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.
Best for: Privacy, Asset Protection, LLCs
Best for: Corporations, VC Funding, Complex Equity
The choice between Wyoming and Delaware depends primarily on your entity type and business goals:
Best LLC asset protection in the U.S. β Strongest charging order protection, includes single-member LLCs. No member names disclosed publicly. Annual report only $60.
Best for corporations. β 200+ years of corporate case law, Court of Chancery with specialized judges, standard for VC deals. Flexible stock structures.
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.
When clients ask me which state to choose, I start with these questions:
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 β optimize for your current needs.
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. Β§ 17-29-503: Charging order is exclusive remedy | 6 Del. C. Β§ 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) | β |
Wyoming LLC is objectively superior to Delaware LLC for 90% of businesses. You get:
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.
Profile: Purchasing rental properties, wants liability protection and privacy.
Why Wyoming Wins:
Profile: Shopify store, $500K/year revenue, bootstrapped, no plans to raise money.
Why Wyoming Wins:
Profile: LLC to hold stocks, crypto, or other investment assets.
Why Wyoming Wins:
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 | β |
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.
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.
Profile: Building MVP, plan to raise Seed round in 12 months.
Why Delaware Wins:
Profile: Small team, electing C-Corp for QSBS benefits, no VC plans.
Why Wyoming Can Work:
Profile: 20-year-old family business converting from LLC to C-Corp for estate planning.
Why Wyoming Can Work:
Profile: Raised $500K friends-and-family, planning institutional Seed in 6 months.
Why Delaware Wins:
Calculate the exact cost difference between Wyoming and Delaware for your specific situation:
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 | β Public (required) | β Public (required) |
| Formation Date | β Public | β Public |
| Registered Agent Name & Address | β Public (required) | β Public (required) |
| LLC Members/Managers | β NOT public (Wyoming advantage) | β NOT public |
| Corporate Officers/Directors | β NOT public (Wyoming advantage) | β NOT public |
| Shareholders | β NOT public | β NOT public |
| Annual Report | Filed online, shows registered agent only | Annual franchise tax filing (financial info not public) |
| Operating Agreement / Bylaws | β NOT filed (kept private) | β NOT filed (kept private) |
| Business Address | Not required on formation docs (can use RA address) | Not required on formation docs (can use RA address) |
While both states offer good privacy (neither discloses owners publicly), Wyoming's privacy advantages come from:
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.
Wyoming Statute Β§ 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.
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.
I help clients maximize privacy using these legal techniques, which work in both Wyoming and Delaware:
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.
Situation: Doctor, lawyer, or executive who wants to own rental properties without the public knowing.
Privacy Strategy:
Situation: Successful Amazon/Shopify seller who doesn't want competitors or suppliers discovering revenue levels or other businesses you own.
Privacy Strategy:
Wyoming offers the strongest LLC asset protection in the United States. Here's why:
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"βthey can only receive distributions if and when the LLC chooses to make them.
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. Β§ 17-29-503: Charging order is "exclusive remedy" | 6 Del. C. Β§ 18-703: Charging order available, but less explicit |
| Single-Member LLC Protected? | β YES β explicitly protected by statute (2015 amendment) | β οΈ Not explicitly stated; case law less developed |
| Can Creditor Force Sale? | β NO β charging order is exclusive remedy | β οΈ Possibly in extreme cases (less protective case law) |
| Can Creditor Foreclose? | β NO β statute explicitly prohibits | β οΈ Not explicitly prohibited; depends on case law |
| Multi-Member LLC Protected? | β YES β charging order exclusive remedy | β YES β generally strong protection |
| Reverse Veil Piercing Risk | Very low β courts extremely reluctant | Low β but slightly more case law allowing it |
| Creditor Gets Voting Rights? | β NO β creditor has no management rights | β NO β creditor has no management rights |
| Creditor Gets Financial Info? | β οΈ Limited β depends on operating agreement and court | β οΈ Limited β depends on operating agreement and court |
| Best For | Maximum asset protection for LLCs (especially SMLLCs) | Good protection, but not as robust as Wyoming |
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 protectionβcreditors can seize the membership interest outright.
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. Β§ 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.
Charging order protection shields your LLC interest from personal creditors. It does NOT protect against:
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.
If you need a C-Corporation (for VC funding, QSBS, etc.) but want asset protection, consider this structure:
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.
Based on my experience helping hundreds of clients, here are the most common scenarios and my recommendations:
Why Wyoming:
Why Wyoming:
Why Wyoming:
Why Wyoming:
Why Wyoming:
Why Delaware:
Why Delaware:
Why Delaware:
Why Delaware:
Analysis:
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.
Formation is easyβonline services can file the paperwork. The value I provide is strategic advice:
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.
Fill out this intake form and I'll email you within 24 hours with my recommendation and a quote:
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