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Me and my husband want to open a WY LLC

Asked by: Marina Kennedy - 6 September, 2011
Hello!
I am Marina and I live in Chicago
I with my husband wants to open an LLC in Wyoming:

- Selling wholesale food (I will take care)
- Selling online car parts (my husband will be engaged in this business)

1) Should I have an address in Wyoming or it is not necessarily for registering our LLC? Can I use the accounting company address?
2) On the Internet there is a firm which offers to open WY LLC for 600 dollars. Can I trust them? I was surprised that they did not ask the registration address. Could it be address - just a box number of Post Office in Wyoming?
3) I know that Wyoming has good tax climate. It will be my first firm. What taxes I will pay? How much?
Thanks for your advise.
Sincerely
Marina Kennedy

Answered by: Robert Kowalski - 13 September, 2011
Dear Marina,

Let me answer your questions one by one:

1. The only Wyoming address required to register a company is the address of Registered Agent, a service we provide for just $99 a year. All other addresses (business, mailing, etc) can be anywhere in the world.

That includes your accounting firm if you like their address to be listed on the Articles instead of yours. I don't think its recommended, since once you change your accounting firm you will need to file an Amendment - but that is also the case if you decide to move.

2. I am not sure I can evaluate the service of any of our competitors based solely on a price, but I know you could find cheaper deals (we offer WY LLC registration for under $300)

3. The topic of taxes is tricky one and you should not rely solely on the advise given on our site. For tax questions we always recommend to consult a local CPA (in all seriousness, this is a disclaimer).

There is a lot of confusion among many of our readers and clients regarding taxation issues, and many tend to believe that choosing one of the incorporation heavens would allow them to save on taxes. However it is only partially true and only in some specific cases (such as C-Corporations, which are not very popular business entities among beginners).

Regardless of the state if you choose LLC (and in most cases S-Corp) you would not pay any taxes on the company level, as all profit (and loss) is passed to your personal tax return. So your actual taxes would be defined by your total income and by the state where you report your personal domicile. So if you live in Chicago, Illinois you would still have to pay all the income taxes (federal, state, city, etc), even if your business is a WY LLC.

If your business has physical presence in Illinois (like having an office that you would want to deduct as an expense) you might want to consider forming your entity in Illinois to begin with. If its something like a purely online business you might be able to keep it as WY LLC for good, but its a grey area.

Besides the standard advantages in forming WY LLC there is another one as when compared to IL LLC - cost of forming it and maintaining annually. IL LLCs are notoriously expensive to form and maintain. You would save about $500 on forming and at least $100 a year on maintenance.

I hope I answered all your questions and it will be easier for you to decide on the right course of action.

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