Choosing between a Wyoming, Nevada, or Delaware LLC comes down to three things: cost, privacy, and whether you’ll ever benefit from Delaware’s specialized business court. Wyoming is the cheapest to form and maintain and keeps owner names off public filings. Delaware offers the most predictable legal environment for companies raising outside capital. Nevada sits in the middle on privacy, costs the most, and has lost ground as Wyoming matched its asset protection at a lower price. And if you don’t live in any of these states, forming there often costs more than it saves.
Which State Fits Which Owner
Before the detail, the short version:
- Wyoming wins on cost and privacy for small businesses, holding companies, and solo owners who want low overhead.
- Delaware wins when you’re pitching venture capital or institutional investors, or when you expect complex governance disputes.
- Nevada makes sense if you actually operate in Nevada or have a specific reason to use its courts.
The sections below explain what you’re paying for in each case.
Formation and Annual Costs
The three states are not close on price. Wyoming charges $100 to file articles of organization and $60 per year for most small LLCs (the minimum is $60 or a fraction of the company’s Wyoming-based assets, whichever is greater).1Justia. Wyoming Code 17-29-210 – Fees; Annual Fee That $60 annual obligation is about as low as it gets anywhere in the country.
Delaware charges $90 to form an LLC and requires a flat $300 annual tax on every LLC, regardless of revenue or assets. Miss the June 1 deadline and you owe a $200 penalty plus monthly interest.
Nevada is the most expensive. On top of the articles of organization filing fee and an initial list of managers filing, every LLC pays a $200 annual state business license fee.2Nevada Secretary of State. State Business License – FAQ That’s separate from the annual list renewal, which has its own charge. Keeping a Nevada LLC alive runs several hundred dollars per year before you pay a registered agent.
Every state requires a registered agent with a physical in-state address. If you don’t live in the formation state, a commercial agent service typically runs $49 to $300 per year. Wyoming’s agent must maintain a physical Wyoming street address, no P.O. boxes or virtual offices.3Wyoming Secretary of State. How to Find (or Become) a Registered Agent Delaware and Nevada have the same requirement.
Privacy and What Appears on Public Filings
All three states let you form an LLC without listing owners publicly, but the details matter.
Wyoming provides the strongest privacy by default. The Secretary of State does not require member or manager names on the articles of organization. Only the registered agent and the person filing the paperwork appear in the public record. Wyoming has no state income tax, so there’s no state tax filing creating a paper trail either.
Delaware is similarly tight. The Division of Corporations does not collect member or manager names on the Certificate of Formation or in any annual filings. Only the registered agent’s address appears in the state’s public database. The tradeoff is the $300 annual tax.
Nevada is the weakest of the three. LLCs must file an annual list of managers or managing members with the Secretary of State, which puts manager names and addresses in the public record.4Nevada Legislature. Nevada Revised Statutes Chapter 86 – Limited-Liability Companies Passive members with no management authority are not listed. If you want anonymity as an owner who also runs the company, Nevada offers less cover than Delaware or Wyoming.
Delaware’s Court of Chancery
Delaware’s headline advantage is the Court of Chancery, a dedicated business court that handles disputes without juries.5Delaware Courts. A Short History of the Court of Chancery Its judges, called chancellors, do nothing but decide commercial and corporate disputes. Decades of published opinions have built a body of case law that makes outcomes more predictable than in a general court where a business dispute lands in front of a judge who spent the morning on personal injury claims.
The court is widely recognized as the nation’s leading forum for resolving internal affairs of business entities.6Delaware Courts. Court of Chancery That reputation is why more than half of Fortune 500 companies incorporate in Delaware, and why venture capital firms prefer it. Their attorneys can predict how disputes over equity, governance, and fiduciary duties will play out. The Delaware LLC Act, in Title 6, Chapter 18, gives owners wide latitude to customize operating agreements and override default rules.7Delaware Code Online. Delaware Code Title 6 Chapter 18 – Limited Liability Company Act
This matters most for companies raising outside capital or anticipating complex governance fights. For a single-owner consulting firm or e-commerce business, you’re paying a premium for legal infrastructure you’ll probably never use.
State Income Tax and the Nexus Trap
None of these three states has a personal income tax. That’s a real advantage, but only on income earned within their borders. This is where many business owners get tripped up.
State tax authorities decide whether you owe them money based on whether your business has a connection to their state, which tax law calls nexus. If you live in California and run your business from a home office there, California will tax that income regardless of where your LLC was formed. You’ll also need to register as a foreign LLC in California, pay California’s filing fees, and comply with California’s reporting rules. The formation state’s lack of income tax does nothing for income earned elsewhere.
LLCs are typically treated as pass-through entities for federal tax purposes. The business itself doesn’t pay income tax; profits flow through to the owners’ personal returns.8Internal Revenue Service. Limited Liability Company (LLC) You’ll report your share on your personal federal return and on the return for whatever state you live in. Forming in a no-income-tax state doesn’t change that math.
Nevada’s Commerce Tax
Nevada does impose one business-level tax worth knowing. Any entity with Nevada gross revenue above $4 million in a taxable year owes the Commerce Tax, with rates that vary by industry.9Nevada Legislature. Nevada Revised Statutes Chapter 363C – Commerce Tax Businesses at or below $4 million don’t need to file a return. Most small LLCs will never hit the threshold, but “no income tax” doesn’t mean “no business tax” in Nevada.
Charging Order Protection
All three states provide the strongest version of charging order protection available in the U.S., and this is where they genuinely converge.
A charging order is the only tool a personal creditor of an LLC member can use to reach that member’s interest. The creditor can’t seize LLC assets, force a sale of the business, or take over management. All the creditor gets is the right to receive whatever distributions the LLC chooses to make. If the LLC makes no distributions, the creditor gets nothing, while potentially owing taxes on the member’s allocable share of profits.
The important detail is that all three states make this the exclusive remedy, including for single-member LLCs. Many other states limit exclusive charging order protection to multi-member LLCs, giving creditors more aggressive options against sole owners. Delaware’s statute states that charging orders are the exclusive remedy “whether the limited liability company has 1 member or more than 1 member.”10Justia. Delaware Code Title 6 18-703 – Members Limited Liability Company Interest Subject to Charging Order Nevada uses nearly identical language, barring all other remedies including foreclosure.4Nevada Legislature. Nevada Revised Statutes Chapter 86 – Limited-Liability Companies Wyoming designates charging orders as the exclusive remedy for creditors of a sole member, dissociated member, or transferee.11Justia. Wyoming Statutes 17-29-503 – Charging Order
This protection is most valuable if you’re in a profession with high litigation exposure, such as real estate investing or medicine, and you hold assets inside the LLC. The charging order barrier discourages creditors from pursuing the LLC at all, because the cost of litigation may not be worth the uncertain prospect of ever collecting.
When Forming Out of State Actually Makes Sense
Here’s the question most comparison guides skip: should you actually form in one of these states, or should you form at home?
If your business operates entirely in one state, where you live, where your customers are, where your office is, forming in Delaware, Nevada, or Wyoming usually creates extra cost with no benefit. You’ll need to register as a foreign LLC in your home state anyway. That means filing fees in two states, a registered agent in two states, and annual reports in two states. Foreign qualification fees alone typically run $150 to $250 as a recurring obligation on top of your formation state’s annual costs.
Forming out of state makes practical sense in a few specific situations:
- Raising institutional capital. Venture capital firms and sophisticated investors expect Delaware LLCs or corporations. If you’re pitching investors, Delaware’s legal infrastructure reduces friction in negotiations.
- Multi-state operations. If you do business across many states and need to pick a home jurisdiction, choosing one with strong LLC statutes and predictable courts makes sense. You’ll be registering as a foreign entity in multiple states regardless.
- Asset protection priority. If you specifically need single-member charging order protection and your home state doesn’t offer it, forming in Wyoming or Nevada and holding assets there can add a layer your home state won’t.
- Holding company or investment vehicle. An entity that holds assets but doesn’t transact business in any particular state can sit comfortably in Wyoming at minimal cost.
For a single-location business owned by one or two people, your home state is almost always the right choice. The filing is simpler, the costs are lower, and you avoid maintaining compliance in two jurisdictions. The appeal of Wyoming’s $60 annual fee or Nevada’s privacy provisions evaporates once you add foreign qualification fees, a second registered agent, and a second set of annual reports in the state where you actually work.
The Bottom Line
Wyoming wins on cost and privacy for most small business owners. Formation is $100, annual maintenance starts at $60, no member or manager names appear on public filings, and single-member charging order protection is as strong as anywhere.
Delaware wins for businesses that need credibility with institutional investors or want the predictability of the Court of Chancery. You pay $300 a year for legal infrastructure most small companies will never touch, which is money well spent if you’ll raise outside capital and wasted if you won’t.
Nevada’s advantages have narrowed as Wyoming has matched or exceeded its privacy and asset protection at a fraction of the price. It makes sense when you actually operate in Nevada. Otherwise, it’s the most expensive option with the weakest owner privacy of the three.