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Limited Liability Companies LLC’s
The Majors Law Firm, P.C. can assist you and your business with the formation of a Wyoming Limited Liability Company or Wyoming Close Limited Liability Company.
Benefits of Forming a Wyoming Limited Liability Company:
- Privacy. Wyoming does not require the names of the Managers of Members to be listed in the Articles of Organization and is not of public record on the Wyoming Secretary of State’s Website. The only information that is required to be listed in the Articles of Organization (Formation Document) is the: Name of the LLC; Name and Physical Address of the Registered Agent; Principal Mailing Address of the Company; and Physical Address of the Company. Our Virtual Office package can offer a physical and mailing address for the Company, so that no public identifying information regarding the Members or Managers of the Company will be of public record.
- Added Creditor Protection for Single Member LLC’s. On July 1, 2010, the Wyoming Legislature revised the Limited Liability Company Act to provide that the charging order is the exclusive remedy for single member LLC’s. This revision provides additional creditor protection for single member LLC’s, not otherwise provided by other state Limited Liability Company Acts, and enhances creditor protection for Wyoming LLC’s and single member LLC’s.
- Low Filing Fees and Annual Report Fees. The filing fees for the formation of a Wyoming Limited Liability Company are $100. The annual report fee is $50.00, provided that the assets of the Company 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 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. By way of example, the Wyoming Close LLC gives maximum protection as it mandates by statute that a creditor of a member of an LLC only has the rights of a transferee and that the charging order is the exclusive remedy by which a judgment creditor may satisfy a judgment.
A Limited Liability Company (LLC) is a hybrid of a corporation and a partnership in that it combines the most favorable characteristics of each. It allows the pass-through of income, deductions and credits without the pass-through of liability. The first state to enact LLC legislation was the State of Wyoming in 1977. Thereafter, other states began enacting LLC legislation, and all 50 states have now enacted LLC legislation. There is no uniform LLC law and each state’s laws currently differ. It is important to study the various laws to determine which jurisdiction best meets your goals.
The Basic Characteristics of a Limited Liability Company are as follows:
- A Limited Liability Company is a separate legal entity and is created by the filing of Articles of Organization with the Wyoming Secretary of State.
- The owners of the Company are called the Members, similar to Shareholders. The Corporation can have one or more Members. The Members can be individuals, other business entities, and trusts.
- The LLC can be operated by the Managers or Members, but is generally operated by the Managers.
- The Managers are in charge of overseeing the business affairs and operations of the Company.
- There may be one or more Managers, and the Managers and Members may be the same people.
- The LLC may conduct any and all business not otherwise prohibited by Wyoming Law.
- The LLC provides liability protection to its Members. This means that the Members are generally not personally liable for the debts and liabilities of the business. It is important to observe business formalities and to treat the business like a business. If business formalities are not followed, the creditor may be able to argue that the Members of the Company should be personally liable and responsible for the debts and liabilities of the business, subjecting the Member’s personal assets to judgment and collection. This is called piercing the corporate veil. In order to ensure that business formalities are followed:
- The Company should ensure that the Company is kept current and that annual reports are promptly filed with the State of Wyoming.
- The Company should consider holding annual meetings and keeping annual meeting minutes.
- The Company 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 Company should be done in the name of the Company. Any clients, customers, or renters of the Company should be aware that they are doing business with the Company and not with an individual Member. This can be accomplished by ensuring that all contracts, agreements, business cards, signs, and letterhead are in the name of the Company and include the designation “LLC” or “Limited Liability Company.”
- Depending upon the number of Members and tax classification of the LLC, the LLC may have a separate tax id number. If the LLC is a single member LLC, the LLC may use the sole member’s social security number as the tax id number of the Company.
- The LLC should open up a separate bank account. Banks will typically need to see a copy of the Article of Organization and the tax id # for the Company. The Manager is usually the signor on the bank account.
In addition to the creation of new business entities, the Majors Law Firm, P.C. also assists clients with the management and ongoing operations of the business, including holding annual meetings, mergers and acquisitions, buy sell agreements, asset purchase agreements, license agreements, filing of annual reports, contracts, securities, dissolutions, gifting and business valuations.
Contact the Majors Law Firm, P.C. to learn more about establishing a Wyoming Limited Liability Company.
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