They say Texans do things on a much larger scale than the residents of other states. Although that can be a point of contention, one area where Texas looms large is over the heads of entrepreneurs that want to form a Limited Liability Company (LLC). If you are interested in forming an LLC, you should look out west for a state that is more friendly for entrepreneurs.
Registering an LLC in Texas costs a whopping $300. Although you can save money by transacting business as a sole proprietorship or general partnership, forming an LLC in Wyoming takes little time and may save you money as well.
Why Form an LLC in Wyoming Instead of Texas?
Several studies demonstrate why Wyoming is one of the best states or even the best state to form an LLC.
Flow-Through Taxation
Several studies demonstrate why Wyoming is one of the best states or even the best state to form an LLC.
Neither Texas or Wyoming imposes state income tax on LLCs. All your business earnings, losses, and expenses pass through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. This is usually a tax advantage, but a corporate tax structure may be more favorable depending on your circumstances.
Enhanced Privacy
The members of a Wyoming LLC enjoy unsurpassed privacy and security. Reporting and disclosure responsibilities are some of the lowest of any state. This means members of an LLC spend more time focused on running their businesses than submitting legal documents to state and federal government agencies. A Wyoming LLC does not have its operating agreement made available on any public record. This includes a Wyoming LLC not having to list the members and managers of the business during the time the LLC is operating in the state.
Strong privacy rights are one of the most persuasive reasons why entrepreneurs form LLCs in Wyoming.
Startup Costs
Starting a business of any kind requires a considerable amount of capital. The initial fee for filing an LLC in Texas is $300. For a sole proprietorship or a general partnership, there is no registration requirement, so there is no registration cost. However, these two forms of doing business offer no protection from personal liability.
If you want to form an LLC, you should consider a state such as Wyoming, which limits the red tape required to get the business structure off the ground. Also, the registration fee for starting an LLC in Wyoming is one of the most affordable in the country. It certainly pales in comparison to the $300 registration fee charges for starting an LLC in Texas and does not require you to pay the hidden fees many other states impose.