Wyoming vs Delaware LLC: Which is better for you?

You’ve finalized and came to the decision that you would like to start a Limited Liability Company, but the question remains – where exactly should you form it? Most experts claim that forming an LLC in your hometown can prove beneficial, but that can be quite a misconception in a few cases, especially if your hometown is not fit for forming an LLC. Most new entrepreneurs are stuck between choosing Wyoming or Delaware for their LLC.

Keep reading to find out which state is best suitable for your LLC!

TL;DR: What is doola’s recommendation on Wyoming vs Delaware?

You should read the full guide below but we’ll cut to the chase.

doola’s recommendation is:

• We recommend Delaware only if you have plans to in the future convert your LLC to a C Corp (to raise venture capital from U.S. investors) or you really want the “prestige” of saying your company is from Delaware. Some customers say this matters to them and if it does, it is your business, your choice!
• Otherwise, we recommend Wyoming. Why? Wyoming is the most popular state for non-residents who are online businesses, e-commerce businesses, or business owners who want a easy and simple way to form and manage their company. It’s the most popular state among doola customers, has lower annual fees ($50 vs $300 in Delaware), a low filing fee ($100), was the first state to ever create the LLC. Also don’t sleep on Wyoming’s prestige as well; it has a friendly business environment and has even been called “The Switzerland of the Rocky Mountains.”

Forming an LLC in Wyoming

Wyoming has a good business reputation and is widely known as the state that gave birth to LLC. It proves to offer a healthy, competitive, yet friendly environment to new and small business owners. Some of its benefits include:

• Tax Benefits: The rate of sales tax is at a meagre 4%, and along with that, no franchise or income tax is being levied on business owners. This helps small and new businesses get on their feet, as their funds can be limited in the beginning.
• Lesser paperwork required: Wyoming gets rid of the need to submit official documents such as the operating agreement, the list of the first LLC members, which makes paperwork for small businesses relatively easier. It also reduces the burden that one might have in the initial phases of operating a small business.
• Privacy Protection policies: The establishment of privacy protection policies that include not being liable to name the company owners to make it easier to operate the company itself.

Forming an LLC in Delaware

Delaware is quite famous for a few of its LLC policies, which prove to be quite beneficial for them, such as:

• Legal Protection: The legal protection laws and court system in Delaware have been designed in such a manner that it makes it more efficient to deal with legal business dealings, such as disputes in the corporate sector. These cases are then dealt with in a way that is business-friendly and not hostile in the least.
• Tax advantages: Delaware has multiple tax benefits. Sales tax, inventory tax, capital shares tax, value-added tax, and stock transfer tax, along with a few others, are not levied on LLCs.
• Easy and efficient registration process: In a hurry to see your business off the ground and up and to run? Filing for incorporation might take some time, but the process can be sped up if an extra $100 rush fee is provided. If you’re desperate to get your business running as soon as possible due to a time constraint, Delaware is your best option.

Pricing factor

It is included in our package to inform customers about Wyoming and Delaware’s annual state fees. The costs are comparatively lesser in Wyoming, i.e., a $60 annual filing fee, which is to be paid to the state every year.

The annual state fee for Delaware is a franchise tax fee of $300. It is best to opt for Wyoming for individuals who might be constrained in the fund’s section as it is a comparatively inexpensive option.

doola is at your service!

Are you looking for a professional and affordable option to launch and grow your US LLC business? If yes, then you’re at the place! Let our experts handle your LLC formation and make the setup process super easy for you. Contact us now for further details.