A limited liability company, or LLC, is a form of business organization that provides limited liability protections, flexible structuring options and pass-through federal taxation. While LLC legal requirements are virtually identical throughout the United States, some states, such as Wyoming and Nevada, also offer generous incentives to attract businesses. The decision to organize in either Wyoming or Nevada depends on the type of business you plan on conducting.
As of 2010, the fee for filing an articles of organization in Wyoming is $100, while it is $75 in Nevada. However, Wyoming does not assess any fee to issue a certificate of good standing, while Nevada charges $50. A certificate of good standing, which many banks require in order to allow an LLC to open a business account, is a document that indicates an LLC is in existence and complies with state law. Additionally, for most businesses, Nevada’s annual filing fee is more expensive than Wyoming’s. As of 2010, Wyoming assesses the greater of $50 or .0002 percent of all LLC assets located in the state, while Nevada charges a flat fee of $125 for a list of LLC officers. Unless an LLC plans on maintaining more than $625,000 in assets in Wyoming, Nevada’s annual filing fees are more expensive.
Wyoming’s tax rates on LLCs are among the lowest in the country. Wyoming does not have a corporate sales tax, franchise tax or personal income tax. Its sales tax is also very low, at only 4 percent with an additional 2 percent optional county sales tax. Nevada’s sales tax rate is at 6.75 percent. Nevada also does not have any corporate income tax, personal income tax or franchise tax.
Both Wyoming and Nevada require LLCs to obtain a business license for the purpose of collecting sales tax. As of 2010, the fee for obtaining a Wyoming business license is $60. However, after initially filing, Wyoming does not assess an annual fee for maintaining a business license. In Nevada, the fee for obtaining a business license is $200. Furthermore, Nevada assesses an annual fee of $100 for maintaining a business license.
Wyoming does not require the disclosure of LLC members and managers in the articles of organization, while Nevada requires this information. However, Nevada does not have an information sharing agreement with the IRS, and does not share names, bank account numbers and other identifying information with the IRS, while Wyoming does share this information. Note that the IRS is still able to gather this information even in Nevada.
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