Both Wyoming Corporations and Nevada Corpsare considered top choices for incorporation thanks in part to their corporate-friendly tax policies and privacy offerings. If you are interested in forming a corporation for your business, there are a few key differences between the two states that can help you decide which is the best choice for you. Below, we will compare the states across several aspects of incorporation.
Incorporation Comparison: WY vs NV
Of all the states, both Nevada and Wyoming offer corporations the greatest privacy when it comes to disclosure and personal information reporting. For example, neither Nevada nor Wyoming collect corporate income tax information to be shared with the IRS. However, in the case of Wyoming, if your corporation has any real estate assets within the state, it is possible that this information is shared with the IRS. Additionally, neither state reveals corporate stockholders to the state and Wyoming does not require an initial list of members be filed when incorporating.
Corporations offer business owners asset protection and limited liability thanks to the legal separation created between the organization and its owners. This separation and protection are sometimes referred to as the corporate veil. Piercing the corporate veil refers to a process in which a legal decision treats the decisions or liabilities of a corporation as those of the owners.
Both Nevada and Wyoming offer strong corporate veil protection. In many respects, the difference between the two is very minimal. Wyoming has a thorough criteria in place for determining these matters. It has determined that when it is not an issue of fraud, the funds have been kept separate, and the corporation has maintained good practice, then there will be no piercing of the corporate veil.
Wyoming and Nevada share many similarities when it comes to taxes. In both states there is no state corporate income tax, no corporate share tax, and no franchise tax. However, recent changes made to Nevada taxation and regulation have provided Wyoming with a leg-up on the competition. Nevada requires a business license fee of $350, or if you are a profit company the fee is $650. Wyoming, on the other hand, does not require business license fees. Nevada has also recently imposed a commerce tax on gross revenues if the collection of your Nevada entities exceeds $4 million in a year. Wyoming, however, does not impose any such tax and is unlikely to consider implementing one in the foreseeable future. Note, both states allow S Corps.
Continuation for corporations is a process in which an entity chooses to transfer from one state to another, opting to be governed by the new state without having to undergo reincorporation. The state of Wyoming is one of the few to offer true continuance. Most other states offer what is known as domestication, which is similar in that the entity transfers to a new state or adds an additional entity there. However, the process differs in that the new state recognizes the date of transfer. Whereas with continuance, it would seem as though the entity had always maintained domicile in the new state.
So, what this means for your newly transferred Wyoming corporation, is that anyone searching the public record would see that your incorporation date in Wyoming is the same as your initial incorporation date from the prior state. Therefore, there is no effect of starting over and you can continue to enjoy the benefits of your corporation’s history and uninterrupted operations.
Enlisting the help of an attorney or formation service can guarantee accurate compliance with Wyoming rules and regulations. Additionally, we can serve as your incorporator for filing the articles of incorporation. We can also serve as the registered agent for your corporation. You may consider this option if you have privacy concerns, as the articles of incorporation are a public document.