A limited liability company (LLC) is a legal arrangement for a firm. It blends a corporation’s limited liability with the independence and absence of formalities offered by a company or sole proprietorship. Any business owner who wants to restrict his or her legal responsibility for company defaults and claims should think about creating an LLC.
EIN (Employer Identification Number)
You can receive an Employer Identification Number (EIN) by filling out a PDF Document (Form SS-4) from the Internal Revenue Service (IRS) or by applying for one on the IRS website. Any LLC that hires people involves an Employer Identification Number in order to pay withheld taxes on such jobs, open bank accounts, register for credit cards, and otherwise function separately as a business organization.
Operating agreements are not necessary when establishing a Wyoming LLC, but an operating agreement is highly essential. By forming an operating agreement, you are creating a guideline on how the Wyoming LLC will operate; basically, a model about how the business’s business relations will be organized. Creating such an operating agreement has been seen to prevent disagreements between staff and owners.
Secretary of State
As the director of the United States Department of Revenue, the secretary conducts international strategy with the United States administration. The Cabinet rank, founded in 1789, is comparable to that of a foreign minister in other countries.
The state is nominated by the president of the United States and confirmed by the United States Senate during a nomination hearing before the Senate Committee on International Affairs.
Because of the significance of their specific offices, the state, the secretary of the Treasury, the secretary of Justice, and the Attorney General are commonly recognized as the four most powerful Cabinet members.
The State is a Class I rank on the Executive Calendar and therefore collects the salary recommended for that level (US$221,400 in January 2021).
The specified duties of the state are to supervise US foreign service and immigration policies, as well as to manage the Department of Revenue. The secretary may also counsel the president on U.S. foreign policy concerns, such as the recruitment of diplomats and ambassadors, as well as the firing and recall of certain people.
The secretary has the authority to negotiate, interpret, and cancel international security arrangements. The secretary can also serve the United States at foreign conventions, associations, and agencies.
Renewal of LLC Formation Service
Both business companies shall preserve their good reputation by sending an annual report to the Secretary of State. Renewals may be done electronically in a matter of seconds by utilizing the record identifier or ID search feature (found linked in the heading of this paragraph).
In Wyoming, state authorities only need the registered agent information, the principal office address, and a few other bits of specific information. Both filers must request a $10 filing charge for their periodic report, but this fee will escalate if the renewal is late.
Filer Contact Cover Letter
A filer contact cover letter will accompany the name reservation form as will a check/credit card voucher to pay the $20 filing fee. A name reservation will allow you to reserve the rights to your current name while ensuring that it is unique to you in the state of Wyoming (if the application is accepted).
Steps to Forming an LLC in Wyoming in 2021
1. Choose a Name for Your LLC
Under Wyoming law, the words “Limited Liability Company,” or the abbreviations “LLC” or “L.L.C.,” “Limited Company,” or the abbreviations “LC” or “L.C.,” “Ltd. Liability Company,” “Ltd. Liability Co.,” or “Limited Liability Co.” must appear in the name of an LLC. The terms “Low-Profit Ltd. Liability Company,” “Low-Profit Ltd. Liability Co.” or “Low-Profit Limited Liability Co.” or the abbreviations “L3C” or “l3c” must appear in the name of a low-profit SMLLC.
The name of your LLC in Wyoming must be distinct from the names of other business organizations currently on file with the Wyoming Secretary of State. See the Secretary of State’s guide How to Choose a Company Name for more details. The Wyoming Secretary of State’s business name database can be used to verify the availability of names.
By filing an Application for Reservation of Name with the Wyoming Secretary of State, you can reserve a name for 120 days. The reservation must be mailed. There is a $50 filing fee.
When doing business in the real world, you are not required to use the official legal name registered in your Articles of Organization. You may instead use a trading name, also known as a “DBA” (short for doing business as), assumed name, or fictitious business name. To do so in Wyoming, simply begin using the trade name to mark your Wyoming LLC in the state.
You may also mail an Application for Registration of Trade Name to the Secretary of State and pay a fee of $100. To file, the business must be physically located in Wyoming. Registration is not needed, but it does notify others that the name is in use in Wyoming. To use a trade name for your LLC outside of Wyoming, you must follow the rules of the state in question.
2. Appoint a Registered Agent
Every Wyoming LLC in Wyoming must have an agent in the state for service of process. This is a person or business company that offers to sign legal documents on behalf of the Wyoming LLC if it is sued. The registered agent may be a Wyoming citizen or a business organization registered in Wyoming. A physical street address in Wyoming is needed for the registered agent.
3. File Articles of Organization
A Wyoming LLC is created by filing Articles of Organization with the Secretary of State. The articles must include:
- the name and address of the LLC registered agent
- the mailing address of the Wyoming LLC
- the principal office address of the Wyoming LLC, and
- signature and contact information for the LLC organizer.
- The articles must be accompanied by a written consent to appointment signed by the registered agent (this form is included with the Wyoming Articles of Organization form).
The articles may be filed by postal mail or online. The filing fee is $100, $102 for online filing.
4. Prepare an Operating Agreement
In Wyoming, an LLC operating agreement is not necessary, but it is highly recommended. This is an internal document that outlines how your Wyoming LLC will operate. It outlines the members’ and managers’ rights and obligations, as well as how the Wyoming LLC will be handled. It will also help you keep your limited liability by demonstrating that your Wyoming LLC is a distinct business entity. In the absence of an operating agreement, your LLC operations will be governed by state LLC law.
An operating agreement does not need to be filed with the Articles if one is established.
5. Comply With Tax and Regulatory Requirements
Your Wyoming LLC may be subject to additional tax and regulatory requirements. This may include:
Even if your Wyoming LLC has no workers, it must receive its own IRS Employer Identification Number (EIN) if it has more than one member. If you form a one-member LLC, you must receive an EIN only if it would have employees or if you want to tax it as a business rather than a sole proprietorship (disregarded entity). You can get an EIN by filling out an online EIN application on the IRS website. There is no filing charge.
Depending on the nature of your LLC’s operations and where it is located, you can need to obtain additional local and state business licenses.
Department of Revenue
In some situations, such as if you want to sell merchandise and collect sales tax, you must register with the Wyoming Department of Revenue (DOR). The DOR website has forms for sales tax and other registrations that you can use.
6. Open a business bank account
Keeping your personal and business accounts apart allows your accountant to prepare your taxes more efficiently. It may also be used to show that the organization is a different agency from you. If your accounts are intertwined, you may lose your personal money as well as your business profits in a dispute.
Well, the Wyoming limited liability company feature of your Wyoming LLC covers you, but how can anybody tell what money is yours and what belongs to the business if the finances are all merged into the same bank account?
Many banks would need evidence that the Wyoming LLC is licensed with an appointment by a registered agent with the State of Wyoming in order to open an account. Expect to be sent the following forms:
- A stamped—or official—copy of your Articles of Organization
- A Certificate of Good Standing indicating that the organization is duly licensed by a Wyoming registered agent as a Wyoming LLC.
- A duplicate of your EIN (unless you are a single-member LLC without any employees)
The first two papers are available for free printing from the Secretary of State website. Simply browse their business database for your Wyoming LLC.
7. Get a business license
A general business license is not needed to create an LLC in Wyoming, however, you will need an occupational license to work in some controlled industries. Among the regulated occupations are:
- Psychologists, psychiatrists, alcohol educators, and social services are also examples of professionals.
- Engineers, developers, and landscape architects
- Cosmetologists, barbers, nail designers, and estheticians are also examples of beauty professionals.
- Electricians and plumbers
Check out the city-specific criteria for the cities in which you would be working. There may be general business licenses or industry-specific licenses. Denver, for example, does not require general licensing but does require permits for food peddlers, dry cleaners, child care centres, and other companies.
8. Open a wage withholding account
Do you plan to recruit staff and deduct taxes from their pay? The state of Wyoming then allows you to open a salary withholding account, which you can do for free online. If you’re recruiting W-2 workers or withholding taxes from 1099 contractors, you’ll need this. You will use this account to administer and reimburse deferred income tax.
9. Annual Report
Both Wyoming LLCs and international LLCs that are allowed to do business in the state are required to file an annual report with the Secretary of State.
Both limited liability companies (LLCs) must pay an annual report license tax of the greater of (1) $50 or (2) two-tenths of one mill on the dollar ($.0002) depending on the company’s assets located and employed in Wyoming. The report and tax can be submitted either online or by mail.
The annual report and tax payment are due on the first day of the anniversary month of the LLC’s formation—for example, if an LLC was formed on June 15, the report and tax payment are due each year on June 1. If the report is not filed and the annual tax is not charged within 60 days of the due date, the LLC will be dissolved/revoked.
Benefits of Forming an LLC
Personal responsibility insurance and pass-through taxes are the two primary advantages of creating an LLC in Wyoming. We’ll proceed with the most significant. Personal responsibility insurance is a privilege provided by all businesses and limited liability partnerships.
It creates a “security shield” between the personal assets and the assets of the business. If the business is prosecuted, you cannot use your personal assets to pay off any loans or obligations. The second advantage is that pass-through taxation is available to llc, sole proprietorships, and partnerships.
Your business is not taxed on its own under this principle. Instead, all business gains or expenses are reported in an annual report on a personal tax return. You escape the downside that Corporations face: double taxation. Paying taxes at both the business and personal levels is referred to as double taxation.
Wyoming LLC vs Corporation
An LLC is Cheaper to Create and Maintain
Unlike a corporation, managing and forming an LLC does not cost a lot of money. The Wyoming Secretary of State charges a one-time filing fee of $50 to form an LLC. The Periodic Initial Annual Report, which is due once a year, costs just $10. It is therefore less costly to manage an LLC than it is to maintain a corporation.
An LLC has Less “Red Tape”
An LLC, unlike a corporation, is not burdened by strict organizational laws. It is not necessary to appoint a board of directors, employ business officers, or schedule business meetings. A business is liable for this.
An LLC is Not Subject to Double Taxation
As previously said, the gains and expenses of an LLC “pass in” on your personal federal tax return. That is not the case for a corporation, since its earnings are taxed twice. This ensures that earnings are levied at the corporation level, and then dividends are taxed again at the shareholder level.
A Wyoming limited liability company (LLC) is a “pass-through” organization. This ensures that the earnings are charged at the same pace as your own. The LLC does not file income taxes with the IRS. This is not to say that a Corporation has little potential for development.
This isn’t the case. They are simply more difficult to manage and are best fit for businesses that need to attract capital from outside investors. Consider technology and startup firms to start an llc.
To start an LLC could be a safer choice for business owners (especially those just starting out) who want to escape the hassle of operating a complicated business structure (but also want personal asset protection).
Wyoming LLC vs a Sole Proprietorship/Partnership
An LLC Member Enjoys Personal Liability Protection
An LLC provides a “shield of security” between your personal assets and the assets of your business. When the business is prosecuted, only the company’s funds will be used to compensate off the LLC’s debts. In brief, your personal belongings (bank account, home, vehicle, etc.) are safeguarded and secure in the event that the business is sued.
There is no other precaution for a single proprietorship. Since the law considers you and your business to be the same thing, your personal properties will be included if your business is prosecuted. The same holds true with a Partnership.
There is no different agency formed in this situation. When the business is prosecuted, your and your partner’s personal properties will be used to pay off its debts.
Get Business Insurance For Your Wyoming LLC
Business insurance enables you to control costs while concentrating on the success of your LLC. The below are the most popular forms of business insurance:
- General Liability Insurance: This is a large insurance scheme that covers the business against claims. The majority of small companies obtain general liability protection.
- Professional Liability Insurance (PLI) is a form of business insurance that protects cases of malpractice and other business negligence for professional service suppliers (consultants, accountants, and so on).
- Workers’ Compensation Insurance: A form of insurance that protects staff who are sick, disabled, or killed on the job. Workers’ compensation policy is required by statute in Wyoming for companies with one or more staff, except officers and LLC registered agent.
Create Your Business Website
Creating a website is a significant move toward legitimizing the business. Any organization requires a website. And if you believe the business is too limited or in an offline market, if you do not have a website, you are losing out on a significant portion of future clients and sales.
Some people may believe that designing a business website is out of their control because they lack website-building expertise. Although this was a legitimate problem in 2015, online technology has seen substantial strides in recent years, rendering the lives of small business owners even easier.
The below are the key explanations why you can not put off creating your website:
- Any legal business has a website, period. When it comes to bringing your business online, it doesn’t matter what size or sector it is.
- Social networking accounts, such as Facebook pages or LinkedIn business profiles, are not a substitute for a business website that you own and manage.
- Website builder software, such as the GoDaddy Website Builder, has made it incredibly easy to create a basic website. You don’t need to employ a web developer or designer to build a website you’re proud of.
Send Out a Press Release
Press releases are one of the simplest and most effective ways to advertise the business. They are still one of the least expensive tactics since they:
- Gives advertising
- Establish your brand’s online presence Boost your website’s search engine optimization (SEO), drawing more customers
- Are a one-off commitment in terms of time and resources
- Have long-term advantages
Wyoming LLC Tax Filing Requirements
If you’re selling a physical item, you’ll usually need to apply for a seller’s permit online at the State of Wyoming’s website. This credential entitles a corporation to receive income tax on taxable sales. The sales tax, commonly known as the “Sales and Use Tax,” is a fee imposed by governments, cities, and towns on commercial purchases including the exchange of such taxable products or services.
If you have workers in Wyoming, you must apply with the Unemployment Insurance Tax and the Employee Withholding Tax electronically at the State of Wyoming’s website.
Federal LLC Formation Tax Filing Requirements
Most of the LLC formation must file Form 1065 Partnership Return (most multi-member LLC use this form) and Form 1040 Schedule C with the IRS each year (most single-member LLCs use this form). Your federal taxes would be affected by how you pay yourself as an owner.
Avoid Automatic Dissolution
When an LLC fails to file one or more state reports, it can face penalties and even automatic dissolution. When this occurs, LLC shareholders run the risk of losing their LLC limited liability rights. A good licensed Wyoming registered agent service will help you avoid this by informing you of impending filing deadlines and sending information on your behalf.
If you want to recruit staff for your business, take these measures to keep in compliance with the law:
Confirm the prospective employers are qualified to serve in the United States.
- Employees can be reported to the state as “recent recruits.”
- Employees can be equipped with employees’ compensation benefits.
- Employee taxes should be withheld.
- Print workplace compliance posters and display them in high-traffic parts of the workplace.
The minimum wage in Wyoming
The Wyoming minimum wage stands at 7.25 USD per hour.
Frequently Asked Questions (FAQ)
Should I form an LLC?
If you are just starting out or have been working as a sole proprietor, you should think about creating an LLC. LLCs restrict an owner’s personal responsibility for business debts and claims and provide a great deal of flexibility in terms of business ownership, management, and taxation.
How do I know if my LLC name is available?
It is critical that the name of your LLC be distinct from the names of other existing companies on file with the Wyoming Secretary of State. To ensure that your proposed name is available, you can perform a free name search on the Wyoming SOS website.
How much does it cost to form an LLC in Wyoming?
The Wyoming Secretary of State charges a fee of $100 for filing the LLC Articles of Organization by mail and $102 for filing electronically. You may reserve your business name for $50 by submitting an LLC name reservation form. Wyoming LLCs are also expected to pay a report license tax of at least $50.
For more information on this levy, see our article on Wyoming LLC Annual Filing Requirements. Filing on your own is frequently the most cost-effective alternative, but completing all of the forms and filing them on your own can be difficult. Hiring a lawyer is another choice, but it will usually cost you hundreds, if not thousands, of dollars.
Do I need an operating agreement for my Wyoming LLC?
Wyoming does not mandate LLCs to have an LLC operating agreement, but it is strongly recommended that they do. An operating agreement will help protect your limited liability status, avoid financial and managerial misunderstandings, and ensure that you choose the laws that govern your business rather than state law by default.
Can a foreign LLC do business in Wyoming?
All LLCs formed outside of Wyoming must register with the Wyoming Secretary of State in order to conduct business in the state. For service of process, foreign LLCs must appoint a registered agent. The registered agent may be a Wyoming citizen or a business organization registered in Wyoming.
To enrol, go to the Secretary of State’s website and fill out an Application for Certificate of Authority. The application must be submitted via postal mail. The filing fee is one hundred dollars.
The application must be followed by the following documents: A signed written consent to appointment from the registered agent (this form is included with the Application), and a certificate of existence or good standing from the international LLC’s home state dated no more than 60 days prior to the filing in Wyoming.
Can I form a single-member LLC in Wyoming?
A Wyoming single-member LLC is treated the same as a multi-member LLC for most purposes of creation. The procedures for forming a single-member LLC in Wyoming are the same as those outlined above. When it comes to filing a tax return, single-member LLCs have more leeway.
Can I form a professional LLC in Wyoming?
If you wish to form a Wyoming LLC in Wyoming and provide a licensed professional service, you must first form a professional limited liability corporation (PLLC). Architects, lawyers, dentists, certified public accountants, and other professionals are examples of professional services.
In general, if you offer a service that necessitates obtaining a Wyoming state license before practising, you are providing a skilled service. To form a PLLC, each member of the business must be approved.
Can I dissolve my Wyoming LLC when I’m done?
If you decide to shutter the business and end all activities, you can properly disband your LLC to reduce your responsibility for claims and government fines.
If you want an easy, low-cost business that covers your personal properties in the event of litigation, then forming an LLC is definitely the best choice for you. If you want a business that is easy, affordable and protects your personal belongings, an LLC is a right choice for you.
Starting a business correctly doesn’t have to be difficult. With over 15 years of experience consulting new businesses and start ups, Matthew is probably the best person to help you set a strong foundation for your business.