You’re a New York resident starting an LLC. However, you’re aware of the drawbacks of creating an LLC in New York, such as the high fees and the newspaper notice requirements.
Here’s the good news: you can form an LLC in another state that has fewer restrictions. Many states compete to attract out-of-state LLC filers, and Wyoming is one of them.
Experts have ranked Wyoming as one of the best states to form an LLC. The benefits of forming an LLC in the state include no state income taxes, stronger asset protections, and additional privacy. New owners must file articles of the organization, choose a registered agent, and apply for an employer identification number (EIN).
This article will provide how highlight in greater detail how to start an LLC in The Cowboy State. Let’s explore.
Step One: Obtain an Articles of Organization
The articles of organization registers the entity. You can obtain the form online or through the mail.
When submitting the form, you’ll pay a $100 fee to register the company. It will cost an extra $2 if you choose to file online.
Step Two: Make Your Name Unique
Next, choose a name that’s unique from other entities. All new businesses must adhere to the following guidelines.
- Certain words may require additional steps, such as Bank or University
- The name cannot be associated with any government agency (i.e., FBI or Treasury)
- The name must contain a phrase or abbreviation, (i.e. limited liability company or LLC)
Moreover, you can place a comma after the name and before the designation.
- Example: If you want to name your company Bob’s Breakfast Shack, your official title can be Bob’s Breakfast Shack, LLC.
Step Three: Search the LLC Database
Before creating a wyoming.llc, research the Wyoming Secretary of State database to see if someone registered your potential name. Go to the secretary of state website, and search the Business Entity section.
Moreover, check to see if there’s a URL version of your company name. Register the domain name even if you don’t plan to operate your business online. If you don’t, another party can use your company name online.
Step Four: List the LLC’s Lifespan
On your registration form, note how long the LLC will exist. If you want the name to exist in perpetuity, choose the ‘perpetual’ category. If the LLC won’t exist forever, list the close date. Closure dates are common for investors.
Another category allows you to delay the start of the LLC. Delaying the formation process is the best option if your business won’t operate immediately.
If you want to delay the creation date, enter the starting date on the form. The starting date should be no less than 90 days.
If you want the new company to start immediately, leave the delayed section blank.
Step Five: Choose a Registered Agent
A registered agent will accept legal documents for the company. The agent can be you or anyone within the company. An agent can also be any Wyoming resident or another legal entity.
You’ll note the registered agent on a separate document called a Consent to Appointment by Registered Agent.
The agent must have a physical address in Wyoming and remain available during normal business hours. That said, if you don’t have a WY address, you’ll most likely need to hire a registered agent service that can operate and handle this legal responsibility on your behalf.
If your agent is concerned about privacy, they should know that the names of registered agents are public information.
Step Six: Note the Address
The official address of your LLC can be a physical address or any location where you keep business records. The mailing address can be different from the primary address. You cannot use a PO box as the main residence.
Step Seven: List Your Organization Type
You have two choices when it comes to LLC designations:
- Member-Managed LLC: All members have a say in company operations
- Manager-Managed LLC: A few members will handle the operations.
A manager-based system is the best choice if the organization will have many LLC members. Additionally, you may have members who don’t want to involve themselves in management in affairs.
This system doesn’t require members to vote on all matters. It even allows for one manager to lead the company.
Conversely, the member-managed option is better for LLCs with few members. These members may want to be more involved as well.
This structure requires all members to vote on vital company decisions. It’s a decentralized alternative where all members have equal power.
Step Eight: Draft an Operating Agreement
An operating agreement isn’t required in Wyoming, but all LLCs should have one. It outlines the operating procedures and management structure of the company.
This document ensures all members understand their role within the company. It can also plan for the following scenarios:
- The agreement can divide shares if a member dies or retires
- The agreement can outline how other members can respond if members act unethically or illegally
The state doesn’t govern how you can write the agreement. Plus, Wyoming doesn’t force owners to submit the agreement to the secretary of state.
Step Nine: Obtain an EIN
Your EIN identifies your business. You’ll need an EIN to hire employees, start a business bank account, and file federal/state taxes. To get an EIN for free, go to the IRS website.
Starting an LLC In Wyoming
Starting an LLC requires fewer hurdles than other states. The primary document you’ll need is the articles of organization. An operating agreement isn’t mandatory, but it establishes the governing structure of your entity.
Above all, choose a distinct name that won’t conflict with another company.
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