Wyoming Corporation Advantages and Disadvantages

Wyoming Corporation
Advantages and Disadvantages

Wyoming Corporation:

Wyoming Corporation - Articles of Incorporation must be drafted and submitted to the Wyoming Secretary of State, Corporations Division. Once articles of incorporation have been successfully filed, your Wyoming Corporation has been formed and this begins its existence as a Wyoming corporate entity.

Wyoming License Requirements

Wyoming requires most businesses to obtain a license and pay a fee if operating in the state. Please check with the state of Wyoming to make sure your business is complying with the license requirements for your particular profession.

Should I form an Wyoming Corporation?

A corporation, chartered by the state in which it is headquartered, is considered by law to be a unique entity, separate and apart from those who own it. A corporation can be taxed; it can be sued; it can enter into contractual agreements. The owners of a corporation are its shareholders. The shareholders elect a board of directors to oversee the major policies and decisions. The corporation has a life of its own and does not dissolve when ownership changes.

Wyoming Corporation: Advantages and Disadvantages

Advantages of a Corporation

Shareholders have limited liability for the corporation's debts or judgments against the corporations.
Generally, shareholders can only be held accountable for their investment in stock of the company. (Note however, that officers can be held personally liable for their actions, such as the failure to withhold and pay employment taxes.)
Corporations can raise additional funds through the sale of stock.
A corporation may deduct the cost of benefits it provides to officers and employees.
Can elect S Corporation status if certain requirements are met. This election enables company to be taxed similar to a partnership.
A corporation pays 15% federal income tax on taxable income up to $50,000; 25% tax on income from $50,001 - $75,000; 34% tax on income from $75,001 - $100,000; 39% tax on income from $100,001 - $335,000; and 34% tax on income over $335,000.
A sole proprietor who filed a federal income tax return under the status of married, filing jointly, would pay 15% federal income tax on taxable income up to $35,800; 28% tax on income from $35,801 to 86,500; and 31% tax on income over $86,501.

Disadvantages of a Corporation

The process of incorporation requires more time and money than other forms of organization.
Corporations are monitored by federal, state and some local agencies, and as a result may have more paperwork to comply with regulations.
Incorporating may result in higher overall taxes. Dividends paid to shareholders are not deductible form business income, thus this income can be taxed twice.

Federal Tax Forms for Regular or "C" Corporations

Form 1120 or 1120-A: Corporation Income Tax Return
Form 1120-W Estimated Tax for Corporation
Form 8109-B Deposit Coupon
Form 4625 Depreciation

Wyoming�s Business Tax Climate Ranks 7th

Wyoming ranks 7st in the State Business Tax Climate Index, which measures the impact on business of five major elements of the tax system: the percentage of income taken by all taxes, the individual income tax rates, the corporate income taxes, the sales tax rate, and the complexity of the tax system. Neighboring states ranked as follows: Montana (17th), South Dakota (1st), Nebraska (35th), Colorado (8th), Utah (26th), and Idaho (31st).

Wyoming�s State/Local Tax Burden among the Nation�s Bottom Ten

For most of the past 14 years, Wyoming�s tax burden has experienced a steady decline. Estimated now at 8.9% of income, Wyoming�s state/local tax burden percentage stands at 44th nationally, well below the national average of 10.0%.

Wyoming Levies no Personal Income Taxes

Wyoming levies no individual income taxes, joining six other states with the same policy. This makes the tax environment in Wyoming very competitive compared to other states.

Wyoming Levies no Corporate Income Taxes

The state of Wyoming, in addition to collecting no personal income taxes, collects no corporate income taxes as well. Only four other states (Nevada, Texas, South Dakota and Washington) join Wyoming in levying neither income tax.

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