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Wyoming Corporation | Wyoming Close Corporation
The Majors Law Firm can assist with the formation of a Wyoming Corporation, Wyoming Close Corporation, Wyoming Professional Corporation, or a Wyoming Close Professional Corporation.
The benefits of a Wyoming Corporation are as follows:
- Privacy. Wyoming does not require the names of the Directors or Officers to be listed in the Articles of Incorporation. The only information that is required to be listed in the Articles of Incorporation (Formation Document) is the: Name of the Corporation; Name and Physical Address of the Registered Agent; Principal Mailing Address of the Corporation; Physical Address of the Corporation; number and class of shares the Corporation will have the authority to issue; and the names and addresses of each incorporator/creator of the Corporation. The Shareholders of the Corporation are not required to be listed or disclosed in the Articles of Incorporation or in the annual reports.
- Our firm’s Virtual Office package can offer a physical and mailing address for the Corporation and can serve as the Incorporator, so that no public identifying information regarding the Officers, Directors, or Shareholders of the Corporation will be of public record when the Corporation is formed.
- Low Filing Fees and Annual Report Fees. The filing fees for the formation of a Wyoming Corporation are $100. The annual report fee is $50.00, provided that the assets of the Corporation located or employed in the state of Wyoming are less than $250,000. In the event that the assets located and employed in the state of Wyoming are greater than $250,000, then the annual renewal fee is equal to .0002% of the value of the assets located or employed in the state of Wyoming (this equals approximately $50 for every $250,000 worth of assets located in the state).
- No State Income Tax. Wyoming has no state income tax, corporate income tax, intangibles tax, franchise tax, or business license fee. Wyoming has consistently been ranked as one of the business friendliest states in the nation and as having one of the best state tax climates.
- Favorable Liability Protection and Creditor Protection. Creditor protection is one of the main reasons clients create business entities. Many state statutes only give nominal creditor protection for their business entities; however Wyoming has favorable creditor protection legislation.
The Basic Characteristics of a Corporation are as follows:
- A Corporation is a separate legal entity and is created by the filing of Articles of Incorporation with the Wyoming Secretary of State.
- The owners of the Corporation are called the shareholders. The Corporation can have one or more Shareholders. For certain types of Corporations, particularly S Corporations and Close Corporations, there are limits on the number of shareholders these corporations may have.
- The Corporation is generally governed by a Board of Directors. The Board of Directors is in charge of overseeing the business affairs and operations of the Corporation. The Board of Directors is elected by the shareholders of the Corporation at the annual meeting of the Corporation. There may be one or more directors.
- The day to day operations of the Corporation are typically managed by the Officers of the Corporation. The Officers may consist of a President, Vice President, Secretary, Treasurer, or Executive Officers. The Officers are appointed by the Board of Directors, and one person may hold one or more offices.
- The operations of the Corporation are governed by the Bylaws of the Corporation, which is created and agreed upon by the Shareholders of the Corporation.
- The Corporation may conduct any and all business not otherwise prohibited by Wyoming Law.
- The Corporation provides liability protection to its Shareholders. This means that the Shareholders are generally not personally liable for the debts and liabilities of the Corporation. It is important to observe corporate formalities and to treat the business like a business. If corporate formalities are not followed, the creditor may be able to argue that the Shareholders of the Corporation should be personally liable and responsible for the debts and liabilities of the Corporation, subjecting the Shareholder’s personal assets to judgment and collection. This is called piercing the corporate veil. In order to ensure that corporate formalities are followed:
- The Corporation should ensure that the Company is kept current and that annual reports are promptly filed with the State of Wyoming.
- The Corporation, Shareholders and Directors should consider holding annual meetings and keeping annual meeting minutes.
- The Corporation should not commingle business assets with the personal assets of the Members. A separate bank account should be maintained for the Company.
- All business of the Corporation should be done in the name of the Corporation. Any clients, customers, or renters of the Corporation should be aware that they are doing business with the Corporation and not with an individual Shareholder. This can be accomplished by ensuring that all contracts, agreements, business cards, signs, and letterhead are in the name of the Corporation and include the designation “Inc.” or “Corporation.”
- The Corporation will need to obtain a separate tax identification number with the IRS. The Corporation my elect to be taxed as an S Corporation or a C Corporation. There are many different factors to be considered when electing the tax classification of the Corporation, but most small business Corporations elect to be taxed as S Corporations.
- The Corporation should open up a separate bank account. Bank’s will typically need to see a copy of the Article of Incorporation, Bylaws, and the tax id # for the Corporation. The Officers are usually the signors on the bank account.
- The Corporation should also consider obtaining insurance for the Corporation.
Characteristics of a Wyoming Close Corporation
A Wyoming Statutory Close Corporation is similar to a regular Corporation; however, it is designed for closely held businesses. A Wyoming Close Corporation is generally more suitable for a small family Corporation or a closely held business. The main benefits and characteristics of a Wyoming Close Corporation are as follows:
- The Close Corporation is not required to observe as many corporate formalities as a regular Wyoming Corporation.
- The Close Corporation may eliminate the requirement for a Board of Directors.
- The Close Corporation need not hold annual meetings.
- The failure of a Close Corporation to observe the usual corporate formalities or requirements relating to the exercise of its corporate powers or management of its business and affairs is not grounds for imposing personal liability on the shareholders for liabilities of the Corporation.
- The Corporation is not permitted to have more than 35 Shareholders.
- The Corporation can place additional restrictions on the transfer of shares of the Corporation.
Given the less stringent requirements relating to observing usual corporate formalities, a Wyoming Close Corporation is typically recommended over a regular Wyoming Corporation.
Contact the Majors Law Firm, P.C. to learn more about setting up a Wyoming Corporation or Close Corporation.
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