So you’ve decided to start a Wyoming Limited Liability Company (LLC)…
Well, congratulations! Starting a new business or just starting your business in a new state, is an exciting step, so well done.
I’m going to give you a full breakdown of how to form your Wyoming LLC, but before I do, I’m just going to cover a few basics to make sure that an LLC is the right business structure for you.
(If you want to skip to the ‘how to form a Wyoming LLC’ section, click here)
What Is A Wyoming LLC?
A Wyoming LLC is a Limited Liability Company formed in the state of Wyoming that is governed by the laws, regulations, and statutes of the state of Wyoming.
Why choose An LLC?
There are three key advantages you get through choosing an LLC over other company structures, such as being a sole trader, being in a partnership, S Corporation, or C Corporation.
1. Limited Liability And Asset Protection
The first and most significant reason to choose an LLC over just a sole trader or partnership is that the owners of an LLC are not personally responsible for the debts and liabilities of the company.
That means if your company goes bankrupt or gets sued, your creditors can’t take your house or car or other personal assets. Their financial recourse is limited SOLELY to the assets of the LLC.
Given that an unexpected event (like a global pandemic) can cripple even the most prepared business, obtaining this level of personal asset protection is a must for anyone who values the hard work they’ve put into building that business.
The second reason to choose an LLC is to protect your personal details.
Hackers and scammers have become far more sophisticated over the last 10 years and can use even the most insignificant details about yourself and your life to steal your identity and run up tens of thousands of dollars in debt in your name.
When you operate as a sole trader or as a partnership, your personal details are viewable on the public register, available for any hacker to see.
But, when you form an LLC, you can protect your personal details.
All you need to do is use an LLC formation service and that service will place their company details on the public register (while you still retain ownership of the company), keeping your personal details away from the eyes of ill-intentioned individuals and your credit score safe.
The final big advantage of an LLC is that it provides significant tax advantages over a corporation.
If you start a corporation, you’ll experience what is commonly referred to as ‘double taxation’.
It’s called ‘double taxation’ because any profits made by a corporation are first subject to corporate income tax, then once the post-tax profits are distributed to the company owners (shareholders, in the case of a corporation) as dividends, they then pay personal income tax on those distributions.
This means you end up paying tax twice, hence the term ‘double taxation’.
With an LLC, you avoid double taxation. All profits retained with the company are taxed at company rates while all profits that are distributed to the LLC owners are treated as personal income and taxed at personal income rates. This means you only have to pay tax on those profits once.
In addition to avoiding double taxation, the 2017 Tax Cuts and Jobs Act introduced a new tax benefit for LLCs called the Qualified Business Income Deduction (QBID).
This allows most LLC owners to receive up to a 20% discount on their taxes — a benefit not available if you choose another business entity.
How To Start An LLC In Wyoming
If you’re comfortable with the idea that a Wyoming LLC is the right business structure for you and your new business, then here are the five steps to forming your LLC in Wyoming.
IMPORTANT: If you require assistance navigating the complicated red tape associated with starting a Wyoming LLC, dealing with all the formation documents, and you want to protect your privacy, there are companies that will complete the LLC formation process for you.
They’re called LLC formation services and will help you establish your LLC in Wyoming for as little as $0 plus state filing fees (though my highest rated LLC formation service is ZenBusiness at $49 plus state filing fee).
If you want personal guidance navigating the red tape as well as protection for your personal details, read my guide on the best LLC service.
1. Obtain Articles Of Organization Form
The first step in starting your LLC in Wyoming is to get a copy of the Articles of Organization form from the Wyoming Secretary of State.
You can get the form here: Wyoming Articles of Organization (PDF)
This is a PDF you can complete on your computer and is the primary form you need to submit to the Wyoming Secretary of State to form your LLC.
The steps below all relate to fields on this Articles of Organization form.
2. Choose Your Business Name
Once you have the Articles of Organization form, the first step is to insert your company name.
But, before you just go scribbling any bright idea that’s popped into your head, you need to check that the name hasn’t already been registered by another company.
Every business in Wyoming must have a different legal name so you MUST check to see if your desired name is available.
Luckily for you, this is a simple process. All you need to do is head to this page at the Wyoming Secretary of State, enter your desired name into the search bar, and click ‘search’.
In a few seconds, you’ll get a full list of every business with a similar name so you can make sure your desired name is available.
3. Choose A Wyoming Registered Agent
Every LLC in Wyoming (and every other state) needs to have what’s called a ‘registered agent’.
A registered agent is a legal and publicly registered statutory agent available to receive important government notifications (such as service of process) and must be available during regular business hours.
You can be your own registered agent or you can hire a company to act as your registered agent, and it’s an important decision to make.
If you choose to be your own registered agent, you risk your personal details being on the public record and accessible to scammers and hackers, as well as the possibility of missing a government legal notice if you are not available during all business hours.
This will cost in your personal time, potentially missing an important legal notification, and if you do, potentially being sued without the chance to defend yourself. But being your own agent won’t cost you anything in fees.
If you choose to use a registered agent service, they will protect your personal details, ensure you receive all important legal notifications and provide mail forwarding, but will cost you between $99 and $299 per year.
Given the cost of NOT using a registered agent service, like having your personal details stolen and huge debts accrued in your name, or missing a service of process and losing a court case because you didn’t know it was happening, I ALWAYS advise new LLCs to use a registered agent service.
If you’d like to protect your personal details and your company, click here to learn about the best Wyoming registered agent.
Whatever option you choose, get the Registered Agent Consent Form signed so that it’s all legally certified.
4. Choose Your LLC Address
Your name is not the only piece of personal information that is available on the public register. Every LLC in Wyoming needs a mailing and principal business address that the public can view.
If you don’t use a registered agent and you plan to run a business with a physical street address, you can use that address as your mailing address. If your business doesn’t have a physical street address, you will have to use your home or office address.
If you use a registered agent service, they will provide you with an address that is not traceable to your own personal residence.
5. Sign And File Your Articles Of Organization
When all the necessary details are filled out and you’re confident they’re 100% correct, it’s time to sign the form and send it off.
You can sign the form yourself if you’re comfortable with your personal details being on the public register, but if you’re using an LLC formation service, they will sign the form on your behalf.
Once your forms are filled out, mail them to the Wyoming Secretary of State with a check or money order for $100.
Their address is:
Herschler Building East
122 W 25th St
Suites 100 and 101
Cheyenne, WY 82002-0020
The Secretary of State will notify you by email and/or mail once your filing is complete, which usually takes at least a week, if not longer. If you want your LLC formation completed quicker than a week, some LLC formation services can get it processed in as little as 72 hours.
Other LLC Activities
There are a few other activities you need to undertake regularly to ensure your Wyoming LLC stays in good standing with the Wyoming Secretary of State, but aren’t part of the LLC formation process.
You need to file an annual report every year, obtain a certificate of good standing, and pay state taxes, amongst other important activities, to ensure your LLC remains valid and you don’t accidentally fall outside the asset protection laws.
If you want to take some of the pressure off your shoulders while running your business, you might also want to consider a Wyoming PEO and subscribing to online legal services.
Wyoming LLC Fee Summary
Regardless of whether you choose to start your own LLC or hire an LLC service to start it for you, there are fixed fees you need to pay. They are:
Articles of Organization: $100
Name Reservation: $50 (optional)
Registered Agent Fee: $99 – $299
Annual Report: $50
State Personal Income Tax: None
State Corporate Income Tax: None
After Starting Your Wyoming LLC
Starting your LLC is a big step so crack a beer/have a glass of wine/take a long walk in the warm sand of a tropical beach while you debate whether or not you’ve made a massive mistake, but don’t get too relaxed. You’re still not ready to run your business.
There are three more important steps you need to complete before you have the necessary foundations.
1. Create An Operating Agreement
If your LLC is the outer shell of your new business, the LLC operating agreement is the central nervous system.
The operating agreement dictates how the internal workings will function on a high level because it identifies the small business owners, dictates the ownership percentages, who has the authority to make high-level decisions, and how the company will operate.
As you can probably imagine, the operating agreement is a CRITICALLY important document for your business. If you get it wrong, you can stifle your growth and progress with clunky, decision-making processes and poor structures for innovation and adaptation. But, if you get it right, it can remove the shackles that hold most businesses back and set you free to move forward without constraint.
If you haven’t written an operating agreement before, there are a couple of options for you.
Northwest Registered Agent provide a free operating agreement template on their website. If you want assistance with the wording, some LLC formation services will include one in their LLC formation package. If you want to form your own LLC and just want qualified legal assistance with the operating agreement, some online legal services can also assist in doing it right the first time.
2. Apply For An Employer Identification Number
If you plan on opening a bank account for your LLC or hiring employees, you need what is known as an Employer Identification Number (EIN).
An EIN is issued by the Internal Revenue Service (IRS) in the same way it uses social security numbers, but instead of being used to identify people, the EIN identifies business entities.
Most LLC formation services will file for an EIN on your behalf as part of their LLC formation packages, but if you want to file for one yourself, head to the IRS online application portal between 7am and 10pm Monday to Friday and submit your application.
3. Open A Business Bank Account
The final step before you launch yourself headfirst into the world of small business ownership is to open a bank account.
This is an often overlooked but critically important step in starting an LLC.
A lot of people will run their business through their personal bank account and then try to separate the business transactions from the personal transactions around tax time. While this may seem simpler than setting up a separate business bank account, it’s not advisable for two reasons.
The first reason you MUST set up a business bank account is that you might think it will be obvious which expenses are personal and which are business-related at the time you’re making the transaction, but I can guarantee that it will be FAR less obvious 10 months down the track when you have hundreds of transactions to review. This makes tax time even more stressful than it needs to be.
The second reason is that if you run all your company expenses through your personal account, it can open you up to being sued in your personal capacity, even though you have the protection of an LLC.
So, if you want to make your life less stressful and you also want to hang onto your personal assets, please open a business bank account.
To open a business bank account, you’ll typically need a bank account kit, which includes a copy of your Articles of Organization, EIN, Operating Agreement, and your initial resolution.
Once again, if you want to avoid the stress of putting these together, most LLC formation services will include a bank account kit as part of their LLC formation package.
Starting a Wyoming LLC is a great step forward so congratulations on having the courage to take control of your business life.
If you choose not to use an LLC formation service (which starts at $0 plus state fee), there are 5 key steps you need to complete to start your Wyoming LLC. They are:
- Obtain the Articles of Organization form
- Name your LLC
- Choose your Registered Agent
- Choose your LLC address
- Sign and file your Articles of Organization
While the red tape and legal jargon can be tough to navigate and it can be a time-consuming process if you’re attempting this on your own, completing it will be the first of many fun steps on the journey to building your business empire.
So, congratulations once again and best of luck with your journey!