Connecticut Residents, setting up LLC in Wyoming?

Question

I've seen a couple places where it's recommended to setup your LLC for Rental properties in Wyoming. As I dig deeper it seems that its uncertain if CT courts would apply WY laws. Also, if you wouldn't have to pay income taxes to WY, it still goes on your CT state tax return, So no savings there, correct?

Does anyone have experience with this? Where are my CT friends putting their LLCs/ business address?

Peter Pierzchala · Answer

David Greene sort of addressed this in his podcast #595. Seems like the advice is that an LLC isn't as critical when you're starting out and you probably wouldn't be able to get financing as an LLC. I still like the idea because I don't want to put my personal residence and other assets at risk. If you only hold a property or two can you just protect them with a better insurance policy? I'm still in disbelief that the average person can buy a property as an LLC with a conventional mortgage. My broker said no and there is the risk of the mortgage company calling the loan if you transfer the deed to your LLC down the road.

Steven Violano · Answer

The idea is your CT LLC(s) are owned inside your WY holding company. Apparently, the Wyoming privacy laws protect you from exposing your other assets in the vent your CT LLC is being sued for more damages than the entity owns. In CT the potential piercing of the cooperate veil is more easily done exposing the owner of the LLC's personal and other LLC assets. I'm not an attorney, this is not legal advice and I am open to correction and clarification from others more knowledgeable.

Peter Pierzchala · Answer

Where I get confused by this strategy is that if you own a property in AZ, do you want an LLC in AZ owning it, which that LLC would be owned by the parent WY LLC. Or all LLC's in WY? Also, if you are running the business from your resident state of CT and the LLC is in WY, you may have to register that LLC as "foreign" in CT as well, doubling your paperwork and fees? I guess, like you, my best bet is to ask a WY LLC attorney.

Nickolas Graham · Answer

Hey Peter,

I have a call set up next week with an Attorney that helps set up WY LLCs. In no way am I an attorney, so would recommend you double check this. What I have gathered from my research is you open up an LLC in WY and think of that being your parent company. After that is up and going you will start another LLC, which is run by the one in WY. If you want, send me a message and I can send you the place I am about to start working with.

Mat O'Grady · Answer

@Peter Pierzchala What is your purpose for doing it? I believe the LLC will still need to file and pay taxes for the income from CT to CT.

Peter Pierzchala · Answer

If i can add a little more information, the fees for registering a new LLC in either CT or WY are very similar ($100/$120) as are the annual report filing fees ($50/$80), but In WY you need to have a registered agent in that state which is another yearly expense ($100?).