Wyoming LLC vs. Corporation: Which to Form

Same state cost, different paperwork

In Wyoming, both an LLC and a profit corporation pay $100 to form and the same annual license tax: $60 or $0.0002 of Wyoming assets, whichever is greater. So the choice comes down to how you want to own and run the business, and how you want to be taxed.

An LLC is governed by its operating agreement and can be member-managed or manager-managed. A corporation has shareholders, a board and officers, adopts bylaws, and its annual report lists the officers and directors.

Source: sos.wyo.gov

Wyoming features that only LLCs get

Close LLC status (W.S. 17-25), protected series (W.S. 17-29-211) and DAO status (W.S. 17-31) are all LLC tools. If any of those is part of your plan, the LLC is the answer. A corporation fits better when you want to issue stock to investors, grant equity to employees under a stock plan, or keep a conventional board structure that outside investors expect.

Either one can elect S corporation tax treatment with IRS Form 2553 if it qualifies, so taxes alone rarely force the choice.

Source: wyoleg.gov

Records either way

An LLC keeps its operating agreement, member ledger and written consents. A corporation keeps bylaws, minutes, share ledger and stock certificates. Both keep the records behind each annual report for three years. A corporate or LLC kit with a seal and certificates is one way to keep that paper trail in one place.

Source: wyoleg.gov

Who runs it, day to day

In a member-managed LLC, the owners run the company directly. In a manager-managed LLC, named managers do, which suits owners who want to invest without taking part in decisions. A corporation always separates the roles: shareholders elect directors, directors appoint officers, and officers run the business. The corporation's Wyoming annual report names its officers and directors, so that structure is on the public record.

If you are a single owner who wants simple paperwork, the LLC usually wins. If you expect to issue shares, bring in investors who expect a board, or grant stock options, the corporation is the more familiar vehicle.

Source: wyoleg.gov

Selling, adding owners and closing

Selling a corporation usually means transferring shares, which is simple when the stock ledger is in order. Adding an owner to an LLC means admitting a member under the operating agreement, and a close LLC deliberately makes transfers hard. Closing either one requires winding up, paying debts and filing a $60 dissolution with the state.

Whichever you pick, Wyoming's annual license tax is the same: $60 or $0.0002 of Wyoming assets, whichever is greater.

Source: sos.wyo.gov

If you pick one and later want the other

Changing entity type later is possible but means new filings, new records and often a new EIN. If you are torn, write down who will own the company in three years and how you expect to pay yourself, then pick the structure that fits that picture rather than today's.

Source: wyoleg.gov

The numbers side by side

Formation: $100 to the state for either. Our service: $149, $299 or $399 for either. Annual report: $60 minimum license tax for either, plus $129 if we file it. Amendment: $60 for either. Dissolution: $60 for either. Reinstatement for missed taxes: $100 plus the delinquent tax for either. The one difference in the fee schedule is reinstatement after losing a registered agent: $350 for an LLC and $250 for a profit corporation.

Source: sos.wyo.gov