It’s true that Delaware and Nevada have great reputations for business, but Wyoming is the best kept secret of American business. Wyoming has long been a leader in business formation (such as when we created the LLC structure in 1977), and in crafting clear, specific laws to protect business owners (our statutes state that charging orders are the ONLY option open to creditors).
Really, the question should be: Why not Wyoming?
The Advantages of Forming a Wyoming Company
Wyoming vs Delaware
Delaware is well-known as the Incorporation Capital of America. More than 60 percent of Fortune 500 companies are incorporated in Delaware, and for good reason. Delaware’s long history of corporate case law is of great advantage to massive, multi-national corporations. There is no real point to a small, medium, or large sized company incorporating in Delaware.
Unfortunately, Delaware is also a costly state to form a business in, something small and medium-sized businesses should consider. The real advantage to incorporating in Delaware is for massive companies that might sue another massive company in Delaware. They can look at the extensive case history and settle easier and with more knowledge of what the court would do. Delaware is no place for small, medium, or even large companies to incorporate. They will never take advantage of the real Delaware advantage.
In Delaware, you’ll deal with:
- Corporate income tax
- Personal income tax
- State Franchise tax
- Expensive annual fees ($300 to $175,000 a year in annual report fees)
- Higher filing and renewal fees
- Reporting requirements
- Regulations compelling disclosure of your information
- Insanely expensive lawyers
- The Corporations Division accounts for almost a third of the state’s budget
- No corporate tax
- No personal income tax
- No franchise tax
- Low annual fees
- No share certificates required
- Minimal filing fees
- No business license fees
- Reasonably priced lawyers should you need one
Wyoming vs Nevada
Oddly, Nevada has a strong reputation as a pro-business state with a dedication to privacy protection. But there is no privacy in Nevada and it’s an extremely expensive state to do business in (for corporations especially) compared to Wyoming.
Nevada’s Hidden Fees:
- After forming a corporation in Nevada, you’re required to file an initial officer list by the last day of the month following your incorporation date (if you filed on Feb. 1st, the list would be due on the last day of March) and costs $150. The same report is due at the end of your anniversary month each year from then on (this is in addition to the annual business registration fee). When you file annually, the filing fee is based on the amount of shares the corporation has authorized. Most corporations will spend $150 to $400 on this annual fee, but corporations could spend upwards of $11,000, as it’s based on authorized shares.
- In addition to the Annual List of Officers/Members, you are also required to file an annual business registration (formerly known as the business license). The fees are $200 annual state business registration fee for LLCs, and a $500 annual business registration fee for corporations.
- Similar to Delaware, corporation filing fees in Nevada are based on the amount of shares authorized. You could pay up to $35,000 in filing fees, though most will pay between $75 and $375 just to start a corporation.
Nevada’s Secretary of State maintains a business database that allows anyone to search by name to find business owners. That’s right. Want to know who owns what in Nevada? You can find the names without any trouble.
It’s true that Nevada is the only state in the union that does not share information with the IRS. There is a degree of privacy there, but at what cost? The IRS remains deeply unhappy about Nevada’s non-reporting, and naturally they are suspicious about companies formed in Nevada. But what does it matter? You don’t tell any state who owns a company, you just list members and managers for LLCs and officers and directors for corporations. In Nevada you have to list all this info for the public to see. Who cares about the IRS? The ownership information is already public.
In Wyoming, your privacy is real. It is protected by our legal statutes, our business structures, and our reporting system. We don’t antagonize the IRS. Instead, we offer legitimate privacy and asset protection. We protect you by utilizing the law, not by trying to act outside it. We also simply don’t list your info online. You can form a Wyoming company without listing members or managers.
- No initial list after filing
- No business license fees
- No department of revenue for taxes
- No listing of your members or managers with the Secretary of State
- No Name-Based Searchable Database
- Real, legally protected privacy and asset protection