Start an Wyoming S Corp

S Corporation Requirements and Limitations 

S Corporations are designed to be straightforward small business entities. That said, the Internal Revenue Service requires you to fulfill certain requirements before you qualify to form an S Corp in Wyoming. A Wyoming S Corp must:

• Be a domestic corporation or other eligible business
• Have only certain kinds of corporate shareholders, including individuals, estates, exempt organizations, and certain trusts; but not partnerships, corporations, or non-resident immigrants
• Have no more than 100 shareholders
• Have no more than one class of stock
• Not be an ineligible corporation such as an insurance company, international sales corporation, or a certain kind of financial institution

Keep in mind that these restrictions will prevent an S Corp from easily generating capital from a wide shareholder pool. Therefore, we encourage you to check with your legal and financial professionals about your best business options when thinking about forming an S Corp in Wyoming. 

Pros and cons of creating an S Corp in Wyoming

S Corps, by their nature as IRS tax elections, are highly specific in their use. Because of that, we thought it helpful to list below some pros and cons to assist you in weighing your decision. 

Pros

Running an S Corp can be beneficial in many ways, such as:

• Protecting your personal assets
• Eliminating corporate double taxation
• Allowing you to use the cash method of accounting

If tax liability is driving your decision on what type of business entity to use, then an S Corp might be the right selection for you.

Cons

Of course, there can also be drawbacks to an S Corp, such as:

• Additional expenses for formation and maintenance
• Restrictions on issuing shares
• More extensive IRS oversight
• More stringent eligibility requirements

Above we touch on the most common pros and cons, but that doesn’t mean there aren’t more.  Consult with your legal or tax professional if you feel you need more information. 

What to know before creating an S Corporation in Wyoming

An S Corp designation isn’t for every business owner. Thus, at the outset, one of the first things to know about starting a business is that it’s a C Corp or LLC by default until you file the right paperwork and qualify to make it an S Corporation. But that said, let’s dig into a few more details about S Corps below.

What is an S Corporation?

Distilled down, S Corporations are designed to be small businesses that are usually governed as corporations but allow pass-through taxation. 

What’s the difference between an S Corporation and a C Corporation?

C Corps can issue more shares and classes of stock than an S Corp. That said, for many people, the biggest draw is how S Corps normally pay income taxes.

C Corporations suffer from the concept of double tax on their income because the business pays corporate income taxes and then each shareholder pays taxes on their dividends. On the other hand, S Corps have the benefit of pass-through taxation. This means only the corporation shareholders have to pay taxes on their share of the corporate income. 

What are the requirements to create an S Corporation? 

To form an S Corp in Wyoming, you first have to form a foundational business, such as a C Corp or LLC. Then you have to file Form 2553 with the IRS. 

Can LLCs choose an S Corporation election?

Absolutely! An LLC can elect to be an S Corp. By choosing to tax your LLC as an S Corporation, you can further reduce your tax liabilities. Learn more about LLCs and tax issues on our Tax Information for Limited Liability Companies page. 

How We Can Help

Maybe you need time to think about starting a new S Corp, or maybe you’re ready to get it done now. If you’re ready to start a new venture, we have your back with our S Corporation Formation Service. Our many services can help you with the formation, maintenance, and compliance needs of your business. Starting a new business can be exhilarating and demanding, but you don’t have to be overwhelmed when you use our business support services. 

Fortunately, we make starting a business easy with our Wyoming LLC Formation Service and our Wyoming Corporation Formation Service, either of which will get the foundation of your Wyoming S Corporation established. After that’s all set up, we offer future business support with our various business development and maintenance services.