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Limited Partnerships in Wyoming

by Norris Law Group on August 13, 2014

ltd_partnership_puzzle_150Maybe you’ve started a business in Wyoming. It could be anything: a retail store, car dealership, farm equipment dealership, or real estate investment firm, to name just a few examples. Has one person (perhaps a parent or other primary investor) largely built the business, but brought in others (children, partners) who have a stake in the business now, too? If so, a limited partnership may be a good business decision for you.

The Wyoming Secretary of State explains limited partnerships on pages 7-8 of “The Choice is Yours,” an online publication about the types of companies and corporations recognized by the state. Unlike a partnership, a Wyoming limited partnership must be registered with the Secretary of State. The “general partners” assume all of the liability for the partnership and make major business decisions, while the “limited partners” are not involved in the management of the business and are responsible only for the assets they contribute.

Advantages of Limited Partnerships in Wyoming

  • Limited liability for each partner
  • Partnership “may sue and be sued, own property, and protect its limited partners” as a separate entity
  • May raise capital for the partnership by taking out loans or selling interest
  • Needn’t be dissolved/reformed if a partner dies)
  • May generate capital through loans, partners’ savings, operating funds, and sales
  • General partners have management authority
  • Tax benefits – “profits and losses pass through the entity to the partners;” business is not taxed

Disadvantages of Limited Partnerships in Wyoming

  • Accounting can be complicated
  • Limited life (“usually for the economic life of the assets [the partnership] owns”)
  • Limited partners have no management control
  • Subject to securities laws “if more than 15 partners are involved in Wyoming or if sales commissions are given for selling interests”
  • Investments are not liquid; must be held indefinitely
  • Can be expensive to create and operate (advanced accounting practices are required; must file with the state; must provide annual financial reporting to limited partners)

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County, UT and throughout Utah, Wyoming and Idaho. Contact them today at 801-932-1238 or online for a free consultation.

{ 1 comment… read it below or add one }

Curtis August 15, 2014 at 8:16 pm

Graham, If I set up a company, a Disabled Vet owned company, can I establish it as a LLC in Wyoming with WY address?

I am a disabled vet currently receiving VA Compensation and retired from the Army.

Thanks,
Curtis
801-602-3502

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