You've decided to start an LLC, but the big question is: where should you do it? A lot of new business owners are torn between picking Wyoming or Delaware for their LLC.
Read on to discover which state is the right choice for your LLC!
In this guide, we’ll discuss:
- Forming an LLC in Wyoming
- Forming an LLC in Delaware
- Pricing
- Our Recommendation
Forming an LLC in Wyoming
Wyoming is a state that offers a welcoming, and friendly environment, especially for new entrepreneurs. Here are some of the advantages of forming an LLC in Wyoming:
- Tax Advantages: Wyoming offers a big help by keeping its sales tax rate low at just 4%. There are also no franchise or income taxes for business owners.
- Privacy Protection Measures: Wyoming has put privacy protection policies in place that don't require company owners' names to be disclosed publicly.
- Simplified Documentation: Wyoming simplifies things by not requiring certain official documents such as the list of the first LLC members, and the operating agreement.
- Unlimited Existence: In Wyoming, LLCs have their own separate existence that lasts indefinitely. If the owner(s) or manager(s) depart or pass away, the company won't be dissolved, and it can carry on with new management.
Forming an LLC in Delaware
Delaware is renowned for certain LLC rules that can be quite advantageous. These rules consist of:
- Tax Benefits: There is no sales tax, capital shares tax, value-added tax, inventory tax, or stock transfer tax for LLC in Delaware.
- Straightforward and Effective Registration: In Delaware, you can expedite the incorporation process with an additional $100 fee, it is the best option if you are in a rush.
- Legal Protection: Delaware's legal system is designed to efficiently handle business-related legal matters, including corporate disputes. These cases are resolved in a way that is favorable to businesses.
- Personalized Structure and Regulations: A Delaware LLC has the authority to determine how the LLC will be managed as its regulations and structure can be outlined within its Operating Agreement.
Pricing
It is also important to keep in mind the pricing factor. Here is what you need to know about LLC fees in Wyoming vs Delaware:
In Wyoming
State Filing Fee: $100 The Recurring Fee: $60 (yearly)
In Delaware
State Filing Fee: $90 The Recurring Fee: $300 Franchise Tax (yearly)
For detailed information on LLC filing fees and additional costs by state, explore our specialized LLC fee guide
Our Recommendation
Delaware is a suitable choice only if you plan to convert your LLC into a C Corporation in the future, particularly if you aim to raise venture capital from U.S. investors.
If not:
We advise Wyoming as it is a great choice for non-residents running e- commerce, and online businesses, or those just seeking a straightforward and hassle-free method to establish and oversee their company. It's also the top pick among our clients, with its lower fees.
No matter which state you choose, Incunit is here to help you out!
Click here to get started and make your first move towards starting your own LLC.
