An LLC is not a good investment vehicle for outside investors
- LLC owners may pay federal self-employment taxes
Registering Foreign LLCs in Wyoming
Any foreign (out-of-state) LLC that wants to do business in Wyoming must register with the Secretary of State for a certificate of authority. There is a $150 state filing fee.
Step-By-Step: Forming a Wyoming Limited Liability Company
With all of that, you have decided to form an LLC in Wyoming. You have your members, your business plan, and a little startup capital, and you are on your way.
Here is a step-by-step guide for creating a fully operational Wyoming LLC.
Step I: Name Your LLC
Creating a legally proper LLC name and then protecting it is one of the first actions in LLC formation. This process can be complex and time-consuming, but the LLC needs to operate legally in Wyoming.
The first thing you have to do is create a great name (that's up to you). Wyoming law requires that the name be unique and different from any other company's name.
Your first task will be to search the Secretary of State Business Center business entity search page to ensure that your chosen name isn't already in use for an existing business.
This search is just a preliminary step to the state filing. You still need to go through the registration process to get your name approved by the state.
After you have decided on a name, the name you will submit to the Secretary of State must then contain one of these legal suffixes:
- Limited Liability Company
- Limited Company
- Limited Liability Co.
- Ltd. Co.
- Or any other variation
The name of the LLC cannot use any variation of the word “corporation." It cannot use language considered obscene or that claims a profession or business affiliation that does not exist.
Wyoming does not have professional LLCs per se. The state allows professional corporations, which must end with the words "Professional Corporation" or the capital initials "P.C." A professional corporation can form an LLC, following the standard LLC formation rules. You would then wind up with something like "P.C., L.L.C."
Wyoming allows the formation of a "Close LLC." This business structure is for small, family-held businesses. The significant difference between this structure and a regular LLC is that any member selling an interest in the organization requires the approval of all other members.
Wyoming is one of a few states that allow "series" LLCs, which are a group of LLCs operating under one parent entity. This is intended to spread the risk of various ventures.
Reserve Your Name
Wyoming allows you to reserve a business name for 120 days while the formation process continues. This is done through the Wyoming Business Center. Reserving a name is not a guarantee that your name will be approved, but it keeps anyone else from using it for that time. There is a $60 filing fee for this.
Step II: Appoint a Registered Agent
The State of Wyoming requires an LLC to have a Commercial Registered Agent for service of process before formally filing with the state. A registered agent is designated to receive process (legal documents) on behalf of the LLC. A Wyoming registered agent can be an individual or a company (domestic or foreign), but it must have a physical Wyoming street address. A forming LLC will often choose a professional registered agent service or may choose the company lawyer.
Step III: Legally Protect Your Business Name
Next, make sure that no one else can use it in business or on the internet. This means that you have to make sure that no one else uses that name. You do this by doing a name search to ensure that the internet domain name is available. If available, grab it immediately (that will only cost a few dollars).
If you want to do business nationally or operate in several other states, you should trademark the nonprofit's name with the United States Patent and Trademark Office (USPTO). This process takes some time and money. While that application is pending, the name is still protected as a common law trademark.
Once you receive your federal trademark, apply to the Wyoming Secretary of State to register it as a Wyoming trademark or service mark. You may also trademark the Wyoming LLC name with just the state, without a federal trademark.
If you are going to do business under a fictitious name—that is, a DBA, you must register that name with the Wyoming Secretary of State.
Now that name is yours, you can keep anyone else from using it, and it conforms to Wyoming law.
Step IV: Structure the Business
An LLC has a particular, unique business structure.
To begin with, the stakeholders of an LLC are called “members." There is no stock issued, so they cannot be “stockholders." This is the primary reason that an LLC is not a good investment vehicle for either the founders or potential investors. There is no number of members required.
Then you should write an LLC operating agreement. This is not required under Wyoming law, but it is a good idea to keep everybody's interests clear.
A Wyoming limited liability operating agreement should contain the following points:
- Percentage of members' ownership
- Voting rights and responsibilities
- Powers and duties of members and managers
- Distribution of profits and loses
- Holding meetings
- Buyout and buy-sell rules (procedures for transferring interest or in the event of a death)
- Designation as a Close LLC if it is one
The members may manage an LLC or hire an outside manager. You will indicate which you have chosen on your registration application.
Step V: Write and File Your Wyoming Articles of Organization With the Secretary of State
You are now ready to compose and register your Wyoming LLC as your business registration with the Wyoming Secretary of State.
Foreign LLCs cannot use this process. They must register separately, as noted above.
Your LLC Articles of Organization must contain the following:
- LLC name and mailing address
- Name and physical address of the registered agent
- Consent to Appointment by Registered Agent
- Effective date of the LLC filing
- Organizer name. The organizer does not have to be a member, and Wyoming law can keep the name of the LLC members from the public.
- If this will be a close LLC.
- Organizer signature(s)
- Filing fee of $100
This is filed with the Wyoming Secretary of State website through the Business Center. If you file online, you will have an immediate response. If you file with paper forms, it will take 2-3 business days.
After You File Articles of Organization
You will have numerous state and federal requirements for your new LLC after filing with the state.
State Business Licenses
Wyoming does not have state business licenses. You may be subject to local business licenses, however.
State Employer Filing Requirements
Your LLC will be subject to state rules if it has employees—even if the employees are also members.
Register with the Wyoming Department of Workforce Services as a new employer and register each employee with the New Hire Reporting Center. This site also contains Unemployment Insurance and Workers' Compensation information.
Wyoming has no personal or corporate state income tax. Your LLC may, however, be subject to federal tax. It may also be subject to state employer tax, unemployment insurance, business taxes (sales tax, use tax, and excise taxes), as well as workers' compensation taxes. Check with the Wyoming Department of Revenue.
You will be subject to both federal withholding tax if you have employees and, of course, to business income taxation.
You may choose one of several different tax designations for your LLC, including C or S-corporation, partnership, or pass-through organization with personal liability for the members. Consult with your accountant for the best approach.
If you have employees, you must file to receive an IRS Federal Employer Identification Number (FEIN) on the Internal Revenue Service website. You must also apply for your FEIN if the LLC has more than one member. You will be subject to all federal tax-withholding rules.
LLCs also have particular requirements for filing federal income taxes.
Wyoming LLCs must file an annual report with the Secretary of State to remain in good standing. It is due on the first day of the anniversary month of formation. The filing fee varies from $50 to $500, depending on the organization's assets.
Get Help Starting Your Wyoming LLC
Fortunately, forming an LLC can be a straightforward process with FindLaw’s Business Formation Service. If you have any questions, it's always helpful to consult with an experienced and knowledgeable Wyoming business and commercial lawyer.
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