Kim Lisa TaylorSecurities Attorney, Founder, Syndication Attorneys, PLLC · Corporate Securities Attorney, 2x Best-Selling Author, Nationwide Speaker | Private Placement

Is Your Single-Member LLC at Risk? Why Delaware Could Cost You Big!

15 Nov 2024 · 1 min

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In this segment, the speaker explains that the choice of state for forming an LLC should align with the LLC’s purpose and member distribution. Delaware is highlighted as a common choice for businesses with members spread across the United States, but it comes with higher costs. Wyoming is presented as a cheaper alternative, especially for single‑member LLCs, because it has no franchise tax and, following a recent law, offers the same liability‑shield protections to single‑member LLCs as multi‑member LLCs, effectively preventing the corporate veil from being pierced.

Chapters

So it really depends on what's the purpose of the LLC. Some people do Delaware. That would be dependent a lot of times if like their members are spread out across, you know, the US. However, they're expensive. So other people use Wyoming because it's a lot cheaper. There's no franchise tax. It is especially beneficial if you are a single member and it's just you. Because a few years ago Wyoming passed a law and they are the only state that provides single-member LLCs with the same protections that multi-member LLCs have when it comes to liability or piercing the corporate veil.