United States business owners, as well as entrepreneurs that are considering to operate from within the States, have considered Wyoming to be a top choice to register their business. This is due to a number of factors, namely the simple online application system, taxation laws, and asset protection policies. The taxation in the state is so acclaimed that the state business tax climate index had awarded the state of Wyoming as the number one spot in North America.
Having asset protection should be as obvious as having health, home, or car insurance. However, it is often overlooked by many new entrepreneurs. Asset protection places creditors into a corner—forcing them into better settlements or, at times, can get them to dismiss the case completely. This is why it is important to invest in a complete asset protection plan rather than having to pay the price at a later stage.
An LLC, or a Limited Liability Company, enables a business owner or company to acquire more privacy and protection than traditional corporations. LLC’s are distinct and separate from their owners. This proves to be advantageous, as the owner is not liable for any debt or financial duress on the company’s part. An LLC can be founded by a separate business, a single person, or multiple members.
Personal Liability Protection
LLC entities have a unique feature that prevents creditors from claiming a member’s personal financial obligations directly from that of LLC assets. In states with robust charging order protection, such as Wyoming, creditors are unable to force the sale of the LLC’s assets; they, therefore, will have no choice but to wait for distributions. Wyoming is actually one of the few states that provide the same charging order protection to single-member LLC’s who do not have partner members to protect.
Protection from Business Liability
Running a business as an LLC provides “a corporate veil” that protects the owners from any liabilities that are associated with their business’s operations. This protection allows entrepreneurs to enter into business without the fear of risking their assets. This is why one of the biggest advantages of doing business as an LLC entity form is to prevent company obligations from transferring to its limited members, managers, officers, and employees. However, to accomplish this goal, the separate existence must be both recognized and respected.
Combine a Domestic Asset Protection Trust with a Wyoming LLC
Wyoming is currently one of only 16 states that allow domestic asset protection trusts. Business owners can protect their assets from future creditors by renouncing ownership to the trustee of an irrevocable asset protection trust. Entrepreneurs will still have access to the assets as long as they are the beneficiaries of the trust. A Wyoming Domestic Asset Protection Trust provides an extra barrier of protection for the LLC—keeping personal creditors away. Since the business is no longer technically owned by the owner, creditors are unable to pursue the business to satisfy personal obligations.
Assets that are held in a Wyoming LLC will benefit from a high level of anonymity. This is because the state does not retain electronic records of members or managers of the business. This means that it will be easier to prevent family members, creditors, and fraudsters from finding your information on a public database. Furthermore, annual reports will only require one person to be named, so if an agent is used to file an annual report– then the agent will be able to sign the report—leaving business owners anonymous. Wyoming Trust & LLC Attorney is an excellent resource for more information on registered agents; this website will also provide greater insight into asset protection planning.
Asset protection works to protect both the business and its investors. This business step is a vital component to ensure assets are safe and that legacies are able to be passed on through the generations. Family heirloom assets can be passed on to future generations and stay out of the grasp of creditors looking to collect. Asset protection provides peace of mind, even in uncertain times.
While there are various ways to go about protecting one’s assets, a Wyoming LLC is great for businesses as they keep personal and business liabilities separate from each other.