There are many considerations that every business owner makes when deciding how to form their business. One of the most important considerations is which state to incorporate the company. Below we take a closer look at 5 reasons Doola suggests Wyoming as preferred state for LLC incorporation – and how the super fast Doola company formation API can take care of incorporation in seconds.
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Many states offer compelling benefits but none are quite as enticing as Wyoming. Wyoming has been ranked as the state with the friendliest tax climate for business since 2013. In addition to this, Wyoming is a generally very business-friendly state with a highly favorable environment in which to conduct business. Wyoming offers many unique advantages to LLC formation in the state which will be discussed below.
1. Privacy
Wyoming takes privacy very seriously and this is particularly true of the manner in which it handles LLC formation. The personal information of LLC owners and members remains confidential because the state does not require this information to be a matter of public record. In addition to this Wyoming allows LLCs to appoint a nominee manager or director of the LLC. This allows a business to nominate an individual to be the representative of the business and have their details appear on public records. This individual does not have any authority over the business if the owner of the LLC does not wish them to. They merely act as a public representative of the business in order for the owners or members of the LLC to be able to operate the business with the utmost degree of privacy.
2. Lack of Formalities
A Wyoming LLC has a comparatively low level of formalities required for its formation and upkeep. This is particularly true when compared to the high level of formalities required by a corporation. Wyoming has a straightforward LLC formation process which does not require any additional work on behalf of the owner. Wyoming is much simpler than a state like New York which requires LLC to place advertisements in newspapers in order to complete their incorporation process. The only requirement which Wyoming LLCs have is the filing of an annual report and payment of a small yearly fee.
3. Lack of Taxation
Wyoming does not impose tax at state level on personal or business income. In addition to this Wyoming does have a stock tax, corporate tax or franchise tax. These benefits make Wyoming an exceptionally appealing state in which to conduct business. The savings which business owners can receive in terms of tax can be tremendous and all of this extra income can be used as the owner sees fit. For example the owner can use the money they save on tax to further invest in their business and drive growth. The lack of taxation also helps LLC owners avoid double taxation as they do not need to worry about taxation on their business income.
4. Asset Protection
LLCs provide limited liability asset protection to their owners. This means that the owner of an LLC cannot be held liable for debts or other liabilities which the business may incur in a personal capacity. Similarly, if the owner runs into liabilities the business cannot be held liable for the personal liability of the owner. In some cases this protection can be removed which is called piercing the corporate veil. However, Wyoming has very strict policies in this regard and only allows the corporate veil to be pierced if there is criminal wrongdoing on behalf of an LLC owner or member.
5. Flexibility
Wyoming LLCs provide a great deal of flexibility to their owners. Wyoming has lenient regulations regarding profit distribution in LLCs and allows a lot of flexibility when it comes to the LLC operating agreement. For example, an individual who owns only 10% of an LLC can be able to receive 20% of the profit which the company generates if this is included in the operating agreement of the LLC. In addition to this flexibility, someone living in a state other than Wyoming can own and operate a Wyoming LLC if they choose to do so. This allows non-Wyoming residents to be able to benefit from the highly favorable business climate of Wyoming without needing to live in the state itself.
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For more information regarding LLC formation and forming an LLC in Wyoming specifically consult Doola’s website. It now has the fastest API in the world for launching a new LLC, making it possible in seconds – in fact, user tests have shown that it is faster than Zen Business, Rocket Lawyer, LegalZoom and any major provider – backed by almost 200 Doola reviews on Trustpilot that outranks even the best LLC formation companies.
Doola was co-founded by JP Pincheira and Arjun Mahadevan who is a former product manager at Dropbox and an alum of the Wharton School of Business. He has a very hands on approach to the company and has personally processed over 100 applications and spoken to 500 customers.
As some of the supporters who back Doola suggested: “…For any business, whether it’s a venture-backed SaaS startup with a Delaware C Corp or a solopreneur bootstrapping an e-commerce business, having a trustworthy, stable, and scalable banking + payments stack is critical. Through Doola, international founders can seamlessly access the US financial ecosystem, including US banking, US payment solutions, US venture capital, and more”. (Jacqueline Reses Founder and CEO at Post House Capital, Chairman of the Economic Development Council at Federal Reserve Bank of San Francisco, Former Head of Square Capital)
Final Thoughts
There are a great deal of benefits to incorporating an LLC in Wyoming some of which have been outlined in this article. Wyoming offers an unparalleled degree of privacy for LLC owners and members thanks to the state’s strong commitment in this regard. Wyoming LLCs are not subject to the same level of formalities as corporations or LLCs in other states.
The Wyoming tax burden is very low as the state does not tax personal or corporate income. Wyoming LLCs offer excellent asset protection and protection against the piercing of the corporate veil. Flexibility in Wyoming is top notch with a great deal of variability allowed in the manner in which the LLC is setup in the operating agreement.
