Approximately one-third of Wyoming’s employment comes from small businesses. Are you thinking about starting a business of your own and helping to boost your state’s economy?
When it comes to starting a business in Wyoming (or anywhere, for that matter) there are a lot of things you need to keep in mind. This includes the type of business structure you’re going to have.
An LLC (short for limited liability company) is one of the most popular options to consider. Read on to learn all the benefits of forming an LLC in Wyoming.
What Is an LLC?
Limited liability companies (or LLCs) combine the elements of several business structures, including partnerships, sole proprietorships, and corporations. They ensure that business owners do not find themselves held personally liable for any debts or liabilities their company might have.
LLCs can be owned by one person or several people. These owners are known as LLC “members.”
If one person owns an LLC, it’s considered a single-member LLC. If multiple people own it, it’s considered a multi-member LLC.
If an LLC has to file for bankruptcy, the members don’t have to use their personal money to pay off the debts. If the company faces a lawsuit, the members also don’t risk losing their homes or personal assets.
The IRS treats LLCs like sole proprietorships or partnerships as far as taxes are concerned. The owners list profits and losses for the business on their personal tax returns rather than paying separate income taxes.
Benefits of Forming an LLC in Wyoming
There are lots of reasons to choose an LLC over another business structure. The following are some of the greatest advantages an LLC has to offer:
There are already a lot of risks associated with starting a small business. The last thing you want to have to worry about is being held liable for business matters and having to put your own assets on the line.
Luckily, forming an LLC protects you from personal liability and ensures that, if something goes wrong, you won’t lose your house, your car, or anything else you own. This protects you, your business partners, and your family.
There’s a lot of flexibility when it comes to tax filing as an LLC. You can list income and losses on your personal tax returns, as was mentioned above. You can also file taxes as a corporation if you prefer.
There are benefits and drawbacks to each of these filing styles. It’s best to talk to your accountant to figure out which one is a good fit for you.
Forming an LLC is much easier than forming other types of businesses. The process is pretty straightforward (as you’ll see in a minute), and you don’t have to wade through stacks and stacks of paperwork.
In addition to being easier to form, the lack of required paperwork also makes LLCs easier to keep in good legal standing. You’ll be less likely to make an error that could end up getting your business in trouble.
Access to Business Loans
Once you form an LLC, you’ll have an easier time getting funding for your business, too. Having those three letters listed after your business name gives you credibility and shows lenders that you’re the real deal. They will be more inclined to approve your loan applications and work with you to get your company up and running.
How to Form an LLC in Wyoming
Okay, you’re convinced than an LLC is the right business structure for you. How do you form one, though? Here are the steps you’ll need to take:
Choose a Name
Start by choosing a name for your company. Do some research to make sure there aren’t already any businesses in Wyoming that have the same name you’re hoping to use.
Keep in mind, too, that Wyoming allows you to reserve a name for up to 120 days. To do this, you must file an Application for Reservation of Name with Wyoming’s Secretary of State and pay a $50 fee.
Appoint a Registered Agent
A registered agent is a person or entity who agrees that they will accept the legal papers on behalf of the LLC if the company gets sued. The agent can be a Wyoming resident or a Wyoming business entity. They must have a physical Wyoming address.
File Articles of Organization
Next, you must file articles of organization for your business. These articles must include the following:
- The name and address of your registered agent
- The mailing address of your LLC
- The principal office address of your LLC
- The signature and contact information of your LLC’s organizer
You must also include written consent from your registered agent. You can file these articles by mail or online. It costs $100 to file by mail and $102 to file online.
Create an Operating Agreement
After your articles of organization, you’ll need to create an operating agreement. This explains how your business will be run, the roles of the members, and how you will file your taxes.
Comply with Tax Requirements
Speaking of taxes, make sure you comply with state and federal tax requirements, too. If you have more than one member, you’ll need to file for an employer identification number (or EIN). You may also need to file for a business license and register with Wyoming’s Department of Revenue if you plan to sell goods and collect sales tax.
File an Annual Report
Businesses in Wyoming must file an annual report each year. They must also pay an annual report license tax of $50.
Don’t Be Afraid to Ask for Help
The process of forming an LLC isn’t too difficult. As the experts who run this website have pointed out, though, you shouldn’t be afraid to ask for help if you run into trouble. Getting help early will save you a lot of time (and possibly money) later on.
Form an LLC Today
Now that you know more about the benefits of forming an LLC in Wyoming, as well as how to form one, it’s time to get to work. Follow the steps listed above and you’ll be well on your way to creating a thriving business in the Cowboy State.
Do you want to learn more about starting or running a small business? If so, there are tons of helpful resources available on our site. Check them out today!