Are you an entrepreneur looking to introduce your business idea to the Wyoming market? Then you are at the right place! The step would be for you to decide on a business structure. A Limited Liability Company (LLC) can be your ideal choice. An LLC provides excellent flexibility in your operations and has many tax benefits.
Wyoming is a great place to set up your LLC. The State was ranked number one by the tax foundation in their 2021 state business tax climate index. Starting an LLC in the State is more cost-effective than setting up a Company.
However, the procedure to set up your LLC in the State may seem tedious and confusing. This article will guide you through all the steps involved in successfully incorporating an LLC in Wyoming.
Naming Your Wyoming LLC
Your journey to set up an LLC will start with selecting a name for your business. The name of your LLC becomes its identity. A good name will help your LLC to have brand value in the market. So, make sure that it is unique and not similar to the names of other businesses. The name should be simple and something that strikes a chord with your potential customer base.
While naming your LLC, you must follow all the naming guidelines Wyoming has laid down.
The name that you choose for your LLC should contain the words “limited liability company,” or its abbreviations “LLC” or “L.L.C.,” “limited company,” or its abbreviations “LC” or “L.C.,” “Ltd. liability company,” “Ltd. liability co.” or “limited liability co.”
The name should not contain any words that imply a purpose other than for which your LLC is formed. For example, you cannot name your LLC “XYZ Bank LLC” unless you have a banking license.
The name you choose should not be identical or deceptively similar to an existing entity’s name.
The name you choose should not imply that your LLC is incorporated under the Wyoming Business Corporation Act, the Wyoming Statutory Close Corporation Supplement, or the Nonprofit Corporation Act.
Make sure that the name you select for your LLC does not contain the words “F.B.I.,” “Treasury,” or any such names that may give an impression that your business is a part of a government agency.
To get a deeper understanding of the naming rules prevailing in Wyoming, you can read WY Stat § 17-29-108 (2021).
Does Your Business Require a DBA?
After incorporating your business at a later stage, you may feel the name you have selected for your LLC is unsuitable for the new market you are planning to enter or for a new product you are planning to launch. This is where a DBA can become helpful.
A DBA (doing business as) or an assumed name enables you to operate your LLC under a different name. In Wyoming, a DBA is referred to as a “Trade Name.” The trade name you opt for in your LLC should not have any business entity type suffix (for example, LLC, Crp. etc.). Similarly, using restricted words like bank, school, or university cannot be done unless you take approval from the concerned authorities in the State.
You can register your trade name in the State by mailing your application to the Wyoming Secretary of State. But remember that the trade name alone does not protect your personal assets. To avail of the protection of limited liability, you need to form an LLC.
Apply for a DBA by MailDownload Form
Wyoming Secretary of State
2020 Carey Avenue, Suite 700
Cheyenne, WY 82002-0020
Doing a Name Search and Name Reservation
As the naming guidelines mandate, you must ensure that your LLC’s name is unique. You can use the State’s Business Entity Search to see if your desired name is available. However, it is recommended that you properly check the name selected for your LLC to avoid rejection later on.
Once you have thoroughly checked the name availability and decided on the name for your LLC, you can reserve the same. You have to apply to the Secretary of the State for this purpose. If the name selected by you satisfies the naming guidelines, it will be reserved for 120 days by the office of the Secretary of State.
Reserve Your Name by MailDownload Form
Wyoming Secretary of State
2020 Carey Avenue, Suite 700
Cheyenne, WY 82002-0020
Registering your business domain
Online businesses are gaining popularity by the day. Even if you do not immediately plan on starting a website for your presence, you should plan for having an online presence. The first step toward setting up an online presence for your business is to get a domain name.
Your business’s website address needs to match your LLC’s name. Your website address is how customers find you online. So before you select a name for your LLC, it is recommended that you ensure that the website address you need is also available.
You may do so by checking the currently available domain names.
Choose a Registered Agent in Wyoming
A registered agent is an individual or another entity registered to conduct business transactions in the State of Wyoming. A registered agent is the point of contact for your LLC. The registered agent shall be responsible for receiving all official communications addressed to the LLC.
A registered agent should be available during usual business hours. The agent shall be responsible for receiving communications addressed to the LLC and forwarding them to appropriate people within your LLC.
Who Can Be a Registered Agent?
The laws of Wyoming mandate that every LLC appoints a registered agent. The requirement of a registered agent and the qualification they should possess are provided through the provisions of W.S. 17-28-101. A registered agent you choose for your LLC must be
- An individual resident of the State above the age of 18 or
- A business entity that has obtained authorization to conduct business in the State.
The registered agent should be available during business hours on all working days and have a street address in Wyoming. To understand the entire provisions regarding registered agents in Wyoming, please read W.S. 17-28-101.
Individual v. Registered Agent Service
The laws of Wyoming allow you to appoint yourself, a friend, a family member, or any other individual within your LLC as the registered agent. Alternatively, you may also opt for a professional registered agent service. Selecting yourself as the registered agent may not be advisable for all businesses. Using a professional registered agent service has many advantages.
A professional registered agent service ensures that you don’t fail to duly respond to any notice or other communication that may be sent to your LLC. They remind you when your returns and other filings are due and help ensure you don’t miss any deadlines.
The registered agent’s address is available for the public to access on the concerned websites. So if you work out of your home or a private office, having a professional registered agent service will help you maintain privacy. Hiring a registered agent service also helps you focus your energy and time on core business areas.
If you are your own agent, you risk receiving sensitive documents like notice of a lawsuit in front of your employees or clients. Having a professional registered agent service helps you handle the situation discreetly. They receive such sensitive documents at their address and deliver them separately.
The laws in the State of Wyoming mandate a registered agent be elected at the time of formation of the LLC. The details of the registered agent should be provided in the Article of Organization that you file with the State.
You may change the registered agent for your LLC at any time by filing the Change of an Entity’s Registered Agent and Office form with the office of the Wyoming Secretary of State Herschler Building East, Suite 101 122 W. 25th Street Cheyenne, WY 82002-0020.
File the Article of Organization for your Wyoming LLC
Articles of Organization is a legal document needed to form and legally incorporate your LLC officially. It is to be filed with the office of the Secretary of State.
You should provide the following details about your LLC in the articles of organization:
- Entity Name
- Registered Agent Name and Registered Office Address
- Mailing and Office Address
You have to file the articles of organization with the office of Wyoming’s Secretary of State. You can do the same online or by submitting a copy of the duly filled form through the mail.
As of now, the State of Wyoming does not have any provisions pertaining to expedient processing of your Certificate of Organization. However, applications are usually processed within 3 to 5 working days.
Public Notice of Formation
As of now, the State does not have any provisions pertaining to a mandatory public notice of formation for your LLC.
Creating an Operating Agreement for Your Wyoming LLC
An operating agreement contains the rules of your LLC’s internal operation and functioning. It also provides a framework concerning the duties of members of the LLC and its managers. An operating agreement acts as a guiding force in matters of the day-to-day functioning of the LLC.
The laws in Wyoming do not mandatorily require an operating agreement for an LLC. However, irrespective of the nature of your business, it shall be advisable for your operating agreement.
An operating agreement offers credibility to your enterprise. Once you form your LLC, you will need an operating agreement to open an account in the bank. More importantly, an operating agreement helps to protect the limited liability status of the LLC by reinforcing it.
There are no prescribed templates for an operating agreement. Accordingly, you may draft one according to the needs of your business. Your operating agreement should ideally cover the following aspects:
- Organization Details
- Duties of Members and Managers
- Management and Voting
- Capital Contributions
- Division of Profit and Losses
- Bookkeeping Procedures
- Procedure for adding new members
- Requirements concerning Meetings and Procedures thereof
If your LLC does not have an operating agreement or if the operating agreement is silent concerning the duties of the members or their conduct, then the provisions as contained in Chapter 29 of the Wyoming Limited Liability Company Act shall apply to your LLC by default.
Writing the Operating Agreement Yourself vs. Hiring a Service
You can create your operating agreement, or you can purchase templates that you can customize to draft the operating agreement of your LLC. It is, however, recommended that you seek the help of an attorney or a professional in preparing your operating agreement. Being experts in Wyoming laws, these attorneys or professionals will help you draft an operating agreement that suits the needs specific to your business model.
Limits of Operating Agreement
There are no specific formats for an Operating Agreement. However, it cannot include any matters prohibited under Wyoming law. For example, your operating agreement cannot vary the LLC’s right to sue and be sued, eliminate the responsibility to perform a contract entered into in good faith, etc. For a complete list of various limitations of an operating agreement, read WY Stat § 17-29-110 (2021).
Obtaining an EIN for your Wyoming LLC
EIN (Employer Identification Number or Federal Identification Numbers or FEINs) is an identification number allotted by the IRS. The IRS uses the EIN to identify an operating business entity for taxation purposes.
It is mandatory by law to obtain an EIN if you fall in one of the below categories:
- Your LLC has a business structure like a partnership or a corporation.
- Your LLC has employees.
- Your LLC withholds taxes for non-wage income paid to a non-resident alien.
- Your LLC files excise taxes.
It will also be necessary to open a bank account, file tax returns, and hire employees. The IRS issues an EIN, and you can apply for it online or through the mail.
File Annual Report for your LLC in Wyoming
An annual report is a document mandatorily required to be filed by an LLC in Wyoming. The document is to be filled out annually. It is used by the authorities in the State to get the latest and updated information about all the business entities operating in the State.
The Annual reports should contain details of the LLC, its capital, property, and assets in Wyoming, the address of its principal office, etc. The financial information you provide in the report should be as per the last fiscal year, immediately before the year in which the LLC is filing the annual report.
In case the annual report filed by you has any information missing or is lacking in some other way, the Secretary of State shall inform you of the same. You will then have to rectify the shortcomings or errors in the annual report and file it again.
Wyoming also requires LLCs to pay an annual license tax when filing the annual report. The amount of tax is $60 or 0.0002% of the value of all LLC assets, whichever is higher. While you can file your annual report online, if your annual license tax amount exceeds $500, it must be filed by mail after completing the online filing process.
The due date for filing the report is the first of the month in which you incorporated your LLC. For example, if your LLC was incorporated on the twenty-sixth of April 2021, your first annual report is due on the first of April 2022, and after that, every year on the first of April.
If you miss your deadline to file the annual report and the failure continues for more than 60 days, you risk having your LLC shut down by the State authorities.
You can file your annual report online using the Secretary of State’s website.
Tax Liability for Your Wyoming LLC
The tax liability of your LLC will depend on the business you’re doing in the State. There are four ways in which LLC will be taxed:
- Sole proprietorship: a business owned by a single person
- Partnership: a business owned by multiple people
- C – Corporation: income is split or segregated for taxation
- S – Corporation: tax liability is split between the business and its owners
Federal Tax Liability
LLCs are, by default, treated as ‘pass-through’ entities for tax purposes. It means the LLC itself does not pay a tax, but as a person who owns an LLC, you are required to pay Federal self-employment tax (which is presently 15.3%) on the profits you take out from your LLC.
You are eligible for certain deductions in the nature of business expenses. You are also liable to pay Federal Income Tax. The amount of the Income Tax you have to pay will vary depending on your income, filing status, deductions, etc.
If your LLC has more than one member, it will be taxed as a ‘partnership’ by default. In this case, apart from filing Form 1040, you’ll have to file your partnership return in Form 1065 and provide information in the K-1 form of each partner.
State Tax Liability
At the State level also, an LLC is, by default, treated as a ‘pass-through’ entity. However, Wyoming is one of the few States which does not impose a State income tax or State Corporate Tax. An LLC is only liable to pay an annual license tax when filing the annual report. The amount of tax is $60 or 0.0002% of the value of all LLC assets, whichever is higher.
Additionally, if, through your LLC, you plan to sell certain specific goods or provide certain services, you will need to collect and remit sales tax to the State. For this purpose, you will need to obtain a seller’s permit for your LLC.
If your LLC has hired employees, you must sign up for Unemployment Insurance Tax with the Department of Workforce Services, Wyoming.
Permits and Licenses
An LLC should follow State and Federal Regulations and get permits that apply to its business. As an LLC operating in Wyoming, your business will be subject to federal, state, and local licensing jurisdictions.
Federal Licensing requirements will depend on the business activity carried on by your LLC. If your company is engaged in any area of business regulated by the Federal Government, you will be required to obtain relevant Federal Licenses and Permits.
Some business activities requiring Federal Licenses and Permits are:
- Alcoholic beverages
- Firearms, ammunition, and explosives
- Fish and wildlife
- Commercial fisheries
- Maritime transportation
- Mining and drilling
- Nuclear energy
- Radio and television broadcasting
- Transportation and logistics
The State of Wyoming does not require you to obtain general business licenses. But, depending on your business through your LLC, you may be required to get a specific license, permit, or certification. You may read the Business Permitting and Licensing Guide the Wyoming Business Council provided to understand your LLC’s State licensing requirement.
You also need a sales tax license if your LLC sells specific goods or services. You can visit the Wyoming Internet Filing System for Business to get your LLC’s seller’s permit.
Depending on where you operate your business, you may also be required to get the local government’s license and permit. In Cheyenne, certain businesses are required to have a specific city license. To know more about local licensing requirements, get in touch with the office of your town or county government.
For more information regarding;
- Business Permitting and Licensing Guide
- Professional Licensing Requirements
- Federal Permits and License
Business Bank Account & Phone Number
It is always prudent to open a separate Bank Account for your LLC and have a separate designated phone number. Having a separate account helps you to avoid mix-ups and helps ensure that your assets are not affected in case of insolvency or lawsuits. Your bank will require your LLC’s EIN, among other information, for it to open a bank account. Many network providers offer business/enterprise plans depending on your LLC’s needs.
Using your phone number for your LLC can prove to be very inconvenient. It threatens privacy by putting your personal contact information in the public domain. You might end up missing essential calls on account of being busy elsewhere.
It is best to either get a separate phone number for your business or hire a phone answering service. Doing this would protect your privacy, look professional and reduce the risk of missing important calls. Most network carriers offer various business plans; check and confirm the plan best suits your LLC.
Wyoming is an excellent choice for your LLC. The State does not impose any income or corporate tax.
Additionally, the State provides favorable tax exemptions through programs like the Manufacturing Sales Tax Exemption scheme and the Sales Tax Exemption on electricity consumption in Manufacturing. Get in touch with your local county or city government office to determine if your LLC is eligible for any of these incentives.
On completing the above steps, your LLC is legally incorporated and ready to do business. However, once you form your LLC, you should hold your first meeting to authorize opening a business bank account, applying for business credit, and obtaining requisite insurance for your business.
We wish you and your new business the very best!