Wyoming Close Corporation

Start Your Business The Right Way: Pros And Cons Of Wyoming Close Corporation

Wyoming offers business entity structures for small businesses called the “Statutory Close Corporation Supplement” for Corporations with a limited number of shareholders. This option is available to Wyoming corporations with 35 shareholders and may be appealing to family-owned businesses or small business partnerships.

Wyoming Close Corporations have fewer regulations and can operate in a more informal manner similar to a partnership. This structure is often chosen by entrepreneurs and founders in Wyoming due to its flexibility and simplicity. The Statutory Close Corporation Supplement allows small companies to bypass some traditional corporate formalities, such as electing a board of directors or holding annual meetings, yet still keeping the more prestigious C-Corporation business entity type.

If you opt for a Wyoming Close Corporation, then you can simply choose that entity type on our Wyoming incorporation forms when ordering.

What Is A Wyoming CLose Corporation?

A Wyoming Close Corporation is a type of business entity that is formed under the laws of the state of Wyoming. It is characterized by having a maximum 35 shareholders and providing them with greater control over the management and direction of the company. Wyoming Close Corporations offer more flexibility in terms of management structure, shareholder rights and responsibilities, and may have more relaxed regulatory requirements compared to other forms of business entities.

The Wyoming Close Corporation is designed for corporations in Wyoming with a limited number of shareholders, typically those with close relationships such as family, friends, or small business partners. This unique relationship allows Close Corps to operate with fewer regulations, similar to partnerships. The laws for close corporations in Wyoming permit small corporations to forgo many traditional corporate formalities while still enjoying the benefits.

Unlike traditional business corporations, Close Corporations do not need a board of directors, leading to reduced paperwork for ongoing operations.

Key Characteristics of Wyoming Close Corporation:
  • Limited Shareholders: A corporation can only be considered a Close Corporation if it has no more than 35 shareholders.
  • Legal Basis: The Wyoming Statutory Close Corporation Supplement to the Wyoming Business Corporation Act (W.S. 17-17-101 et seq) provides the legal basis for a Close Corporation.
  • Abbreviated Governance: Shareholders may opt for abbreviated governance by agreeing in writing to operate as a partnership, without a board of directors, no annual meetings, and a shareholder agreement (which must be stated in the Articles of Incorporation).
Converting to a statutory Close Corporation:

Previously incorporated corporations in Wyoming can change to a Wyoming Close Corporation if the shareholders choose to do so.
It is important to note that, if incorporated before January 1, 1990, all shareholders must agree to transform the corporation into a Close Corporation, which can be stated in the Articles of Incorporation or in an amendment. For corporations incorporated after January 1, 1990, then 66% (2/3) of the shareholders must agree.

Don’t Confuse Close Corporation Types: A Wyoming Close Corporation is not the same as a “Closed Corporation” or “Closely Held Corporation.”

The Wyoming Close Corporation is formed under specific state corporation laws and formally it is Wyoming Close Corporation.

The term “Close Corporation” or “Closed Corporation” or “Closely Held Corporation” is often used to describe a private corporation formed under regular state corporation laws where the stock is not publicly traded. This is different from a statutory close corporation, which is created under special state laws.

Not all corporations referred to as “Close Corporations” or “Closed Corporation” or “Closely Held Corporation” are statutory close corporations. To be a statutory close corporation, the corporation must be formed in a state that allows this option and have the appropriate language in its articles of organization.

Advantages Of Incorporating A Wyoming CLose Corporation

  • Limited Liability: Shareholders have limited liability, even with relaxed corporate formalities in operations.
  • Ease of Operation: Easy to operate without the formalities required in regular corporations, where hundreds of shareholders must receive information and vote.
  • Low Operating Costs: Relaxed corporate governance leads to lower legal, accounting, and administrative fees, reducing the overall cost of operation.
  • Restricted Transfer of Shares: Shares can only be transferred if all shareholders agree to a buy-sell agreement (with a few exceptions).
  • Unanimous Shareholder Consent: Company decisions must be made with the unanimous consent of shareholders (unless the Articles Of Incorporation gives full decision-making power to a single shareholder).
  • Deadlock Prevention: The court is accessible in cases of shareholder deadlock to prevent harm to the Close Corporation through lack of action.
  • Buy-Out Provision also known as Compulsory Purchase of Shares on Death (Optional Provision): Shareholders can buy out a deceased shareholder’s interest according to the shareholder agreement. Wyoming Stat § 17-17-114 permits the option of including a provision for the compulsory purchase of shares upon the death of a shareholder. This provision offers two benefits:
    – Guaranteed compensation for the shareholder’s heirs after death
    – The corporation retains control over who is allowed to be a shareholder in the company.

In addition, close corporations in Wyoming may choose to operate as partnerships, meaning they need not have a board of directors, hold annual meetings, or draft written resolutions, as long as these policies are included in the Articles of Incorporation.

A Wyoming Close Corporation also shares the same benefits as a regular Wyoming corporation, including:
  1. Greater privacy and anonymity: Wyoming has strict privacy laws that provide a higher level of privacy for businesses, and it may be a better option for those who value their privacy and anonymity. In terms of privacy protection, Wyoming allows the establishment of anonymous LLCs and Corporations through state-registered agents. Through these services, business owners wouldn’t need to list their information on public paperwork when registering their business. Wyoming also offers lifetime proxy for corporations, which means you can appoint someone else as a nominee to represent your stock or shares and vote on your behalf. This allows the legal owner of the shares or stock to remain completely anonymous.
  2. Lower Fees: Wyoming has lower fees for incorporating a business and maintaining the corporation’s articles of incorporation.
  3. Ease Of Formation: Incorporating in Wyoming is generally easy, the process is simple and less time-consuming, and there are fewer requirements for businesses to meet. After filing the necessary documents to the Secretary of State Of Wyoming, a corporation is usually formed within a few business days.
  4. No Business License Requirement For Most Businesses: Fortunately, there is no general Wyoming business license per se. For most businesses in the state of Wyoming, a business license isn’t necessary, so there are no extra fees to pay or forms to file. You must only pay for an annual report and maintain a registered agent in Wyoming.
  5. Fewer Requirements: Wyoming has fewer requirements for maintaining corporate records and holding annual meetings. This is especially true with Wyoming Close Corporations that have reduced reporting and other bureaucratic requirements. These benefits drive new companies to Wyoming every day.
  6. Favorable Tax Treatment: Wyoming has no state corporate income tax, which can be a significant advantage for businesses looking to minimize their tax burden. Wyoming does not tax out-of-state income, which means that even if the majority of your business is conducted elsewhere, it won’t be taxed by the state.
  7. Business-friendly Environment: Wyoming has a reputation for being a business-friendly state, with a relatively simple and straightforward process for incorporating a business.
  8. Certificate Of Good Standing is FREE: Unlike many other states, including Delaware, Certificate Of Good Standing for an LLC or Corporation is free of charge in Wyoming and can be easily obtained online at the Wyoming Secretary of State’s website.
  9. Annual Report Due Date: Annual Reports for corporations and LLCs are due on the first day of the anniversary month of formation. For example, if your ‘initial filing’ date is December 30th, your Annual Report is due December 1st of each year.

Potential disadvantages of a Wyoming close corporation

Generally, Wyoming Close Corporations are viewed as a favorable and versatile option for small to medium-sized businesses. However, there could be some drawbacks, such as:

  • Restrictions On Transferring Shares: Transfer of shares is prohibited except in stated circumstances in the Articles Of Incorporation.
  • Limited Access To Capital: The limit of 35 shareholders restricts the amount that can be raised from them.
  • The Requirement For Unanimous Consent On Major Decisions: The requirement for unanimous consent on major decisions may become a drawback.
  • Limited Communication: A Close Corporation assumes frequent communication with the company’s officers. If communication is lacking and there are no annual meetings or official announcements, it may be easy to become disconnected. Having increased reporting requirements can be beneficial in situations where shareholders are not as familiar with each other.

Taxation of Wyoming close corporations

Wyoming Close corporations are taxed like regular corporations as C-corps by default, incurring a 21% federal corporate income tax and shareholders paying taxes on dividends received. Wyoming offers a tax advantage, with no state corporate or individual income tax.

By filing Form 2553 with the IRS, close corporations in Wyoming can opt for S-corp status, avoiding corporate income tax as a pass-through entity. But, S-corp status requires paying a “reasonable salary” to any shareholder working for the corporation, which is subject to the 15.3% federal self-employment tax. It is important to consult with an accountant before deciding on S-corp status.

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When choosing a name for a business in the United States, it is important to consider a few key factors including availability, distinctiveness, legality and branding.

If you are setting up a Limited Liability Company (LLC) or a Corporation, you will also need to include a designator (suffix) in your business name, such as “LLC” or “INC.” This will help to differentiate your business from other types of legal entities.

Please click here to find out more.

It is not easy to determine which type of business entity, an LLC or corporation, is best for you as it depends on multiple factors such as your business goals, the nature of your business, and your individual circumstances.

If you are a U.S. person / U.S. resident please click here to find out more.

If you are a non-U.S. person / non-U.S. resident please click here to find out more.

Wyoming is a leading incorporation domicile due to low fees, no taxes, simple filing and maintenance requirements along with allowing anonymous LLCs and corporations.

For more information please click here.

If you are a U.S. resident not living in Delaware or Wyoming, the best state to form your business depends on various factors. Typically, it’s advantageous for a U.S. citizen or permanent resident to form the business entity in their home state. However, for most businesses forming a company in Wyoming is also a great choice.

If privacy and anonymity are important to you, forming a Holding Company in a state like Wyoming may be a better choice. Holding Companies can choose their domicile as they are only considered as transacting business if they engage in activities beyond holding assets and leasing them.

For further information, click here.

Common choices for a holding company (a.k.a parent company) are Wyoming, Nevada, Delaware and New Mexico. Wyoming is currently the leading state to form a Holding Company (LLC or Corporation) due to the specific statutes, anonymity, asset protection and comparatively low fees.

Please click here to find out more.

In order to incorporate in Wyoming, you need to have a company name, business address, registered agent, share count, par value, and incorporator. These are the only requirements by law to establish a corporation.

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Yes, as a non-U.S. person / Non-U.S. resident / International Entrepreneur / International Founder / Digital Nomad you can form an LLC or C-Corp in the United States. In fact, it is not even necessary to physically visit the U.S.A, as it is possible to set up your LLC or C-Corp online.

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You don’t need an SSN (Social Security Number) or ITIN (Individual Taxpayer Identification Number) to get an Employer Identification Number (EIN) from the IRS. An Employer Identification Number (EIN), also known as a Federal Tax Identification Number or a Federal Business Tax ID, is used to identify a business entity not an individual. You only need an SSN (or ITIN) if you want to apply for an EIN online with the IRS.

We have business formation packages for Non-U.S. owner(s) that includes EIN application for a discounted fee of $150. You can also hire us to obtain your EIN from the IRS for a fee of $175.

An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue Service (IRS) for individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain, a Social Security Number (SSN) from the Social Security Administration (SSA). ITINs are issued to foreign nationals and others who have federal tax reporting or filing requirements and do not qualify for SSNs.

The first step is to get an EIN from the IRS. You cannot open up a U.S. bank account without an EIN for your LLC or Corporation.

The easiest option is to opening up a business bank account online with a Fintech company like Mercury, Novel etc.

Another solution is to visit the United States yourself.

For other options and more information to open up a U.S. business bank account please click here.

Wyoming is a leading incorporation provider with low fees and no corporate income taxes. Delaware is generally only used by those raising venture capital or looking to go public.

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How Triple B Business can help in starting your new company?

The fastest, easiest way to start your new company? Hire us and get everything you need: registered agent service, privacy, free mail forwarding, and the guidance of local experts.

We currently offer Business Formation Services only in the States of Wyoming and Delaware because these two great states offer multitude of advantages to new small business owners.

Here’s how you can start the process with Triple B Business today in 3 easy steps:


Tell Us Your Business Name

If you have already decided your new business name then simply enter it on our form. We will perform a free name search for you with the state.


Answer A Few Questions.

Answer a few questions and enter the required information on our business formation form. If we have any questions then we will get back to you.


We Will File Your Paperwork

We will complete your paperwork and be off to the races filing your new company with the state.

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