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Are you considering starting a professional corporation in Wyoming? Congratulations! Establishing a professional corporation is an excellent choice for entrepreneurs and professionals alike who seek to benefit from a business structure that provides limited liability protection, tax advantages, and enhanced credibility. However,navigating the process of forming a professional corporation in Wyoming can be daunting.
This article aims to provide a comprehensive guide on how toform a professional corporation in Wyoming, covering everything from understanding the basics of this business entity to the essential steps and requirements you must comply with to launch your new venture successfully. Let’s dive in and explore the ins and outs of forming a professional corporation in Wyoming!
What is a Professional Corporation in Wyoming?
A professional service corporation (PSC), sometimes called a professional corporation (abbreviated as PC), is a type of organization authorized by state law to allow owners of particularly licensed professions in Wyoming. The owner of a professional corporation is responsible for their own negligence or misconduct,but they are not held personally accountable for the actions of other owners. PC or P.C. is a regularly used abbreviation to identify professional corporations.
PCs and LLCs provide personal asset protection; that is, the personal assets are free from business debts. However, they do not have similar tax benefits. There is no secret formula as to which type of business structure is better than the other. It solely depends on the requirements of your business. However,forming an LLCis easier than setting up a PC in Wyoming.
Unlike other types of corporations, owners of Professional Corporations get two types of citizenship. One is where they incorporated the corporation, and the other is where they conduct the business. This benefit is not available for other types of corporations. You can form afree LLC in Wyomingif you hire a professional service that provides LLC formation at $0.
How to Form a Professional Corporation in Wyoming
To form a Professional Corporation for the professional service you provide, you must follow a few steps that include verifying if you are qualified for a PC, naming your business, hiring a Registered Agent, filing the Articles of Incorporation, outlining an operating agreement, requesting for an EIN, opening a bank account,getting a business license, and filing for an annual report and taxes.
Step 1: Verify If You Are Qualified for a Professional Corporation
In forming a professional corporation in Wyoming, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-
Doctors
Architects
Engineers
Accountants
Lawyers and others
You should be qualified to have a license to provide your service. In most cases, once you have graduated with your studies, passed the exam, and got your license, you may now form a professional corporation. However, if you work in an industry that doesn’t offer a license or professional certification,you should consider forming a corporation orlimited liability company.
Step 2: Name your Professional Corporation in Wyoming
After you have decided on the idea to form a professional corporation in Wyoming, deciding the name for your corporation is significant. There is a complete guide onWyoming LLC name guidelinesfor you to have a proper business name. Here are some regulations you must follow while naming your professional corporation.
The business name should have the word PC, frequently followed by the name of the principal owner in place of Inc or LLC. (Example. John Doe, MD, PC)
No confusion with a government entity name.
A unique name is needed with no match
Limit of restricted words that need a license.
In Wyoming, if you do not wish to file your professional corporation right away but want to hold the name that you have decided on, then you can reserve your corporation name for 120 days. To keep the name, you must file a name reservation application withWyoming Secretary of State.
A professional corporation, professional association, service corporation, or professional service corporation must be present in the name if it doesn’t already. You might opt to register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for aDBA (doing business as). In this manner, you can choose any name you desire to run a clinic or law firm.
Step 3: Choose the Wyoming Registered Agent
The next step in forming a professional corporation is hiring theWyoming Registered Agent, a person that accepts legal paperwork on behalf of your business. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Wyoming. Forming a professional corporation for your service will be easier if you have Registered Agent in Wyoming.
Alternatively, you can serve as your own Wyoming Registered Agent if you have the time. However, you must stay compliant to avoid missing any important documents from Wyoming.
Step 4: File the Articles of Incorporation in Wyoming
After you hire a Wyoming Registered Agent to form a professional corporation, the next step is to file theWyoming Articles of Incorporation. In writing the Articles of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information should be written. You should also include the names of all co-owners. All owners have to prove they have the proper license to practice the specific profession they intend to.
Filing the Articles of Incorporation in Wyoming may be done with one method that is by mail. The Articles of Incorporation fee may vary from different states. However, in Wyoming, it costs $100 by mail filing. there’s no online filing available.. For offline filing, Send the form by mail to Wyoming Secretary of State, 2020 Carey Avenue,Suite 700, Cheyenne, WY 82002.
Step 5: Write an Operating Agreement in Wyoming
Anoperating agreementis a document that contains all of your company’s organizational details. It is not required to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. TheWyoming operating agreementincludes information like-
About Business
Members and management
Capital contribution
Profit Distribution
Change of membership
Dissolution
Step 6: Designate the PC Board of Directors in Wyoming
The next step is to appoint the initial board of directors in your PC in Wyoming. All the initial directors must submit their details to the owner. The owner must keep the records and submit them in accordance with the Wyoming SOS. When writing the By-laws, as a shareholder and owner,you must make sure there is a point mentioned about appointing a new director later.
Step 7: Write the Corporate Bylaws
Now that you are done forming the team of the board of directors, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.
In creating corporate bylaws, you should include the following on how the decisions will be made.
The responsibilities are given to each officer.
How will judgments in business be made?
Where and when are the annual shareholder meetings?
The minimum number of shareholders required for decision-making.
Location and timing of dividend payments.
Step 8: Hold the First Board of Directors’ Meeting
After drafting the corporate bylaws, gather all the board of directors for the first meeting. This meeting will be finalized by appointing directors to manage the company’s daily operations, approve the bylaws, choose the corporation’s accounting year,and approve the stock issue. All board meetings should have minutes taken and stored with the company’s records.
Step 9: Request an EIN in Wyoming
After documenting the operating agreement, you should get or request anEmployer Identification Number (EIN). An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.
The application of an EIN in Wyoming can be through the following:
Apply Online-Theonline EINapplication is the preferred method for customers to apply for and obtain an EIN.
Apply by Fax-Taxpayers can fax the completedForm SS-4application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
Apply by Mail-The EIN applicationForm SS-4can be filed via mail. The processing time frame to receive the mail is 4 weeks.
Apply by Telephone-International Applicants– International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.
After you have your EIN number, you can benefit in a number of ways. It will give your professional corporation the final advantage necessary to operate at full capacity without encountering legal or judicial issues.
Step 10: Open a Bank Account and Prepare for Taxes
Once you have filed and received your Employer Identification Number, you should open a bank account since you will use this account for yourself, your clients, and your employees.
Your business dealings in Wyoming might be simpler by having a US business bank account because it boosts your company’s legitimacy and liquidity. For firms other than sole proprietorships, most banks demand an EIN to create a business bank account. Also,keeping separate finances helps you avoid combining personal and professional finances. Also, having an EIN makes tax preparation easier. With a professional corporation, you can anticipate paying employment and corporate taxes.
Step 11: Get a Business License in Wyoming
Before your professional corporation operates in Wyoming, you need to have a business license first. A business license is a formal document issued by the state government agency that allows you to operate your business in the geographic region that that agency governs. In Wyoming,business license and permit costs depend on the business’s nature and type. You must check with the local authorities if any special licenses or city-based permits are needed.
Step 12: File Your Taxes in Wyoming
Finally, you are down to the last step. After getting a business license and being ready to operate, do not forget to file your taxes first. You should start paying taxes quarterly as soon as possible to avoid a large tax bill. Each state has different tax requirements. Go through theWyoming classification of taxesfor the taxes an LLC in Wyoming has to pay.
Important Information
Maintaining Professional and Business License in Wyoming
Now that you have established your professional corporation, you must maintain or renew your professional license every now and then. Even if your business is established but you don’t have a valid license to operate, your business is irrelevant. And, even if your professional license is still valid for a year or two,but your business license is already expired, it is still irrelevant.
Make time to check the status of your licenses at least once per year. Then, you can keep from missing anything significant. If there are any issues, you can address them.
Filing an Annual Report in Wyoming
In Wyoming, you will be required to submit a report each year. The owners’ and Registered Agent’s names and contact details are listed in the annual report. Also, it should include all of your yearly financial activity. You must submit one yearly in Wyoming,and you can do it yourself or hire someone else to handle it. Everything must be precise and up to date.
Advantages of Forming a Professional Corporation in Wyoming
A professional corporation takes a lot of time to process and pursue. However, with the help of the Wyoming Registered Agent, everything will become easier. In fact, there are advantages that will help you form a professional corporation in Wyoming.
Limited Liability: The biggest advantage of setting up a professional corporation is that the owners are not held personally responsible for the debts and obligations of the company. This indicates that only the company’s assets will be confiscated to settle claims and creditors if the business is sued or declares bankruptcy. Additionally, this protection exempts corporate owners from being held accountable for other owners’ reckless or criminally negligent acts.
Tax Deductions: Similar company expenses, such as employee fringe benefits, startup and operating costs, and equipment purchases, can be written off by professional companies in the same ways they can be for other kinds of firms. However, there are several tax deductions professional corporations can take advantage of that other types of businesses can’t. For example,the salaries and bonuses paid to owners and employees are tax-deductible.
Retained Earnings: Professional corporations can keep a portion of their profits under the corporate tax system to grow their companies.
FAQs
What are the advantages of forming a Professional Corporation in Wyoming?
Wyoming offers several advantages for forming a Professional Corporation, such as no corporate income tax, no personal income tax, no franchise tax, and the ability to file annually or biennially.
What are the requirements to form a Professional Corporation in Wyoming?
To form a Professional Corporation in Wyoming, you must submit Articles of Incorporation to the Wyoming Secretary of State and pay the filing fee. The Professional Corporation must also have at least one shareholder, one director, and one registered agent in Wyoming.
What are the fees associated with forming a Professional Corporation in Wyoming?
The filing fee for forming a Professional Corporation in Wyoming is $100.
What documents are required to form a Professional Corporation in Wyoming?
To form a Professional Corporation in Wyoming, you must submit Articles of Incorporation to the Wyoming Secretary of State.
What is the process for forming a Professional Corporation in Wyoming?
The process for forming a Professional Corporation in Wyoming begins with submitting Articles of Incorporation to the Wyoming Secretary of State and paying the filing fee. After filing the Articles of Incorporation, the Professional Corporation must then obtain a Certificate of Good Standing and a Registered Agent.
What is the timeline for forming a Professional Corporation in Wyoming?
The timeline for forming a Professional Corporation in Wyoming is typically between 1-2 weeks.
Are there any other requirements for forming a Professional Corporation in Wyoming?
Yes, the Professional Corporation must have at least one shareholder, one director, and one registered agent in Wyoming.
Is there a minimum capital requirement for forming a Professional Corporation in Wyoming?
No, there is no minimum capital requirement for forming a Professional Corporation in Wyoming.
Are there any restrictions on foreign ownership of a Professional Corporation in Wyoming?
No, there are no restrictions on foreign ownership of a Professional Corporation in Wyoming.
What is a Registered Agent in Wyoming?
A Registered Agent in Wyoming is an individual or entity that is designated to receive legal notices on behalf of the Professional Corporation.
How do I select a Registered Agent in Wyoming?
You can select a Registered Agent in Wyoming by submitting an application to the Wyoming Secretary of State.
What are the benefits of having a Registered Agent in Wyoming?
Having a Registered Agent in Wyoming provides the Professional Corporation with a reliable point of contact for receiving legal notices and other important documents.
What is the annual filing requirement for a Professional Corporation in Wyoming?
The Professional Corporation must file an annual report with the Wyoming Secretary of State.
What is the annual fee for a Professional Corporation in Wyoming?
There is a $50 annual fee for a Professional Corporation in Wyoming.
What is the penalty for not filing an annual report for a Professional Corporation in Wyoming?
The penalty for not filing an annual report for a Professional Corporation in Wyoming is a fine of up to $500.
What are the reporting requirements for a Professional Corporation in Wyoming?
The Professional Corporation must file an annual report with the Wyoming Secretary of State, as well as any other required reports.
Is there a corporate income tax in Wyoming?
No, there is no corporate income tax in Wyoming.
Is there a personal income tax in Wyoming?
No, there is no personal income tax in Wyoming.
Is there a franchise tax in Wyoming?
No, there is no franchise tax in Wyoming.
Can a Professional Corporation in Wyoming file biennially instead of annually?
Yes, a Professional Corporation in Wyoming can file biennially instead of annually.
Is there a minimum number of shareholders required for a Professional Corporation in Wyoming?
Yes, a Professional Corporation in Wyoming must have at least one shareholder.
Is there a minimum number of directors required for a Professional Corporation in Wyoming?
Yes, a Professional Corporation in Wyoming must have at least one director.
Are there any other taxes or fees associated with a Professional Corporation in Wyoming?
No, there are no other taxes or fees associated with a Professional Corporation in Wyoming.
Are there any other corporate formalities that must be followed for a Professional Corporation in Wyoming?
Yes, a Professional Corporation in Wyoming must comply with all applicable laws and regulations.
Can a Professional Corporation in Wyoming issue stock?
Yes, a Professional Corporation in Wyoming can issue stock.
Can a Professional Corporation in Wyoming issue bonds?
Yes, a Professional Corporation in Wyoming can issue bonds.
Can a Professional Corporation in Wyoming issue options?
Yes, a Professional Corporation in Wyoming can issue options.
Can a Professional Corporation in Wyoming issue warrants?
Yes, a Professional Corporation in Wyoming can issue warrants.
How do I dissolve a Professional Corporation in Wyoming?
To dissolve a Professional Corporation in Wyoming, you must submit Articles of Dissolution to the Wyoming Secretary of State and pay the filing fee.
What are the requirements to form a professional corporation in Wyoming?
The requirements for forming a professional corporation in Wyoming include having a minimum of one shareholder, filing Articles of Incorporation with the Wyoming Secretary of State, appointing a registered agent, and obtaining a Certificate of Authority from the Wyoming Secretary of State.
What are the advantages of forming a professional corporation in Wyoming?
Answer:The advantages of forming a professional corporation in Wyoming include the protection of personal assets from business liabilities, tax advantages, and the ability to raise capital by selling corporate shares.
Are there any restrictions on ownership of a professional corporation in Wyoming?
Yes, there are restrictions on ownership of a professional corporation in Wyoming. Shareholders must be licensed in the profession or occupation, and the corporation must be owned solely by shareholders who are licensed in the profession or occupation.
What are the filing fees associated with forming a professional corporation in Wyoming?
The filing fee for forming a professional corporation in Wyoming is $100.
Why Wyoming Professional Corporation is So Important
One of the main reasons why a professional corporation is so important is that it offers protection for the personal assets of the professionals involved. In the event that the corporation incurs debt or faces a lawsuit,the personal assets of the shareholders are protected from being seized to satisfy obligations. This is crucial for professionals who have worked hard to build up their personal wealth and do not want to risk losing it due to business liabilities.
Additionally, forming a professional corporation in Wyoming offers professionals the opportunity to minimize their tax liabilities. By operating as a corporation,professionals can take advantage of various tax deductions and incentives that are not available to individuals. This can result in significant savings over time and allow professionals to reinvest more of their profits back into their businesses.
Furthermore, forming a professional corporation in Wyoming can also help professionals attract and retain top talent. By operating as a corporation, professionals can offer employees benefits such as retirement plans, health insurance,and stock options. This can help professionals compete with larger companies for the best employees and ensure that they have a skilled and motivated workforce to support their business growth.
In addition to these practical benefits,forming a professional corporation in Wyoming also provides professionals with a sense of legitimacy and professionalism. Operating as a corporation signals to clients and stakeholders that the professionals take their business seriously and are committed to following the highest standards of conduct and professionalism. This can help professionals build trust and credibility in the marketplace and attract more clients and opportunities for growth.
Overall, the ability to form a professional corporation in Wyoming is essential for professionals who want to protect their personal assets, minimize tax liabilities, attract top talent,and build a professional business reputation. The Professional Corporation Act in Wyoming offers professionals a unique opportunity to create a legal entity that provides all of these benefits and more. Professionals who are serious about protecting their business and securing their financial future would be wise to consider forming a professionalcorporation in Wyoming.
Conclusion
In forming a professional corporation in Wyoming, having someone to help you build it is not necessary but suggestible. Even though it is easy because of the listed benefits and advantages above,forming your group of professional individuals will make it somehow successful. Just make sure to be guided by the steps and ensure that every one of the details and records is accurate and precise. And if you have any questions, share them in the comment section below.