LLC
Wyoming saw 3077 business applications in February of 2022. Despite being the least populated state, Wyoming exceeded the business applications of many other states with greater populations. This can be attributed to the fact that Wyoming is a very business friendly state. The state allows for anonymous companies and there is no state taxation on personal or corporate income. In addition to this, there is no taxation on franchises either. The state also boasts low fees for businesses and this includes setting up an LLC. Wyoming also has some of the lowest sales taxes in the US. The combination of all of these factors make Wyoming a very desirable state in which to do business. This desirability is furthered by the outstanding nature of LLCs in Wyoming which boasts greater benefits to business owners than practically any other state.
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Benefits of an LLC in Wyoming
Asset Protection
A limited liability company (LLC) has many advantages. The primary advantage of an LLC is the asset protection which it offers. The structure of an LLC will separate your assets from your business’s and your business’s assets from your personal assets. This means that even if the company goes bankrupt none of your personal assets will be affected. Similarly, if you as an individual go bankrupt your company’s assets will be unaffected. This will mean that the owners of an LLC are not held responsible for the debts which the company may incur.
The asset protection which an LLC or corporation provides is referred to as “the corporate veil”. This is the entity which protects the LLC owners assets even in the case of an LLC being owned and operated by a single individual. In Wyoming the protection which the corporate veil provides is particularly strong. This is the case because Wyoming has one of the most strict standards for piercing the corporate veil of any US state. This protection was increased in 2016 when the LLC act was amended to better the protection provided by an LLC. The new act created the situation that simply not observing the corporate formalities is not sufficient to hold the owner liable. There must be unobserved company formalities in addition to another factor on the list which the act provides. Another bonus of Wyoming LLC law is that even if an LLC is a pass-through entity, that cannot be factored into the analysis and the LLC will still provide its asset protection.
Something to consider when your business or address is outside of Wyoming is that Wyoming LLC may not necessarily apply. A Judge in a case which involves multiple states has discretion as to which states laws should apply. The judges tend to favor the laws of the state in which the case was filed unless one applicant in the matter is able to show that another state's laws have more bearing on the case. Thankfully, it is established in piercing the veil cases that the law from the state in which the entity is established should apply instead of the law from the state in which the case takes place.
Miscellaneous Benefits
Aside from the benefits which an LLC offers in terms of asset protection there are other benefits worth noting. Some of these benefits are exclusive to Wyoming or shared by few other states. For example, there are very few restrictions when it comes to ownership of an LLC. The owner of shares in an LLC can be another LLC. Additionally, the quantity of shares or owners does not have a limitation. This stands out above other business friendly states such as Nevada.
There are fewer formal procedures for an LLC than there are for an S corporation or a C corporation. This means that there is less paperwork to do each year and LLCs do not require meetings in the same way that corporations do. Wyoming is notable in this regard as it has very low filing fees for an LLC as well as requiring less paperwork to establish an LLC than other states. Additionally, the annual fees which are required to maintain an LLC are low in Wyoming compared to other states.
An LLC may create share classes which allows for the customization of voting and economic rights. This can be done through the manufacturing of what is known as preferred shares. This allows an owner of an LLC to maintain control even when selling equity in their company. This can be a highly beneficial means of developing capital for your business but not ceding control of your business to other parties.
Wyoming is unique because it allows for the appointment of a lifetime proxy. This means that you may appoint another individual to be the representative of your shares in a business. This feature of Wyoming allows for total anonymity when it comes to business dealings. This is by no means a requirement but it is an optional extra for those wanting a greater degree of privacy when it comes to their business dealings. An additional advantage of this feature is that an anonymous Wyoming LLC may own an LLC in another state which requires disclosure of the owner's details. This can allow for the anonymous ownership of LLC in virtually any state as the listed owner of the LLC in another state will be the Wyoming LLC which has an anonymous owner.
For additional information regarding the formation of an LLC in Wyoming consider consulting this website.
Final Thoughts
An LLC in Wyoming is directly benefited by the business-friendly policies which the state enjoys. These include highly favorable taxation, anonymous ownership and strong asset protection. An LLC in Wyoming also stands out against the formation of a corporation as it provides the same level of asset protection without the extra paperwork or yearly fees which a corporation requires. This is an addition to the ease with which an LLC may be established and maintained in Wyoming. Finally a Wyoming LLC benefits from the ability to create preferred shares which facilitate the customization of voting rights within an LLC.
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