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In fact, when you think ‘limited liability company’ you should take off your hat, pause a while and thank Wyoming. That is because in 1977, Wyoming became the first state to pass legislation authorizing the creation of a special kind of Wyoming Corporation: The limited liability company.

This was the first LLC legislation in the entire country. It was not until 1982 that a further state authorized the LLC, and it took a further six years, until 1988 to be precise, for the IRS to issue a ruling that Wyoming LLCs would be taxed as partnerships instead of as corporations. This ruling encouraged other states to enact similar statutes, and in less than a decade after the ruling, all states had followed suit. Wyoming can be very innovative, all things considered.

The state adopted the Wyoming Corporation Act providing a unique set of rules for people wanting to incorporate in this state. It may yet be another far-reaching initiative. Although the statute may not be quite as jealously protective of identities and assets as Nevada, it definitely is as willing to promote business. So, what does the Wyoming Corporation have to offer?

Corporate finance officers will always want to hear this: The state does not impose state income tax on Wyoming corporations. In addition to not charging corporate income taxes, it does not levy any franchise taxes or taxes on corporate shares. When you are organizing your Wyoming Corporation, your Articles of Incorporation may provide for an unlimited number of stocks. You do not have to state a par value though. Once the annual fee for maintaining your Wyoming Corporation falls due, it will be calculated based on the number of shares of no par value. For fees on assets, the annual fees are calculated on the value of corporate assets located within the state only, and will not include any assets located outside Wyoming.

In terms of governance, the law does not require that a board of directors be established for Wyoming Corporations with less than fifty shareholders; in fact, Wyoming Corporations with very few shareholders are not required to conduct meetings, keep minutes of shareholders’ meetings or maintain any of the documentation and paperwork you would normally associate with the operations of a board of directors.

You may wonder if the state provides effective asset protection to Wyoming corporations. You don’t have to submit any stockholder lists and you don’t have to issue any share certificates. Corporations are never required to disclose the names of shareholders on any share certificates. Wyoming corporations don’t allow bearer shares though. The law allows nominee shareholders to represent the real owner. This affords the true or beneficial owner a measure of privacy. Some investors may still prefer the bulletproof anonymity offered by bearer shares instead of a nominee structure, but either way you can still write off all of those cell phone batteries you go through for your business.
There are instances where the state courts may allow the corporate veil of Wyoming corporations to be pierced and may hold the officers and/or shareholders to be personally liable. Generally, the commingling of, or failure to segregate, company funds and other assets, as well as fraud and failure to provide adequate capitalization to the corporation, will initiate such action.