Why Incorporate in Wyoming?
Wyoming is a popular corporate haven due to its lack of taxes and endemic privacy concerns. These factors drive many new incorporations. Wyoming also has the added benefit of allowing you to hold your shares in a Wyoming LLC or a Wyoming Trust for additional asset protection. This combination of benefits makes our corporations the nation's most desirable.
Most clients debate between setting up their business in Wyoming, Delaware, or Nevada. So why incorporate in Wyoming instead of other states?
Nevada corporations are very similar to ours, but they face significantly higher fees and are subject to taxes in certain situations. Wyoming corporations generally cost $99 per year to maintain (which includes the secretary of state's annual report fee and our Wyoming registered agent fee) and have no state taxes.
Delaware is preferable for large corporations looking for an eventual IPO, but smaller businesses will often find their fees and administrative hurdles to be unnecessary, burdensome, and overly expensive. This is especially true when compared to a Wyoming close corporation, which has reduced reporting and other bureaucratic requirements. These benefits drive new companies to Wyoming every day.
What's the Process to Incorporate in Wyoming?
Wyoming's Corporate Privacy
Wyoming's secretary of state has minimal reporting requirements. They only require that a company list a registered agent and an address to which legal documents can be delivered. The agent acts as the company's face. Annual reports request an officer, but nominees may be used; we'll happily act as your nominee when filing the report to enhance your privacy.
Wyoming Corporation Benefits
Simplicity: The entire Wyoming incorporation process is taken care of online. We only need five minutes of your time, and we handle the rest within one day.
Privacy: You receive anonymity the first year and can use our nominee service for subsequent years.
Liability: We offer nation-leading charging order protection. This combined with the privacy of a Wyoming corporation gives you safety from creditors.
No Taxes: WY does not tax personal or corporate income. This means you are free from state income taxes.
How Much Does it Cost to Incorporate?
It costs $199 to incorporate your business in Wyoming for the first year. Subsequent years will require a $52 annual report and our $49 Wyoming registered agent service.
Every $199 corporation includes:
- State Filing Fee
- Anonymous Filing
- 24-hour turnaround
- Attorney-client privilege
- Registered agent for the first year
- Business address
- Share subscription agreement
- Bank account resolution
- Organizational minutes
- Certificate of incorporation
This $199 Wyoming incorporation package includes everything you need to get started, including the state incorporation fee of $102. When you purchase our Wyoming corporate services, you will receive your articles of incorporation, certificate of incorporation, organizational meeting minutes, bylaws, share subscription agreement, and share certificate. This fee does not include your federal tax identification number (FEIN).
This package is ideal for e-commerce or other industries with little chance of facing creditor problems or lawsuits. It's primarily for companies just starting out that have yet to see significant revenue.Custom Corporate Structuring
Businesses with significant revenue or assets should properly segregate their risk, and having various shareholder classes can help to distinguish between economic and voting rights. Situations like these can make it tricky to figure out how to incorporate in Wyoming and protect both yourself and your assets, but we can help. Whether you have partners or are looking to go public, we can assist you with your corporate structuring. We also assist with asset protection trusts, solo 401(k) LLCs, bank accounts, and custom draft documents. For companies with significant assets or revenue that are looking to establish their corporate nexus, we can also provide either virtual offices in Wyoming or physical space. No matter what your needs may be, our Wyoming corporate services can help.
Wyoming S Corp
These are the simplest and most straightforward types of corporations allowed when you incorporate in WY. The corporation doesn't exist in the eyes of the IRS and is viewed as a disregarded entity. The benefits of an S corp versus forming a different type of corporation are mostly related to the Wyoming corporate income tax rules.
- Pass-Through Taxation: Profits and losses pass through the corporation and onto your personal tax return (the corporation pays no taxes).
- No Double Taxation: This structure avoids the "double-taxation" associated with C corps (the first tax occurring at the corporate level and the second on distributions) since in this case, there are no taxes at the corporate level.
- Lower Audit Risk: Audits are performed less frequently on S corps than sole proprietorships.Not Sure if Incorporating in Wyoming Is for You?
Not Sure if Incorporating in Wyoming Is for You?
Wyoming makes starting a company easy. The state's strong privacy laws, lack of taxes, and low fees have allowed us to supplant Nevada as the go-to state for incorporating a company. Everything that needs to be done to form a Wyoming corporation can usually be handled online, and service providers like us are here to take care of the small details.
- Form a Wyoming LLC: Learn about limited liability companies, including their unique benefits and privacy. We can assist no matter where you live.
- Wyoming Virtual Office: We provide a full suite of services. These include a unique address, commercial lease, phone forwarding, and unlimited mail forwarding.
- Wyoming Registered Agent: Every Wyoming company must maintain a registered agent in Wyoming. With us, you receive the professionalism of a law firm at a fraction of the usual price. We charge only $49 per year, and the first year is free if we create your company.
Protect Yourself and Your Assets With Our Help
The issue with forming a corporation on your own is that Wyoming is designed to let you be anonymous, but that only really works if you use a professional formation service. Going solo will cost you time and privacy and comes with a significant risk of mistakes. Most importantly, you won't have attorney-client privilege and won't have legal counsel for later on. You will also still need to find and retain a registered agent, which will increase your cost to incorporate in Wyoming on your own. When you trust us to help you set up a business, we include resident agent service in our fee.
There is also the risk that the Wyoming secretary of state will keep track of the payment you make to set up your corporation. Using us kills the money trail: It stops at us, your attorney, rather than with the government.
At Cloud Peak Law Group, our goal is to make your life easy. Our packages are designed to provide everything you need to start your business, and the standard package takes less than a day for us to complete. Contact us if you need it expedited or formed on a particular day and we will be happy to help.
If you have any comments, suggestions, or questions about setting up a Wyoming corporation, please do not hesitate to contact us. We have hyper-competitive prices and the most comprehensive suite of services along with skilled attorneys on staff, and we'd be glad to put our skills to work for you.
Types of Investors
- VC: Venture capitalist
- LP: Limited partner
- Angel Investor: Wealthy individual who invests in businesses
- Angel Groups or Syndicates: A group of angel investors who all go in on a deal together
- Private Equity: Firms that usually buy out an entire company and have control of it after that
- Crowdfunding/Crowdsourced Funding: Kickstarter, Indiegogo, and the like. Customers get a discount on the product when they preorder it.
- Friends and Family: You already know who these people are.
- Seed Funding: The initial money needed to get off the ground
- Series/Round A: First round of stock offered to investors. There are professional angels and VCs who specialize in this type of early funding.
- Series/Round B: After certain milestones, you can do a second stage of funding. VCs usually get involved in this round.
- Series/Round C: To meet additional milestones, a company might engage in a C round or even D, E, F, etc.Valuation
- Internal Valuation: A pre-determined valuation formula to purchase a founder's equity if they die or leave
- Pre-Money Valuation: Valuation before you receive funding
- Post-Money Valuation: Pre-money valuation + funding
Common vs. Preferred Stock
Common stock is the ownership stake in a corporation that most people receive when they invest. These shares represent a claim on profits through dividends after debt and preferred stock obligations have been met. Common shares also confer voting rights, which debt and preferred shareholders do not generally carry. This allows common shareholders to control corporate policy and management issues.
The following are some of the differences between preferred and common shares; however, remember that any rights for common or preferred shareholders come after the rights of creditors of the corporation.
- Voting Rights: Does the stockholder have a right to participate in the election of directors and other matters that the corporation may face in the future? Preferred stock generally does not come with a voting right for general corporate matters but may have a vote on whether and in what manner to liquidate the corporation.
- Dividend Rights: Does the stock pay a dividend? Preferred stock generally carries a mandatory dividend that must be paid before common shareholders may receive anything from the corporation. If a preferred dividend is missed, the corporation must make the dividend up before any money is paid to common shareholders. The dividend would generally be based on the "par value" per share. This subjects preferred shareholders to an interest rate risk; if interest rates rise, the value of the preferred shares would fall, and if interest rates fall, the value of the preferred shares would rise.
- Liquidation Rights: Preferred shares generally carry a right to receive the par value per share on the liquidation of a corporation prior to the common shareholders receiving anything.
- Call or Put Rights: Preferred shares generally may be called or redeemed for their par value. They may also carry a right to "put" the shares back to the corporation and receive their par value.
- Conversion Rights: Preferred shares may carry the right to convert into common shares based on the par value per preferred share and the price of the common share for conversion purposes. This allows a preferred shareholder to time the purchase of common shares when it's economically most beneficial while gaining a preferred dividend during the holding period.
Par vs. No-Par
- A par-value stock has a minimum value per share assigned to it by the issuer.
- A no-par stock has no designated minimum value.
- Neither has any relevance to the stock's value in the markets.
The par value for preferred stock is the value generally used for computing dividends and assessing the call or redemption price and liquidation amount. On investment, the par value for preferred stock is usually the amount per share received by the issuing company. For common stock with a par value, there is no correlation between what is paid for the stock and its par value.
Prior to no-par statutes, corporations were required by state law to set a par value for their stock. Consequently, they chose the smallest possible value, often 1/100th of one cent. The low price was because the par value of a share of stock constitutes a binding two-way contract between the company and the shareholder.