The Wyoming Close Corporation, Explained

January 16, 2024 · All articles

A corporation built for a handful of owners

A close corporation is a corporation designed for a small number of shareholders who are usually also the people running it. Wyoming's close corporation statute strips out much of the formality that a conventional corporation carries. That suits a family business or a closely held company that wants the corporate form without the machinery meant for public companies.

What it changes

A Wyoming close corporation can dispense with a board of directors and let the shareholders run the company directly. It can skip regular formal meetings if the shareholders agree. It can also restrict who shares may be transferred to, which keeps ownership inside a known group rather than open to outsiders. The result is a corporation that operates a little more like a partnership in practice while keeping limited liability.

The trade-offs

Fewer formalities can mean less separation between owners and the company if you are not careful. The transfer restrictions that keep outsiders out can also make it harder to bring investors in or to exit. It is a deliberate structure for people who want control and continuity among a small group, not for a company planning to raise outside capital or add many shareholders.

Close corporation or ordinary corporation

If you are a small group who will run the business yourselves and want to limit who can own in, the close corporation removes friction you would otherwise carry. If you expect outside investment or a wider shareholder base, a standard Wyoming corporation is the better fit. We form both and can walk through the difference before you choose.