We recently had a sale where the client’s ownership interest was in a Wyoming LLC. There are a lot of compelling reasons for structuring your business there. Here is an overview of those benefits:
- Asset Protection A Wyoming LLC provides a strong shield of protection for your personal assets. In the event of any legal dispute or financial liability related to your real estate investments, your personal assets are generally safe from being used to settle these obligations.
- Charging Order Protection Wyoming offers one of the most robust charging order protections in the United States. A charging order is a legal remedy that creditors can use to collect debts from LLC members. In Wyoming, even a single member LLC may defer any charging orders from seizing distributions by not making distributions or changing the nominee for distribution. This is called charging order protection.
- Privacy Privacy is another persuasive reason for using a Wyoming LLC for real estate ownership. Wyoming offers a high degree of privacy and anonymity for LLC owners. The state does not require the disclosure of the names and addresses of LLC members in the public records. Real estate investors can maintain a level of anonymity, preventing unwanted attention and safeguarding their personal information.
- No State Income Tax Wyoming is one of the few states in the United States that does not impose state income tax, or tax businesses at the corporate level. If Wyoming is your business’s home, and you elect to be taxed as a C Corporation, then this lack of state taxes is a large plus. Clients should see the advice of their CPA and attorney on items pertaining to an out of state setup.
- Increased Flexibility Another benefit of incorporating a limited liability company in Wyoming is that it can be set up as a series LLC. This type of company allows business owners to segregate assets and liabilities into different categories – for instance, you can allow each LLC to own a different property while under one ownership umbrella associated with them. This type of arrangement is great for an LLC that owns several different pieces of real estate, especially if those assets are in different states.
- Low Maintenance Costs Maintaining a Wyoming LLC is cost-effective. The state has lower annual reporting feeds and minimal ongoing compliance requirements compared to other states. This means that real estate investors can allocate more of their resources to property acquisition and management rather than administrative expenses.
- No Citizenship Requirements You do not need to be a resident of Wyoming or even a citizen of the United States in order to form an LLC in Wyoming and enjoy the business benefits thereof. If you are a U.S. citizen and wondering why that might matter, consider whether or not you will ever have foreign investors, managers, or members involved in your LLC.
Real estate investors from all over the U.S. choose a Wyoming LLC as their preferred entity for property ownership due to the numerous advantages it offers. Consider these benefits and consult your attorney and CPA for the best situation for your ownership entities.
Looking to expand your real estate investments? Contact us anytime and we would be happy to help you find the right property for your goals.
