How to Incorporate in Wyoming vs. How to Start a Wyoming LLC

The average person doesn’t know the difference between an LLC and a corporation? Active Filings is about to drop some knowledge. Below you’ll find the three factors we think will help you make an informed decision on whether you want to incorporate or start an Wyoming LLC.

• Ease of maintenance
  LLCs are pretty easy to maintain. An LLC can opt to be managed by its members, which allows all owners to share in the business’s day-to-day decision-making, or by managers, who can be either members or outside managers. This is helpful if members aren’t experienced in running a business and want to hire people who are. Corporations have to hold meetings, keep minutes, record votes, and generally file more paperwork compared to an LLC. However, corporations are perpetual, which means they can exist as their own entity forever, whereas an LLC will generally dissolve and cease to exist upon the resignation, death, or bankruptcy of the member or members.
• Desired tax structure
  LLC is generally organized as a pass-through entity, meaning its profits go directly to its members without being taxed by the government on the company level. Instead, they’re taxed on members’ federal income tax returns. This makes filing taxes easier than if your business were taxed on the corporate level. Corporate profits are subjected to what can be referred to as “double taxation,” which means that a corporations profits are taxed, and then you get hit with taxes at the personal income level. The Wyoming LLC is where it’s at on tax structure.
• Investors
  If you plan to raise capital for your business, then incorporation probably makes the most sense. Investors prefer the favorable taxation rules of a corporations, and unlike LLCs, a corporation’s shareholders are not taxed on company profits unless profits are distributed. This means the dividends paid from the corporation can be structured to take advantage of the best tax scenario for the shareholders. LLCs If you plan to grow your small business into a larger entity and attract investors, forming a corporation is your best bet.

Let’s also not downplay the notion of prestige. When you hear the word corporation, many people think of Amazon, Apple, Walmart, and Nike. While the LLC is perfect for the small to medium-sized business, the LLC just doesn’t carry the same weight as a corporation. While LLCs first came into being in the late 1970s, the corporation is the oldest recognized business entity in the US.

Note that whether you form an LLC or a corporation, you’ll need to file a Beneficial Ownership Information (BOI) Report with the Financial Crimes Enforcement Network (FinCEN) once your company is officially formed with the state of Wyoming. This report provides the federal government with identifying information about your company and those with the most control over profits and business operations. However, unlike state filings, the information shared in your report does not go on the public record and there is no filing fee. (Though if you don’t want to file this on your own, we offer BOI filing service for just $25.)

While we’ve already broken down the differences between an LLC and a corporation, we’re going to dig a bit deeper into the pros and cons of forming an Wyoming LLC or corporation. Take a look below to see what makes Wyoming LLCs and corporations unique:

• Low Taxes
  We say this because Wyoming has THE lowest taxes in the US. No state income tax. No corporate income tax. No inventory tax. No gross receipts tax. No franchise tax. No excise tax. No tax on food. Wyoming doesn’t even levy a tax on candy since the state considers candy a food. They do tax vending machine candy and snacks. The only taxes you’ll pay in Wyoming are sales taxes, which average out to be a little over 5% depending on where you live or purchase your goods. Wyoming’s low taxes are a pretty awesome benefit, especially for anyone with an LLC because once you’ve filed your Federal Tax Return and your Wyoming Annual Report, you’re basically done.
• Excellent Asset Protection
  Wyoming seriously has your back when it comes to protecting you and your business’s assets. The whole point of an LLC or corporation is to not only run a profitable business, but to also legally shield yourself and any of your members or shareholders from lawsuits. Wyoming is one of five states that has stringent protections on the books for single member LLCs. In Wyoming, even if a creditor obtains a charging order against your LLC, they can’t access your business or income thanks to the protections of the Delaware Corporations Act. This makes it nearly impossible for anyone to actually enforce a judgment against your business
• Privacy and Anonymity
  Wyoming’s privacy protections are well known throughout the business world, and Wyoming Annual reports only require the name and signature of one person, plus they report only the assets located in Wyoming. With a Wyoming corporation or LLC you really can anonymously own your business. This anonymity is helpful in preventing lawyers from finding out what companies you own by searching public records and filing frivolous lawsuits that could waste your time and hurt your wallet. You’d be hard pressed to find a state that offers better protection for the small business owner.
• The Cost of Doing Business
  Wyoming only charges $104 to file your Articles of Organization or Incorporation, which means that to start an LLC or a corporation, you’re looking at the same cost. And believe us, lots of other states nickle and dime you for everything, but not Wyoming. When you file your annual report they charge you $50 (unless your business has earnings above the $250,000 threshold based on the charges of $.0002 per dollar of business assets) but overall the costs to form and operate a business in Wyoming are far lower then in other states.

Wyoming LLC or Wyoming Corporation? Final Answer.
Wyoming invented the LLC. That’s right, in 1977 Wyoming passed the first legislation that allowed for a hybrid style of business entity that became known as a Limited Liability Company. So for this fact alone, it’s pretty hard not to choose the Wyoming LLC as the best, easiest, and most affordable option for your Wyoming business. When you factor in an LLC’s ease of maintenance, desired tax structure, and not having to go out and woo business suit-wearing investors, the Wyoming LLC is a pretty awesome. That said, because Wyoming makes it so affordable to run a business, forming a corporation is nearly as easy as an LLC, with just a few added wrinkles. But in our estimation, ease of use and simplicity rule!

To form a Wyoming corporation, you must complete and file the Articles of Incorporation with the Wyoming Secretary of State. The online state filing fee for your Wyoming Articles of Incorporation is a super affordable $104. If you choose Active Filings, we’ll make sure the process of incorporation is as painless and straightforward as possible. Here’s a quick over view of the information you’ll need in order to properly fill out your new company’s Articles of Incorporation.

Starting an LLC in Wyoming is pretty affordable, with the cost to file your LLC’s Articles of Organization being just $104. You can file online or by mail, and once filed with the state, your LLC will be formally created. Here’s a simple walk-through of what information you’ll need to fill out Wyoming’s Articles of Organization paperwork:

In order to keep your LLC or corporation in Wyoming in good standing, you’ll need to complete a couple tasks with the state to keep your business entity up and running.

Below, you’ll find instructions and resources to help you accomplish all your maintenance and tax related upkeep.

What is the Wyoming Annual Report? 
The purpose of Wyoming’s report is to keep your business records up to date with the state, which allows creditors and other interested parties to look up your business address in case they need to contact you. The IRS also uses this information to track the payment of your company’s taxes.

How do I file my Annual report? 
You can file your LLC’s Annual Report through the Business and Commercial Services Division website. You can also file your report by mail or in person.

To file online you’ll need to know your business ID number, which you can search here.

Once you’ve recovered your ID number, simply enter your business “Filing ID” in the search box.

You have two options: “file online” or you can select “print form” and mail a paper copy.

The site will generate the Wyoming Annual Report form for your business. Pay your fees with a credit card ($2 online filing fee) or you can mail your Annual Report with check, to:

Wyoming Secretary of State
Business Division
Herschler Building East, Suite 101
122 W 25th Street
Cheyenne, WY 82002-0020

How much does it cost to file an annual report in Wyoming? 
All Wyoming LLCs and corporations are required to file an annual report, though Wyoming is unique in that filing fees are based on the assets that a particular company has located in the state. The state charges $.0002 per dollar of business assets or $50, whichever is greater. Although this fee structure is unique, many companies do not exceed the $50 minimum because they do not have business assets greater than $250,000. This payment structure applies to all Wyoming corporations, limited liability companies, and limited partnerships. Nonprofits based in Wyoming pay a more standard $25 fee to file their annual report. If a company chooses to file the annual online, no matter their structure, they are also subject to a $2 credit card convenience fee. Not bad.

When are Wyoming Annual Reports due?
Reports are due on your company’s first day of it’s anniversary month, so if “Sit and Spin Pottery, LLC” started their company on October 20th, their Wyoming Annual Report would be due on October 1st of the following year.

Tell me about Wyoming Business Taxes.
Your business is subject to sales tax based on what it purchases, but Wyoming doesn’t charge income or corporate income tax, so once you file your federal tax return, you’re done.

Is this real? No income or corporate tax in Wyoming?
Wyoming may only have half a million residents, and it may snow 13 months out of the year, but since Wyoming does not collect an income tax on individuals, or levy any state corporate income tax, your LLC or your corporation are not required to file a Wyoming State Income Tax Return. This makes life just a bit easier for the state’s business owners, and is why the state is consistently ranked as a low tax, business-friendly state.