The limited liability company (LLC) has been an incredibly popular business structure for decades, but in the grand scheme of things, it’s still a relatively recent addition to the American business landscape.
There are actually still new variations of the LLC popping up across the country, with the most popular one being the series LLC.
The series LLC is only available in certain states, including Wyoming. A series LLC is a collection of LLCs that are grouped under one parent LLC. This enables businesses to separate different parts of the company into separate LLCs, allowing them to isolate the liabilities of each segment from the others.
Because the series LLC is still relatively new in some states, we get a lot of questions about what exactly the series LLC is, and how you can form one. That’s why we decided to write these articles, which break down how the series LLC formation process works in each state.
If you’re interested in forming a series LLC in Wyoming, read on to find out how it’s done.
That said, if you’re looking for a time-tested way to protect yourself and personal assets as a business owner, the traditional LLC is the way to go. You can either form it yourself or through an LLC service.
What Is a Series LLC?
Let’s start by briefly covering what a series LLC actually is. In general, a series LLC is exactly what it sounds like ― it’s a collection of LLCs that operate under the umbrella of a master LLC. While each LLC in the series is part of the larger company, this business structure also keeps each LLC financially insulated from the others. In theory, this means that a lawsuit against one of the LLCs should have no effect on the others in the series.
Each LLC in a series has the same limited liability protections that a standard LLC has, meaning that if you’re sued, creditors can only come after your business assets rather than pursuing your personal possessions. While a series LLC does still protect your personal car, house, bank accounts, etc., it also protects the other LLCs in the series from the lawsuit. In other words, creditors can only pursue the assets of one LLC, rather than the entire series.
How Can I Form a Series LLC in Wyoming?
Choose a Name for Your Series LLC
The first step to forming any type of LLC is to first select a name for your new business. You should choose a name that is memorable, and also one that briefly describes what your business does, or what your organization stands for. You will also need to run a business name search to make sure your chosen name is available in Wyoming, and isn’t already being used by another company.
Also, you’ll need to include either the phrase “limited liability company” or the letters “LLC” in your business name, along with the word “series.” Finally, you cannot include any terms that refer to specific business types ― like “bank” or “hospital” ― unless you actually run one of those businesses, and you also can’t use any words that refer to other business types, such as “incorporated” or “inc.”
Additionally, it’s important to note that in Wyoming, each segment of your series LLC must include the parent LLC’s name. However, each LLC in your series must have a different name from the others, and there are strict rules regarding how these LLCs can be named.
For example, if your parent LLC is called “Scott’s Foods LLC,” and you want to differentiate your fine-dining LLC from your fast-casual LLC, you could name these segments “Scott’s Foods LLC – Fine Dining – Series 1” and “Scott’s Foods LLC – Fast Casual – Series 2.” The state of Wyoming provides the rules for this process in Section 2 of their series LLC administrative rules document.
For more info on naming an LLC ― whether that’s a series LLC or a traditional LLC ― check out our comprehensive guide to naming an LLC.
Designate a Registered Agent
Next, you’ll need to choose a registered agent for your series LLC. The registered agent must have an office located in Wyoming, and they must be available to receive document deliveries from the state during all standard business hours.
You don’t need to worry about designating different registered agents for each segment of the LLC, as you can have the same registered agent for every LLC in the series if you want to.
Finally, your registered agent will need to fill out the “Consent to Appointment by Registered Agent” form, which you will submit to the state along with your series LLC formation documents in the next step.
Prepare and File the Series LLC Articles of Organization
In some states, traditional LLCs and series LLCs are allowed to use the same document to form their businesses, but Wyoming has two different versions of the articles of organization. To form a series LLC, you’ll want to use the document titled “Series Limited Liability Company Articles of Organization.”
Overall, Wyoming’s Series LLC Articles of Organization is a relatively simple document. In it, you need to inform the state of your business name and address, along with your registered agent’s name and address. Then, you’ll need to include the text from Wyoming Statutes 17-29-211(b) and (c), which ensures that each LLC within your series will have limited liability protections.
The next step is to include the name of each LLC within your series, and to have your LLC organizer sign and date the form. Finally, you can submit your completed Series LLC Articles of Organization document to the Wyoming Secretary of State’s office, along with your $100 formation fee.
Acquire an EIN
Next, you should obtain a federal tax ID number known as an Employer Identification Number (EIN) from the Internal Revenue Service for each LLC in your series. The EIN is essentially a Social Security Number for your business, as it is a nine-digit numerical code that you can use to identify your business on tax forms, and it also helps you open business bank accounts and hire employees.
It’s quite easy to get an EIN from the IRS. All you need to do is fill out the free form located on the IRS website, and you’re good to go. You will receive your number immediately upon filing.
Create a Series LLC Operating Agreement
The state of Wyoming doesn’t strictly require traditional LLCs to have operating agreements, but the way their series LLC laws are phrased, we believe they are required of series LLCs. This is due to the fact that the state has some requirements for the information they want included in a series LLC’s operating agreement. Obviously, if you didn’t need an operating agreement, they wouldn’t have requirements for its content, would they?
Even if it wasn’t an actual legal requirement, we would still strongly recommend that all of our readers create this important document. An operating agreement describes many aspects of how your series LLC will operate. In this agreement, you’ll outline what the different segments of your series LLC are, indicate the roles of each member/owner, detail the owners’ voting rights, and explain the financial contribution and allocation plans.
You should also indicate whether you want your business to be managed by its members or by a manager, discuss how an owner can be replaced if necessary, and outline a dissolution procedure in case you ever need to close up shop.
In addition, the operating agreement is a great place to describe the purpose of each individual LLC in your series. You probably don’t need to create a separate operating agreement for each LLC, but it’s a good idea to explain what each one is for in this document.
Finally, Wyoming requires that you designate in your operating agreement that each individual LLC in your series enjoys limited liability protections. Without including this notice, it’s unclear whether your series LLC would actually have these liability shields between each LLC segment.
Create a Financial Infrastructure
It’s crucial for any LLC to open a business bank account, as this helps you maintain the separation of personal and business finances that is required of all formal business entities. However, there’s an extra layer to this step for series LLCs, as you’ll need to open a bank account for the series’ parent LLC, as well as for each of the separate LLC segments under its umbrella.
If you fail to open a separate bank account for each segment, you will run the risk of losing the isolated liability of each LLC in the series. You need to be able to prove that these segments are truly separate if you want to maintain the liability shields between them.
In addition, this would be a good time to either hire an accountant or purchase accounting software for your series LLC. For traditional LLCs that don’t have particularly complex accounting needs, it’s usually sufficient to use accounting software, but a series LLC is a bit more complicated, and we therefore prefer hiring an accountant to make sure everything is done correctly.
Obtain Licenses and Permits
There is no general business license required to operate a business in Wyoming, but that doesn’t mean you won’t need any licenses or permits to operate your series LLC in compliance with state laws. First and foremost, if you sell products or services in Wyoming, you’ll need to apply for your excise tax permit.
Additionally, the state has a variety of professional licenses that are required based on the industry you operate in. For more information on these licenses, check out the Wyoming Business Permitting and Licensing Guide. Keep in mind that you may also need to get licenses or permits from your county or municipal government agencies, so make sure to check with the relevant entities in these jurisdictions.
Understand Maintenance Requirements
Wyoming requires that all LLCs file annual reports. This is a simple report which keeps the state updated regarding some crucial details of your business, like your business name and address, and the names and addresses of your owners or managers.
The fee for this report is somewhat complex, as there is no flat fee. Instead, “the fee is $50 or two-tenths of one mill on the dollar ($.0002), whichever is greater.” This fee is calculated based on the value of the company’s Wyoming-based assets.
Can I Hire Someone to Form My Series LLC?
When forming a series LLC in Wyoming, you generally have two options. You can tackle the DIY route, or you can hire an attorney. In some other states with series LLCs, you can form one by using Northwest Registered Agent’s formation service, but unfortunately they do not offer this service in Wyoming.
Of these two options, we prefer hiring a lawyer. Yes, this can be an expensive route, but the series LLC is rather complex, so we think it’s definitely a good idea to hire a reputable business attorney to create your formation documents.
If you’re supremely confident in your abilities to form a compliant series LLC, we won’t stop you from giving it a shot. However, for the vast majority of our readers, hiring a lawyer is the smarter option.
The process of forming a series LLC in Wyoming isn’t too terribly different from the formation process for a standard LLC. However, you do need to make sure that you use the correct version of the Articles of Organization, and also include the required notice in both that document and your operating agreement.
At the end of the day, if you want to skip the hassles and worries that come with forming your own Wyoming series LLC, you always have the option to hire an attorney to handle it for you.
We hope this article helped you develop your understanding of how to form a series LLC in Wyoming!