Wyoming, a Great Place to Become a Small Business Owner
Wyoming is definitely an ideal state for business formation. Wyoming offers amazing asset protection benefits as well as no state taxation. LLC and even corporate laws upheld in Wyoming are very business friendly and the state does not require decision makers and stakeholders like shareholders, managers, directors and officers to physically be present at meetings or even live in Wyoming. Wyoming even has laws that protect single members LLC through a key asset protection strategy called charging order procedure.
Outstanding Asset Protection
LLCs governed by the state of Wyoming are protected from lawsuits issued by plaintiff attorneys and creditors. Unlike other states, Wyoming made laws that protects even LLC with single members.
Maintains the Utmost Privacy
Wyoming does not require any LLC to give out the names of members and even managers on any kind of state public database. Privacy is highly valued by the state of Wyoming.
Could Out-of-State Courts Apply California Law to LLC Under Wyoming?
The protection that an owner of an LLC has greatly depends on the exact state that they incorporate with. Like in California, a state law can have the court issue an order whereby the LLC sells its assets in order to benefit the creditor. The court order will result to a judicial dissolution, also called a corporate death penalty and the termination of the LLC.
By setting up the LLC in a protection-friendly state, like Wyoming for example, all that’s left to do is to register in California.
When the courts in the state of California orders the LLC to sell their assets for, ultimately, the benefit of the creditor. In the end, the investment or business entity is necessarily dissolved. The power of the California court over a Wyoming LLC raised strong and valid arguments but ultimately, an LLC formed in Wyoming will be governed by Wyoming laws.
Where to Establish an LLC: Wyoming or Delaware?
Factors to Consider
At first glance, Wyoming and Delaware are great states to establish an LLC since they seem business-friendly. After a closer inspection and a bit of reading, one will be able to see the advantages and disadvantages of setting up a business in a specific state; these will depend on the business that one has in mind.
Creating an LLC in Wyoming, even for small businesses, is a good choice. The initial filing fee for setting up an LLC in Wyoming is relatively small and annual fees only add up to $50. On top of all those benefits, the LLCs in Wyoming are not required by Wyoming law to pay franchise taxes and income taxes; this is a huge advantages for businesses that are small or have only just started operating.
Meanwhile, Delaware has increased various fees which may seem like a small increase to some but it can persuade a potential owner from forming an LLC in Delaware.