A limited liability corporation is one of the best legal structures to have, even if you\u2019re a one-person business.<\/p>\n\n\n\n
LLCs give you legal protections that you wouldn\u2019t have as a sole proprietor. The big question that many business owners have is where to incorporate.<\/p>\n\n\n\n
Delaware always comes up because of its court system, which is very business-friendly. However, one place that\u2019s overlooked is Wyoming. Yes, Wyoming.<\/p>\n\n\n\n
Believe it or not, a Wyoming LLC holds many advantages over other states. Read on to learn what they are and how to form an LLC in Wyoming.<\/p>\n\n\n\n\n\n
Wyoming is one of the few states that doesn\u2019t have a business or personal income taxes. This is great news for businesses that are taxed as pass-through corporations, like S-Corps.<\/p>\n\n\n\n
In most states, your business would have to pay state and federal taxes on your business income. You would collect a salary and pay income taxes on the money you earn from your LLC.<\/p>\n\n\n\n
In Wyoming, you wouldn\u2019t have to pay state income taxes on your business profits.<\/p>\n\n\n\n
If you have a single-member LLC, that\u2019s taxed as a pass-through income. You would show your profit and loss on your personal tax returns by using Form Schedule C. You\u2019d still pay income taxes in the state where you live.<\/p>\n\n\n\n
When you\u2019re a sole proprietor, you and your business are treated as one and the same in court. Should someone sue your business, your personal property would be at risk. You could lose your home, car, and savings in such a lawsuit.<\/p>\n\n\n\n
People form LLCs because of the corporate veil, which legally separates you from your business. Most states require that you operate your business in a certain way or the corporate veil wouldn\u2019t apply.<\/p>\n\n\n\n
That\u2019s called piercing the corporate veil. Wyoming\u2019s laws are business-friendly, which makes it very difficult for someone to pierce the corporate veil and go after your personal belongings in court.<\/p>\n\n\n\n
One thing that you do need to be aware of is if you operate your business or your residence is outside of Wyoming, a judge may defer to the laws of that state. However, most states will apply the law where your entity was formed, which would be Wyoming.<\/p>\n\n\n\n
Sole proprietorships are the most common business entity<\/a> because many people think it\u2019s too hard or too expensive to form an LLC.<\/p>\n\n\n\n