Why A Delaware Corporation or Delaware LLC?
DELAWARE LLC VS. WYOMING LLC
Delaware Corporation or Wyoming Corporation? Delaware Corporation or LLC?
Form a Delaware Corporation or Delaware LLC if you intend to go public with an initial offering. Large companies, traded on an exchange, are best served by Delaware.
On the contrary, a Wyoming corporation or Wyoming LLC is the best option for the small and family-run business.
Unless you're planning to run another Amazon.com, IBM, Microsoft or other large corporation, then you're best option is Wyoming.
Why a Wyoming LLC?
Wyoming LLC Statute 17‑15‑145.
Rights of creditor.
The Wyoming LLC
The Assets Are Made Unattractive To The Creditor
The manager of the Wyoming LLC can refuse to distribute the earnings. (If the operating agreement so allows.) What is the advantage of withholding the distribution from the hostile creditor?
This means that the creditor is now liable for income taxes on those Wyoming LLC earnings, whether or not they’re distributed. The hostile creditor is now liable for taxes on earnings not yet received or for what is typically referred to as “phantom income.” This places the member in a stronger position to negotiate a favorable settlement. Hostile creditors don’t want to pay taxes on earned income that’s out of reach.