Wyoming vs Nevada LLC – Which Is Better for You?

A limited liability company offers many advantages for business people inside and outside the U.S., especially when considering a Wyoming vs. Nevada LLC.

To learn more about the advantages or drawbacks of each of these LLCs, you first need to learn more about an LLC.

What is an LLC and Why Should I Consider a Wyoming vs. Nevada LLC?

The following details can provide you with further information on whether you should go with a Wyoming vs. Nevada LLC. Carefully consider the pros and cons before you contact a business attorney. I can help you with your company’s LLC formation. 

If you want to set up your business the right way, contact me at sam@mollaeilaw.com today. I can help you see why an LLC may work for your company’s formation. We can also discuss where to base your LLC – Wyoming vs. Nevada, or another state where you plan to do business.

Types of Business Organizations (Including the LLC)

First, let’s review the definition of an LLC. As a small business or a start-up company, you can choose to establish yourself as one of the following types of organizations:

A Limited Liability Company

This type of organization represents a hybrid form of business. In other words, it features both the characteristics of a partnership and corporation. Because an LLC is not incorporated, it cannot be considered a corporation.

Corporation

A corporation is an organization that is divided concerning its operations and ownership. The owners or stockholders are limited concerning company operations. An elected group of shareholders, called the Board of Directors, directs the company’s activities.

C Corporations and Subchapter S Corporations are set up with certain tax provisions in mind. Owners of C Corporations are double-taxed. In other words, the business is taxed and the owners/shareholders also pay tax on the dividends. 

Owners of corporations pay taxes on the earnings and losses on their tax returns. Therefore, owners may establish an S Corporation to avoid double taxation. Instead, they enjoy the benefits of flow-through or pass-through taxation.

*Pass-through taxation allows a company to avoid being taxed federally. Instead, the owners or shareholders are taxed on their designated share of the company’s income. Shareholders also do not have to remit self-employment tax on their share of the profits distributed to S-Corporation shareholders.

If you would like to know more about pass-through taxation, I can answer your inquiries. Just shoot me an email anytime. I can be reached quickly at sam@mollaeilaw.com.

Partnership

A partnership is owned by two or more people, each who contributes certain resources into the business entity. Profits are divided among the partners. 

Two Types of Partnerships

There are two types of partnerships:

• General partnerships are partnerships where the partners have unlimited liability. 
• Limited partnerships are businesses where creditors cannot go after the personal assets of the named partners.

This type of business enjoys pass-through taxation. In other words, the losses and profits are recorded on the owners’ tax returns.

Sole Proprietorship

This form of business is owned by one person. This is the easiest business to set up and is the least expensive form of business ownership. However, the owner faces unlimited liability. Creditors of the business can go after the owner’s assets if he or she defaults.

That is why you may find it in your best interest—as a small business or start-up—to review the pros and cons of establishing an LLC.

Now that you know the main types of business forms, you can look at the drawbacks and advantages of forming an LLC or weigh the pros and cons of establishing a Wyoming vs. Nevada LLC.

What Should I Consider When Forming a Wyoming Vs Nevada LLC?

If you are looking at the benefits and disadvantages of forming a Wyoming vs. Nevada LLC, you should compare the two entities, and see which one fits your business needs.

Reviewing the Differences

Let’s look at the differences between the major components of the LLCs.

Fees Assessed

You will pay less in fees if you establish a Wyoming LLC. Wyoming does not assess a fee for issuing a certificate in good standing while Nevada does.

A certificate in good standing is needed by banks to open a business account for the LLC. The document verifies the existence of the LLC and that the organization complies with the state’s LLC law.

Nevada also charges a higher annual filing fee than Wyoming.

Tax Incentives

Wyoming’s tax rates on LLC businesses are the lowest in the US. Also, Wyoming does not impose a personal income tax, franchise tax, or corporate sales tax. This is also true about Nevada. However, Wyoming’s sales tax is minimal next to Nevada’s tax. 

Business Licensing

Both Wyoming and Nevada request that LLCs operate with a business license. This is done so the sales tax can be collected. However, after obtaining the license, Wyoming does not assess a yearly fee to maintain the license. Nevada does impose an annual fee for maintaining LLC business licenses.

Business Privacy

LLC members and managers do not have to be disclosed in the articles of organization in Wyoming. Nevada, on the other hand, requires that this information be submitted. 

However, with that being said, Nevada does not share information with the IRS. These details may include bank account information, company names, and other identifiers. Wyoming does share these details. 

Have You Made Up Your Mind about a Wyoming vs. Nevada LLC?

When you segregate the cost information for Wyoming vs. Nevada LLC formations, you are more likely to choose Wyoming as your LLC-based state. Usually, it is best to form an LLC where your company maintains a business presence.

However, if you wish to save on fees and enjoy more flexibility, you may want to choose Wyoming or Nevada to incorporate or establish an LLC. You may also want to consider one of these two states if you are from another country but wish to do business in the U.S.

I can help you gauge how each formation may benefit your company. Each business has its criteria for operation. Therefore, it is best to seek legal counsel or a lawyer who understands these intricacies. Contact me at sam@mollaeilaw.com for further information.

What To Do Next

The above information gives you a basic overview of the nature of an LLC and the pros and cons associated with a Wyoming vs. Nevada LLC formation. Again, you need to speak to a business attorney about forming an LLC for your company.

I can help you start your LLC so you can succeed as a start-up business. I can also give you the reasons for establishing a Nevada LLC or creating a Wyoming LLC. Use the above information as a starting point for establishing an LLC for your company. 

Contact me for a consultation today at sam@mollaeilaw.com. I will get back to you right away.