A Wyoming LLC Operating Agreement is a document used by the owners or members of a business to outline ownership, capital contribution, define member responsibilities, layout how profits and losses are shared, and establish operations.
LLC members often create an operating agreement to protect their assets and avoid double taxation by ensuring their profits and losses go through their income. The following state Statues provide legal definitions and governing laws relating to a Wyoming LLC operating agreement:
Wyoming Limited Liability Company Act: Title 17, Chapter 29
Operating Agreement laws: § 17-29-110
State definition: § 17-29-102(xiv)
Types of Operating Agreement
A Wyoming LLC operating agreement can be used by both single-member LLCs and multi-member LLCs:
Single-member LLC operating agreement
A single-member LLC operating agreement enables the sole proprietor to outline policies and procedures that best suit the size of the business.
Download: Microsoft Word (.docx)
Multi-member LLC operating agreement
A multi-member LLC operating agreement is used by LLCs with more than one managing member.
Download: Microsoft Word (.docx)
Benefits of Operating Agreement
A few of the benefits of the operating agreement are listed as:
A Wyoming LLC operating agreement can help prevent disagreement that may arise among members. In addition, the document provides a point of reference for any issues or misunderstandings members may have regarding the structure and management of the business. As a result, Multi-member LLCs are likely to gain the most from this benefit.
The LLC operating agreement ensures the member’s assets are protected against lawsuits filed against the business in a court of law. It achieves this by enabling members to separate their personal and business assets. The LLC members, therefore, are placed in a stronger legal position.
Businesses that implement an LLC operating agreement can use it as additional proof of the validity of the entity. Proof of an entity’s validity enables banks to allow the LLC to open a business bank account or apply for loans. The ability of an LLC to access banking services ensures that operations are smoothly carried out.
A Wyoming LLC operating agreement enables an LLC to decide on a profit-sharing formula that suits the company’s best interests. It also ensures that members decide on a management structure that will suit the operations of the LLC. Such operational flexibility ensures that the state does not interfere with how the business should be run.
The LLC operating agreement helps the business portray an organized perception before the eyes of potential partners or investors. In addition, investors and partners are likely to be attracted to the business because of the document’s outlined operational and management structure. The LLC is, therefore, able to grow and develop ties with third-party investors.
LLCs in Wyoming are not legally required to have an operating agreement; however, it is recommended that businesses have it in place. The LLC operating agreement will help the business regulate its internal structures and operations. All members of the LLC must be part of the formation and signing of the operating agreement.
Information to be Included
Businesses must understand the information necessary to structure a Wyoming LLC operating agreement. It also ensures that all aspects of the business are indicated in the Wyoming LLC operating agreement.
The following information should be included in an LLC operating agreement in Wyoming:
The Wyoming LLC operating agreement should contain the date when the LLC was formed, the names of its members, and how ownership has been divided among them. The provision of the organization’s information will ensure that basic details regarding the LLC are mentioned.
All members must ensure that they agree with how ownership is divided before the information is indicated in the LLC operating agreement.
Management and voting
The LLC operating agreement should outline whether an appointed manager or a member manages the business. For example, LLCs managed by an appointed manager are categorized as manager-managed LLCs, while those managed by the members are categorized as member-managed LLCs.
The Wyoming LLC operating agreement should also outline the voting structure members have decided to use. For example, the document may state that each member has one vote or that some members have more voting power than others in some instances.
Withdrawal of the members
An operating agreement should outline the terms, and conditions members should follow to withdraw from the LLC. Wyoming’s Limited Liability Act stipulates that members must comply with the terms and conditions stipulated in the operating agreement when withdrawing from an LLC.
In LLCs where no withdrawal terms have been implemented, the withdrawing member will have to seek the approval of the other LLC members.
The Wyoming LLC operating agreement should outline how profits will be distributed among members of the business. The LLC can opt to divide profits equally or according to a member’s capital contribution. If the LLC opts for a different approach, it should be outlined in the LLC operation agreements.
The operating agreement should outline the situations that may warrant the dissolution of the LLC and the process that should be followed. Members may sight that failure to adhere to the terms of the operating agreement may lead to the dissolution of the LLC. Therefore, all members should comply with the set dissolution procedures and policies outlined in the agreement.
Transferability of interests
The Wyoming LLC operating agreement should state whether the company interests can be transferred. A member can transfer their company interests without the consent of other members even when the operating agreement does not address transferability. A member may also opt to have other members sign off on the transferability of interests.
Operating Agreement Template
We understand that creating a Wyoming LLC operating agreement can be time-consuming and difficult, especially for new businesses. However, free downloadable Wyoming LLC operating agreement templates given here are easy to use.
They will help guide you through the formation of your document. These templates will also ensure that all aspects of your business’s operations are incorporated into the agreement.
Starting an LLC in Wyoming
Before a Wyoming LLC operating agreement can be implemented, a Limited Liability Company must be formed. When forming the LLC, Wyoming state requirements must be met. Understanding how to start an LLC will ensure that members have adhered to the state laws.
The following is a step-by-step process on how to start an LLC in Wyoming:
First, the LLC should appoint a registered agent. The registered agent will accept legal papers on behalf of the LLC if it is issued. The LLC should ensure that the registered agent meets the requirements described in Wyoming Statute § 17-28-101. The registered agent’s street address must be indicated in the LLC’s Article of Organization.
Name of LLC
Secondly, the business should select a name for the LLC. The name must be easily distinguishable from those used by other businesses. The availability of the name must be checked in the name business databases of the Wyoming Secretary of State website. The name can be reserved by filing an Application for Reservation of Name with the Wyoming Secretary of State.
Next, filing fees for the LLC’s application documents must be paid. The LLC will be required to pay a filing fee of $100 with the Secretary of State. An LLC applying online can make the fee payment with a credit card.
A check should be attached to the application documents when paper applications are filed. The filings should be sent to Wyoming Secretary of State, 2020 Carey Avenue, Suite700, Cheyenne, WY82002.
Submit the application
Finally, all application documents should be submitted to the Secretary of State in Wyoming. The LLC should complete the documents before submitting them. LLCs must confirm that they have filed all the mandatory state-required application documents before submission, such as the Article of Organization.
Article of Organization
The Article of Organization is a document used to form the LLC with the Wyoming Secretary of state. LLC members must be well informed of the elements of a Wyoming LLC Article of Organization. The following should be contained in a Wyoming LLC Article of Organization:
An Article of Organization should contain the company’s name. The end of the company’s name should contain’ Limited Liability Company, ‘Limited Company,’ or an appropriate abbreviation such as LLC. Failure to adhere to this may lead to a rejection of the filing.
Close LLC election
Members of the company should indicate whether they are forming a close, foreign, or professional LLC. Members who want to form a small, family business to ensure more control over the entity should select the close LLC option. A close LLC can help members make it harder for outside parties or creditors to receive controlling membership interest in the company.
The name of the individual or business selected as the registered agent should be indicated in the Article of Organization. In addition, the agent’s address will be included in the permanent public records of the LLC.
The Article of the Organization should contain the LLC’s mailing and principal address along with the street address. The LLC’s mailing address will enable it to receive state notices, while the principal office address ensures that the business office address is provided.
The organizer’s name and address should be indicated in the Article of Organization. The organizer is the person filing the Article of Organization. The organizer does not need to be a member of the LLC.
A contact name, number, and email of a member must be provided for future correspondence. The details will be placed in the LLC’s permanent public records. In addition, members can opt to have the party hired to form the Wyoming LLC indicate its contact details.
Appointment by registered agent
The appointed registered agent must sign a Consent to Appointment form with the Wyoming Secretary of State. The registered agent’s consent ensures that written proof is provided that the agent agreed to represent the LLC. If filling takes place online, a simple check box may suffice to indicate the agent’s consent. However, if filing is done by paper, the form will be required.
What’s Next After LLC Formation?
Specific guidelines should be followed after the LLC is formed. Understanding these steps will ensure that the LLC’s operational requirements are met. It will also ensure that LLC can distinguish itself as a legitimate business. The following are the next steps that the LLC should take:
First, the LLC should obtain an Employer Identification Number, also called a Federal Employer Identification Number. The EIN will help ensure that the LLC can legally carry out certain financial transactions.
It can also help the IRS identify the business, just as it uses the Social Security Numbers in identifying individuals. LLCs in the state of Wyoming will have to complete a Form SS-4 with the IRS, which can be filed online
Draft operating agreement
Secondly, the LLC should draft a Wyoming LLC operating agreement. The LLC operating agreement will give the business a blueprint of how it is run and managed. It will also help the LLC meet its specific needs.
Open bank account
Thirdly the members of the LLC should open a bank account. The account should be separate from all personal accounts. It will help members to make purchases for the LLC, pay workers and their taxes. The bank may request copies of the LLC’s Article of Organization, EIN, and operating agreement.
Next, the members of the LLC should put funds into the bank account. The amount contributed by each member should be well documented. The bank statements must be kept ensuring proof of the collected contributions.
Report and taxes
Finally, the members should educate themselves on tax and report requirements in Wyoming. They must develop a clear understanding of the reporting and tax structure that the state can keep the business accountable.
Frequently Asked Questions
The LLC operating agreement is not required in Wyoming. It is, however, recommended that businesses have an LLC operating agreement implemented. It will help members separate their personal and business asses. It will also help members outline how the LLC is run and managed.
An operating agreement can be formed before the Article of the Organization is filed or after the LLC is formed. However, banks may request a copy of the operating agreement; therefore, it is advisable to form it before forming the LLC.
The cost of starting an LLC in Wyoming will fluctuate depending on the type of LLC, business permits, and licenses required. It will also be determined by the filing fees, method of filing, i.e., online, or paper, and annual license tax required.
However, the main cost of starting an LLC in Wyoming is $ 102. The fee is paid to file an Article of Organization with the secretary of state online. If filed via mail, a fee of $100 is paid.
Immediately after the Article of Organization has been filed online, the fee payable received by the Secretary of State, and the information approved, the LLC can start. If the process is carried out via mail, it may take 5 to 7 business days.