Wyoming vs Delaware: Complete Comparison Guide
Which state is right for your LLC or corporation? I compare costs, privacy, asset protection, and investor reputation to help you make the best choice for your business.
🏔️ Wyoming
Best for: Privacy, Asset Protection, LLCs
🏛️ Delaware
Best for: Corporations, VC Funding, Complex Equity
Quick Decision Guide
The choice between Wyoming and Delaware depends primarily on your entity type and business goals:
Choose Wyoming If:
- Entity Type LLC (especially)
- Priority Privacy & Asset Protection
- Business Model Bootstrapped, Real Estate, Consulting
- Funding Plans No VC funding needed
- Cost Sensitivity Want lowest ongoing costs
Wyoming's Strongest Features
Best LLC asset protection in the U.S. — Strongest charging order protection, includes single-member LLCs. No member names disclosed publicly. Annual report only $60.
Choose Delaware If:
- Entity Type C-Corporation or PBC
- Priority VC Funding & Investor Credibility
- Business Model Tech Startup, SaaS, High Growth
- Funding Plans Raising venture capital or going public
- Legal Complexity Need sophisticated corporate law
Delaware's Strongest Features
Best for corporations. — 200+ years of corporate case law, Court of Chancery with specialized judges, standard for VC deals. Flexible stock structures.
⚠️ The "Delaware is Always Better" Myth
Many startup advisors default to Delaware without analyzing your specific situation. For LLCs, Wyoming is objectively superior in privacy, asset protection, and cost. Delaware's advantages only matter for C-Corporations raising institutional capital or planning to go public.
My Recommendation Process
When clients ask me which state to choose, I start with these questions:
- LLC or Corporation? — If LLC, Wyoming wins 90% of the time.
- Are you raising VC money? — If yes, Delaware C-Corp is the standard.
- Is privacy important? — Wyoming doesn't disclose owners; Delaware requires registered agent address.
- What assets need protection? — Wyoming LLC has strongest charging order protection in U.S.
- What's your 5-year plan? — Planning to go public? Delaware. Staying private? Wyoming often better.
💡 You Can Always Convert Later
Many of my clients start as Wyoming LLC, then convert to Delaware C-Corp when they raise their first VC round. This is common and straightforward. Don't over-optimize for a future that may not happen — optimize for your current needs.
LLC: Wyoming vs Delaware Head-to-Head
For LLCs, Wyoming offers superior privacy, asset protection, and lower costs compared to Delaware. Here's the comprehensive breakdown:
| Feature | Wyoming LLC | Delaware LLC | Winner |
|---|---|---|---|
| Formation Cost | $100 filing fee + $60 first year report = $160 | $90 filing fee + $300 franchise tax = $390 | Wyoming |
| Annual Report Fee | $60/year (no franchise tax) | $300/year franchise tax + $50 report fee = $350/year | Wyoming |
| 5-Year Total Cost | $400 (formation + 5 annual reports) | $1,840 (formation + 5 years franchise tax) | Wyoming |
| Owner Privacy | Members/managers NOT disclosed publicly | Members/managers NOT disclosed, but less robust statutes | Wyoming |
| Charging Order Protection | Exclusive remedy for SMLLC & MMLLC (strongest in U.S.) | Strong, but not as explicitly protective as Wyoming | Wyoming |
| Asset Protection Statutes | Wyo. Stat. § 17-29-503: Charging order is exclusive remedy | 6 Del. C. § 18-703: Strong, but case law less developed | Wyoming |
| Veil Piercing Risk | Extremely difficult (must prove fraud, not just undercapitalization) | Similar standard, but fewer pro-business LLC cases | Tie |
| Operating Agreement Flexibility | Extremely flexible, few mandatory provisions | Also very flexible, similar to Wyoming | Tie |
| Court System | Standard state courts | Court of Chancery (specialized, no jury trials) | Delaware |
| VC Acceptability | VCs generally avoid LLCs (Wyoming or otherwise) | VCs generally avoid LLCs (Delaware or otherwise) | N/A |
| Best Use Case | Real estate, consulting, e-commerce, holding companies | Corporations planning to raise VC or go public (not LLCs) | — |
The Bottom Line on LLCs
Wyoming LLC is objectively superior to Delaware LLC for 90% of businesses. You get:
- $1,440 savings over 5 years ($300/year × 5 years - $60/year × 5 years)
- Strongest asset protection statutes in the United States
- Better privacy (Wyoming culture is more privacy-focused)
- No state income tax (same as Delaware)
⚠️ The Only Reason to Choose Delaware LLC
The only legitimate reason to form a Delaware LLC is if you plan to convert to a Delaware C-Corporation within the next 12-24 months for VC funding. In that case, starting as Delaware LLC avoids a later state conversion. But if you're not sure about VC, start as Wyoming LLC and convert later if needed.
Real-World LLC Scenarios
Scenario 1: Real Estate Investor
Profile: Purchasing rental properties, wants liability protection and privacy.
Why Wyoming Wins:
- Strongest charging order protection shields rental properties from personal creditors
- Privacy: landlord disputes can't easily identify other properties you own
- $60/year per LLC vs $350/year = huge savings when you own multiple properties
- No VC funding plans, so Delaware's court system irrelevant
Scenario 2: E-Commerce Business
Profile: Shopify store, $500K/year revenue, bootstrapped, no plans to raise money.
Why Wyoming Wins:
- Privacy: competitors/suppliers can't look up your business details
- Asset protection: shields business assets from personal lawsuits (car accident, divorce)
- Lower cost: $240 annual savings vs Delaware
- E-commerce lawsuits (product liability, IP) benefit from charging order protection
Scenario 3: Holding Company for Investments
Profile: LLC to hold stocks, crypto, or other investment assets.
Why Wyoming Wins:
- Critical: Wyoming charging order protection prevents creditors from seizing investment portfolio
- Privacy: outsiders can't see what assets you hold in the LLC
- Cost savings: $60/year report vs $350/year
- No need for Delaware's Court of Chancery for passive investments
C-Corporation: Wyoming vs Delaware Head-to-Head
For C-Corporations, the analysis is different than LLCs. Delaware's 200+ year history of corporate case law and Court of Chancery make it the preferred choice for venture-backed companies.
| Feature | Wyoming C-Corp | Delaware C-Corp | Winner |
|---|---|---|---|
| Formation Cost | $100 filing fee | $89 filing fee + $50 county recording = ~$140 | Wyoming |
| Annual Franchise Tax | $60/year (flat fee, no minimum) | $450/year minimum (increases with shares/assets) | Wyoming |
| 5-Year Cost Comparison | ~$400 total | ~$2,390+ (can be much higher with more shares) | Wyoming |
| Corporate Case Law | Limited case law on complex corporate issues | 200+ years of precedent, most comprehensive in U.S. | Delaware |
| Court System | Standard state courts (jury trials possible) | Court of Chancery: Specialized judges, no jury, fast decisions | Delaware |
| VC Reputation | Unfamiliar to most VC lawyers | Industry standard: 90%+ of VC-backed companies | Delaware |
| Stock Flexibility | Standard stock classes (common, preferred) | Extremely flexible: multiple voting classes, tracking stock, etc. | Delaware |
| IPO Readiness | Would need to re-incorporate to Delaware before IPO | Already in preferred state (most public companies are Delaware) | Delaware |
| Director Protections | Standard indemnification and exculpation | 102(b)(7) exculpation: Limits director liability (critical for recruiting board) | Delaware |
| Appraisal Rights | Standard statutory appraisal rights | Well-developed case law on valuation disputes | Delaware |
| Officer Privacy | Officers/directors NOT disclosed publicly | Officers/directors NOT disclosed publicly | Tie |
| Best Use Case | Bootstrapped C-Corp with no VC plans, cost-sensitive | VC-backed, planning IPO, complex equity, or need predictable law | — |
The Bottom Line on Corporations
For C-Corporations raising VC or planning to go public: Delaware is the clear winner.
For bootstrapped C-Corps with no VC plans: Wyoming saves money but has trade-offs.
Wyoming C-Corp: Pros
- $390+/year cost savings (5-year savings: ~$2,000)
- Simple flat $60/year fee (no complex franchise tax calculation)
- Same privacy as Delaware (officers not disclosed)
- No state income tax (same as Delaware)
- Easier for small, simple corporations
Wyoming C-Corp: Cons
- VCs will require re-incorporation to Delaware (costs $2,000-5,000)
- Less developed corporate case law (uncertainty in disputes)
- No Court of Chancery (standard courts with juries)
- Directors may be hesitant without Delaware's § 102(b)(7) protections
- Would need to re-incorporate before IPO
💡 The Re-Incorporation Question
Re-incorporating from Wyoming to Delaware costs $2,000-5,000 in legal fees and takes 2-4 weeks. Given the 5-year savings of ~$2,000 with Wyoming, you break even if you re-incorporate after 5 years. If you're confident you'll raise VC within 2-3 years, just start as Delaware. If you're bootstrapping and may never raise VC, Wyoming can save significant money.
Real-World Corporation Scenarios
Scenario 1: Pre-Seed SaaS Startup
Profile: Building MVP, plan to raise Seed round in 12 months.
Why Delaware Wins:
- VCs will require Delaware — just start there
- Avoid $2,000-5,000 re-incorporation cost later
- Easier to grant stock options with familiar Delaware forms
- Court of Chancery provides predictability for equity disputes
Scenario 2: Bootstrapped Consulting Firm
Profile: Small team, electing C-Corp for QSBS benefits, no VC plans.
Why Wyoming Can Work:
- QSBS (Section 1202) works in any state, not just Delaware
- $390/year savings = $1,950 over 5 years (the QSBS holding period)
- Unlikely to need Court of Chancery for simple consulting business
- If you do raise money later, you can re-incorporate (but likely won't)
Scenario 3: Family Business Going Corporate
Profile: 20-year-old family business converting from LLC to C-Corp for estate planning.
Why Wyoming Can Work:
- No VC funding ever planned
- Not going public
- Delaware's case law sophistication not needed for family-owned business
- Significant annual cost savings ($390+/year)
Scenario 4: Tech Startup Already Funded
Profile: Raised $500K friends-and-family, planning institutional Seed in 6 months.
Why Delaware Wins:
- Institutional investors will require Delaware
- Already dealing with complex equity (SAFEs, convertible notes)
- Need predictable law for future liquidation preferences, anti-dilution, etc.
- Court of Chancery critical for potential shareholder disputes
Interactive 5-Year Cost Calculator
Calculate the exact cost difference between Wyoming and Delaware for your specific situation:
Compare Your 5-Year Costs
Privacy Comparison: What's Disclosed Publicly?
Privacy is a key differentiator for many clients. Here's exactly what information becomes public record in each state:
| Information Type | Wyoming | Delaware |
|---|---|---|
| Entity Name | ✅ Public (required) | ✅ Public (required) |
| Formation Date | ✅ Public | ✅ Public |
| Registered Agent Name & Address | ✅ Public (required) | ✅ Public (required) |
| LLC Members/Managers | ❌ NOT public (Wyoming advantage) | ❌ NOT public |
| Corporate Officers/Directors | ❌ NOT public (Wyoming advantage) | ❌ NOT public |
| Shareholders | ❌ NOT public | ❌ NOT public |
| Annual Report | Filed online, shows registered agent only | Annual franchise tax filing (financial info not public) |
| Operating Agreement / Bylaws | ❌ NOT filed (kept private) | ❌ NOT filed (kept private) |
| Business Address | Not required on formation docs (can use RA address) | Not required on formation docs (can use RA address) |
Why Wyoming Provides Better Privacy
While both states offer good privacy (neither discloses owners publicly), Wyoming's privacy advantages come from:
1. Cultural Commitment to Privacy
Wyoming has a long-standing culture of protecting individual privacy. The state explicitly designed its LLC statute to maximize owner anonymity. Delaware is more focused on corporate law sophistication than privacy.
2. Statutory Language
Wyoming Statute § 17-29-210 explicitly states: "The name and address of members need not be set forth in the certificate of organization or in the annual report." Delaware's statute is similar but less emphatic about privacy protection.
3. Practical Reality
Wyoming Secretary of State's office has fewer information requests from the public, fewer FOIA requests, and a more restrictive interpretation of what constitutes "public record." Delaware, as the incorporation capital of the U.S., receives far more scrutiny and information requests.
Privacy Enhancement Techniques (Work in Both States)
I help clients maximize privacy using these legal techniques, which work in both Wyoming and Delaware:
- Use a registered agent service: Your entity's public address is the RA address, not your home or business address. (I include this in my formation packages.)
- Nominee manager for LLCs: Appoint a nominee manager (like a lawyer or professional service) who appears on any public documents instead of you. You remain the member (owner) but don't appear in public records.
- Holding company structure: Use a Wyoming LLC as the owner/member of other LLCs or corporations. The sub-entities may be in other states, but the ultimate owner (you) is hidden behind the Wyoming parent.
- Trust ownership: A revocable living trust can be the member/shareholder of your entity. The trust documents are not public, so your personal name never appears.
⚠️ Privacy ≠ Tax Evasion
Privacy structures are legal and appropriate for asset protection, avoiding frivolous lawsuits, and protecting against identity theft. However, you must still report all income to the IRS and comply with federal/state tax laws. Privacy from the public is different from privacy from the government. I can help you structure legal privacy, but not tax evasion.
Real-World Privacy Scenarios
Scenario: High-Profile Professional
Situation: Doctor, lawyer, or executive who wants to own rental properties without the public knowing.
Privacy Strategy:
- Form Wyoming LLC for each rental property
- Use registered agent address (not your home/office)
- Appoint a nominee manager (I can serve in this role or recommend a service)
- Record deed in LLC name, not your personal name
- Result: Your name appears nowhere in public records
Scenario: E-Commerce Seller
Situation: Successful Amazon/Shopify seller who doesn't want competitors or suppliers discovering revenue levels or other businesses you own.
Privacy Strategy:
- Wyoming LLC for the e-commerce business
- Registered agent address in Wyoming (not your fulfillment center)
- Business bank account in LLC name
- Domain registration with privacy protection
- Result: Competitors searching Wyoming SOS find only your LLC name and RA address—no indication of revenue, owners, or other ventures
Asset Protection: Charging Order Analysis
Wyoming offers the strongest LLC asset protection in the United States. Here's why:
What is Charging Order Protection?
Charging order protection is the primary asset protection feature of an LLC. When you're sued personally (car accident, personal guarantee default, divorce), the creditor cannot seize your LLC membership interest or force the LLC to distribute assets to them. Instead, the creditor is limited to a "charging order"—they can only receive distributions if and when the LLC chooses to make them.
How It Works
Imagine you own a $500K rental property inside an LLC, and you're personally sued for $200K from an unrelated car accident. Without charging order protection: Creditor can force sale of the property to pay your debt. With charging order protection: Creditor gets a charging order against your membership interest, but cannot force distributions or sell the property. You continue operating the LLC, and the creditor waits indefinitely.
| Feature | Wyoming | Delaware |
|---|---|---|
| Charging Order Statute | Wyo. Stat. § 17-29-503: Charging order is "exclusive remedy" | 6 Del. C. § 18-703: Charging order available, but less explicit |
| Single-Member LLC Protected? | ✅ YES — explicitly protected by statute (2015 amendment) | ⚠️ Not explicitly stated; case law less developed |
| Can Creditor Force Sale? | ❌ NO — charging order is exclusive remedy | ⚠️ Possibly in extreme cases (less protective case law) |
| Can Creditor Foreclose? | ❌ NO — statute explicitly prohibits | ⚠️ Not explicitly prohibited; depends on case law |
| Multi-Member LLC Protected? | ✅ YES — charging order exclusive remedy | ✅ YES — generally strong protection |
| Reverse Veil Piercing Risk | Very low — courts extremely reluctant | Low — but slightly more case law allowing it |
| Creditor Gets Voting Rights? | ❌ NO — creditor has no management rights | ❌ NO — creditor has no management rights |
| Creditor Gets Financial Info? | ⚠️ Limited — depends on operating agreement and court | ⚠️ Limited — depends on operating agreement and court |
| Best For | Maximum asset protection for LLCs (especially SMLLCs) | Good protection, but not as robust as Wyoming |
The Single-Member LLC Distinction
This is where Wyoming truly shines. Many states (including Florida, Colorado, California) have case law suggesting that single-member LLCs (SMLLCs) do NOT receive charging order protection—creditors can seize the membership interest outright.
Wyoming's 2015 Fix
In 2015, Wyoming amended its LLC statute to explicitly state that charging order protection applies equally to single-member and multi-member LLCs. Wyo. Stat. § 17-29-503(f): "This section applies to a judgment debtor's transferable interest in a limited liability company, whether or not the judgment debtor is the sole member."
Delaware's statute does not have this explicit protection. While Delaware courts have not (to my knowledge) forced sale of SMLLC interests, the lack of statutory clarity is a risk.
⚠️ When Asset Protection Doesn't Apply
Charging order protection shields your LLC interest from personal creditors. It does NOT protect against:
- LLC creditors: If the LLC itself is sued (slip-and-fall at rental property, business debt), creditors can reach LLC assets directly.
- Fraudulent transfer: If you transfer assets to the LLC to avoid a known creditor, courts can reverse the transfer.
- Veil piercing: If you commingle personal and business funds, don't follow formalities, or use the LLC to commit fraud, courts can ignore the LLC structure.
- IRS: IRS can reach through LLCs to collect personal tax debts in many cases.
Corporations: Limited Asset Protection
Corporations (C-Corp, S-Corp) do NOT have charging order protection. If you're personally sued and own corporate stock, creditors can generally seize and sell your shares to satisfy the judgment. This is a major reason why LLCs are preferred for asset protection planning.
Holding Company Strategy
If you need a C-Corporation (for VC funding, QSBS, etc.) but want asset protection, consider this structure:
- Form Wyoming LLC (owned by you personally)
- LLC owns 100% of Delaware C-Corporation stock
- Your personal creditors face charging order protection to get to the LLC
- The C-Corp operates the business normally
This adds complexity and cost, but can be worth it for high-risk individuals (doctors, real estate investors, etc.) who need both C-Corp structure and asset protection.
Use Cases: Who Should Choose Which State?
Based on my experience helping hundreds of clients, here are the most common scenarios and my recommendations:
✅ Wyoming is Best For:
1. Real Estate Investors (Rental Properties)
Why Wyoming:
- Strongest charging order protection shields properties from personal lawsuits
- Privacy: tenants/others can't easily find your other properties
- Cost: $60/year vs $350/year = $290 savings per LLC (and you'll own multiple)
- No state income tax (same as Delaware)
2. E-Commerce / Shopify / Amazon FBA
Why Wyoming:
- Privacy: competitors can't research your business structure
- Asset protection: shields business from personal creditors
- Cost savings: $240/year less than Delaware
- LLCs are standard for e-commerce (not corporations)
3. Consultants / Freelancers / Agencies
Why Wyoming:
- Simple, low-cost structure
- Asset protection for personal assets outside the business
- Privacy: clients/competitors can't see your business details
- Can elect S-Corp tax status if profitable (works in any state)
4. Holding Companies (Investments, Crypto, Stocks)
Why Wyoming:
- Critical: Charging order protection prevents creditors from seizing investment portfolio
- Privacy: outsiders can't see what you own
- Cost savings over time
- No need for Delaware's Court of Chancery for passive holdings
5. Professional Practices (Doctors, Lawyers, CPAs)
Why Wyoming:
- Depends on state licensing rules (some states require in-state PLLC)
- If your state allows out-of-state entities, Wyoming offers privacy and cost savings
- Asset protection for non-practice assets (real estate, investments)
✅ Delaware is Best For:
1. VC-Backed Startups (Pre-Seed through Series A+)
Why Delaware:
- VCs require Delaware C-Corp (non-negotiable in 95% of cases)
- 200+ years of corporate case law provides predictability for complex equity
- Court of Chancery resolves shareholder disputes quickly without juries
- Standard stock option plans, board governance docs all designed for Delaware
2. Companies Planning to Go Public (IPO/SPAC)
Why Delaware:
- 90%+ of publicly traded companies are Delaware corporations
- Investment banks expect Delaware (simplifies S-1 preparation)
- Court of Chancery critical for shareholder derivative suits, appraisal rights
- Well-established case law on fiduciary duties, conflicts of interest
3. Complex Multi-Subsidiary Structures
Why Delaware:
- If you're managing holding companies with multiple subs, preferred stock, complex voting arrangements, Delaware's case law provides certainty
- Court of Chancery resolves inter-company disputes efficiently
- Director protections (§ 102(b)(7)) critical for recruiting independent directors
4. Benefit Corporations (Public Benefit Corporations)
Why Delaware:
- Delaware has well-developed PBC statute (since 2013)
- Many impact investors and customers expect Delaware PBC
- Case law on balancing profit vs. public benefit
- Wyoming has PBC statute too, but less developed ecosystem
⚖️ Either Wyoming or Delaware:
Bootstrapped SaaS / Software Company (C-Corp for QSBS)
Analysis:
- QSBS (Section 1202 tax exemption) works in any state, not just Delaware
- If you're confident you won't raise VC, Wyoming saves $400+/year
- If there's a 30%+ chance you'll raise VC in next 2-3 years, just start as Delaware
Let Me Help You Choose
The Wyoming vs. Delaware decision depends on your specific business model, funding plans, privacy needs, and asset protection goals. I can analyze your situation and recommend the optimal state and entity structure.
What I Provide
- Free initial consultation to understand your business and goals
- State and entity recommendation (Wyoming/Delaware, LLC/C-Corp/S-Corp)
- Complete formation services including:
- Articles of Organization/Incorporation filed with state
- Operating Agreement or Bylaws (customized)
- EIN application (federal tax ID)
- Registered agent service (1st year included)
- Stock certificates and ledger (for corporations)
- Asset protection planning (charging order, nominee managers, holding structures)
- Privacy enhancement (trust ownership, nominee structures where appropriate)
- Ongoing annual compliance (annual reports, franchise tax filings)
My Typical Fees
- Wyoming LLC formation: $850 flat fee (includes state fees, RA 1st year, operating agreement, EIN)
- Delaware LLC formation: $950 flat fee
- Wyoming C-Corp formation: $1,200 flat fee
- Delaware C-Corp formation: $1,500 flat fee (includes standard VC-ready docs)
- Re-incorporation: $2,000-3,500 depending on complexity
💡 Why Hire a Lawyer vs. DIY or LegalZoom?
Formation is easy—online services can file the paperwork. The value I provide is strategic advice:
- Choosing the right state (not just defaulting to Delaware)
- Choosing the right entity type (LLC vs C-Corp vs S-Corp)
- Structuring for asset protection (operating agreement provisions matter)
- Tax planning (S-Corp election timing, QSBS compliance)
- Avoiding costly mistakes (forming wrong entity, then needing to convert)
I've saved clients tens of thousands by catching issues early (wrong entity type, missed QSBS qualification, inadequate asset protection structure). Formation is a one-time decision with long-term consequences.
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About Me
Sergei Tokmakov, Esq.
I'm a business formation attorney specializing in Wyoming and Delaware entities. I've helped hundreds of clients choose the right state and structure their businesses for privacy, asset protection, and growth.
Unlike online services that default to Delaware, I analyze your specific situation to recommend the optimal state and entity type. My clients include real estate investors, tech founders, e-commerce sellers, consultants, and high-net-worth individuals seeking asset protection.
Contact: Use the form above or email directly at owner@terms.law