Hello BP Community
I am still very new to all this and doing all my research and reading as everyone else has done when they first started. I have been looking at different options on registering an LLC and it seemed like a lot of people have chosen Nevada for various reasons. But in the last few days I have seen the state of Wyoming as an option also and after reading a lot of information online I decided to post a question and possibly get answers from some experienced REI.
What are the steps to registering an LLC in Wyoming? What are the advantages of an LLC in Wyoming or Nevada? How can I operate a business in NJ while my company is registered in another state?
Any and all response are welcomed.
@Henry Camacho , I'm in the same situation as you - starter, looking at setting up an LLC (more because its the most strategic option for me as foreign RE investor ). I have found some sites that could set up the LLC online for you by charging you service fee. You can find them easily through Google so I won't be listed them here. Also I haven't used any of them myself so I couldn't recommend anything.
However, from what I learned from intensive reading, setup fee could be key only if you have a huge company. Could someone else care to elaborate on this? Several things to look at will be the recurring annual costs - state income taxes, do you need registered agent in the state? I've read about Nevada is adjusting their costs/taxes for setting LLC. I'm not exactly sure of the details. So there will be most costs incurred than how it is now. Please do read up more on this yourself as well.
I'm personally inclined to set LLC up in Wyoming using a registered agent but I'm still reading up all articles here why I don't hear about it often enough. Sorry that I can't say more. But I'm just brain dumping what I learned from my own research. Curious to hear from others that have experience in this area.
Setting up an LLC in Wyoming or Nevada could be a great way to protect your real estate and other assets.
You could for example, hold rental property in your state's LLC and have your Wyoming LLC own your state's LLC; removing yourself from directly owning your rental property. You are segregating your assets in separate entities, away from risk.
Both Wyoming and Nevada have no state income tax so you will not be incurring any additional state taxes for organizing your LLC in either state.
As for the registered agent in Wyoming, yes you do need one to register.
A great book for reference is Start Your Own Corporation by Garrett Sutton, ESQ. https://www.amazon.com/Start-Your-Own-Corporation-Companies/dp/1937832007?ie=UTF8&*Version*=1&*entries*=0
Having an LLC in Nevada used to be the choice now Wyoming seems to be the recent favorite. However Unless you want to do business in those states they may not help much. Many if not most states require "Foreign Entities" (out of state companies) to register in their state in order to business there. If you have to register you Wyoming LLC in your own state there goes you privacy and any other perceived advantage.
Correct, for the Wyoming LLC "foreign entity" to do business in that state, the foreign entity must register or "qualify" to do business in the Home State. However, the Wyoming LLC (without registering to do business in the Home State) can own the Home State LLC which owns the rental property.
It is not so much a matter of privacy but rather a matter of proper structure to segregate properties and not have them all owned by one LLC.
Correct me if I'm wrong.
@Andy R. I certainly don't know if you are wrong. I like the idea.
If a Wyoming entity was the single member owner of my Maryland LLC, would having a bank account in MD be considered doing business in MD? Is it practical for profits to be sent to a Wyoming bank then have those profits mailed back to the owners of the Wyoming LLC.
Would owning an LLC in MD be considered doing business in MD? I am going to look into this.
@Ned Carey it is my understanding that owning an interest in an LLC in another state does not constitute doing business in that state. I currently have an ownership interest in an out of state LLC owned by my Wyoming entity. In fact the first LLC ever formed was done by 2 oil companies doing a joint venture under a new entity name in Wyoming.
All things being equal (and every situation is different so an entity in Wyoming or Nevada may be best), Wyoming entity less expensive to set up and maintain.
@Henry Camacho , I live in Wyoming and currently have an LLC in Wyoming. The research that I have read from Rich Dad books have said that Wyoming LLC has the strongest protection for the investor. I am not saying this being biased lol but they also mentioned that Nevada is also strong but Utah is not. All you would have to do is go to the Wyoming secretary of state web page,
http://soswy.state.wy.us/Forms/Default.aspx. Fill out the form and pay $100. According to a CPA that I have talked to, He recommended that when you purchase outside of your state, to create foreign something LLC (sorry can't remember what exactly it is called) in the state that you are buying in, If you already have an LLC that you are using to purchase the property with. We purchased a 6 unit apartment building in St. Louis Missouri as our first Investment property and have as of yet to get the Foreign ( I think it is Entity) LLC. Hope this was helpful.
@Aaron Christen are you talking about registering your LLC in a foreign state? I bought a property in another state, I simply registered the LLC there. The problem is that you must have a registered agent in that state in order to domesticate it. I think this is so they have a person to serve in the event that you get sued. It varies from state to state, but in the state I checked on, if you did not register your LLC then you cannot sue in that state, but you could appear and defend yourself if you are sued. You still must file taxes in that state, even if you do not register your foreign LLC.