Close Corporations in Wyoming

by Norris Law Group on August 15, 2014

Close Corporations in WyomingMany Wyoming family businesses set up what is known as a “close corporation.” A close corporation is a corporate entity set up for a company with just a few stockholders, and does not require all the regulations that may be affect corporations with more stockholders. While technically a corporation in the eyes of the state, a Wyoming close corporation may be run more like a partnership, but may not have more than 35 shareholders. “The Choice is Yours,” an online publication from the WY Secretary of State’s office, explains close corporations in detail on pp. 12 & 13.

Advantages of a Close Corporation in Wyoming

  • Limited liability – shareholders take on personal liability
  • Easier and less expensive to operate than a C-Corporation (no board of directors, “relaxed corporate governance”)
  • “Deadlock prevention:” deadlocked decisions may be resolved in court to avoid harm to the close corporation
  • Shareholders may buy out a deceased shareholder’s interest (per any existing shareholder agreements).

Disadvantages of a Close Corporation in Wyoming

  • Limited ability to transfer ownership transfer
  • Limit of 35 shareholders may also limit access to capital
  • May be expensive and complicated to set up
  • Must make yearly filings, like any other WY corporation
  • Subject to double taxation unless the close corporation qualifies as an “S” corporation with the IRS.

Do you think a Wyoming close corporation may be right for your? Speak with an attorney experienced in Wyoming business law and setting up Wyoming corporations.

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.

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