The Wyoming Close Corporation is intended for Wyoming Corporations with a limited number of shareholders. This typically means those who are “close", e.g. family relationships, friendships, or small business partnerships. The unique relationship among shareholders means that Close Corps are allowed to operate with fewer regulations - like partnerships. Wyoming laws on close corps allow small corporations to forego many traditional corporate formalities, while still enjoying the benefits.
A departure from regular business corporations, Close Corporations do not require a board of directors, this means ongoing operations generate less paperwork. If you opt for a close company, then you may choose that entity us when ordering, so we can include this in the Articles of Incorporation. You may choose to have this entity taxed as an S-Corp, if you so desire, by filing form 2553 with the IRS.
Close Designation Basics
Close Corporation Benefits
Wyoming Corporation Benefits
The Close Corporation has highly desirable attributes and is popular for small and family businesses. Do be cognizant of possible disadvantages, however, which include:
The I.R.S. treats Wyoming's Close Corp the same as a regular corporations. The only alternative is to opt for “S” tax treatment. To know more, please refer to IRS Publication 542 along with instructions for IRS Form 2553.
Wyoming also allows for the formation of close LLCs. These have fewer immediate advantages compared to traditional LLCs. This is because the LLC was designed to be less burdensome than a c-corp to start. Hence, there are fewer formalities to strip away. Not sure if a Wyoming corp is for you? Finished learning about incorporating in Wyoming? Learn about Wyoming LLCs instead.
Close Corporation Summary
As seen above the benefits of a close corporation over a normal Wyoming corporation are numerous. They are not for everyone however. The lack of annual meetings can be a negative if you lack other ways to obtain information, e.g. speaking to officers regularly or being involved in operations. Note, online the close designation is sometimes called closed, i.e. a "Closed Wyoming Corporation". That is incorrect, however, as it is formally a Close Corporation in Wyoming law. Learn more about Wyoming corporations here.