The state legislature established Wyoming LLC formation in 1977, the first state in the nation to do so. Some experts believe that this type of business set up incorporates the best of both a sole proprietorship and a corporation. An LLC provides the holder with protections afforded a corporation but the flexibility and advantages of a partnership. Many individuals naturally gravitate toward Wyoming when they want to create an LLC because of their innovation in the industry along with generous economic benefits for LLCs there.
Benefits to Wyoming Incorporation
The individuals with an interest in a general partnership can be held financially responsible if the partnership goes into debt. However, this is not the case with an LLC as the person with interests will likely only lose assets directly invested in the business. In addition, LLCs in the state offer a choice of federal tax status. A corporation is taxed twice by the IRS, at both the business level and then at the corporation owner’s level. In Wyoming, the LLC can choose to be taxed in one of three ways – as a sole proprietorship, a partnership or a corporation. If the entity holder chooses either of the first two options, they will not pay business taxes on their profits.
Incentives and Flexibility with Wyoming Incorporation
The only annual fee that a Wyoming LLC must pay is $50 as the state does not impose an LLC franchise tax or a corporate state income tax. In addition, the state does not have inventory tax or personal state income tax. With a state sales tax of just 4 percent and a 2 percent county tax, the state has the second-lowest taxes in the country. The LLC must determine if the business management will be done by managers or members. Managers are employees who do not have an ownership stake while members usually do not work for the company but do have an ownership stake.
Call Our Law Firm for Information on Wyoming LLC Formation
While business law can be tricky to navigate, our attorneys can help you with this complex process. For assistance with Wyoming incorporation, contact the Sutton Law Center at (775) 824-0300.