Wyoming Limited Partnership: How and Why to Form One

Wyoming is known for its business-friendly laws, low taxes, and strong asset protection. While many entrepreneurs turn to the state to form LLCs or Corporations, there’s another flexible option often overlooked: the Wyoming Limited Partnership (LP).

Whether you’re an investor, real estate professional, family office, or asset manager, forming a Wyoming LP might be the right move to manage your holdings or projects. This guide explains what a Wyoming LP is, how it works, how to form one, and why Wyoming is the ideal state to set it up.

What Is a Wyoming Limited Partnership?

A Limited Partnership (LP) is a business structure that consists of at least one general partner and one or more limited partners.

• General Partners manage the business and assume full liability.
• Limited Partners invest capital but have limited liability and no active management role.

This setup makes LPs useful for investment ventures, estate planning, and passive ownership structures.

In Wyoming, LPs enjoy additional benefits such as:

• No state income tax
• Strong charging order protection
• Low annual fees
• Privacy for limited partners

Why Use a Wyoming LP Instead of an LLC?

An LLC is more common, but an LP has distinct advantages in certain scenarios:

• Estate Planning: LPs can be used to transfer wealth to heirs while retaining control as the general partner.
• Investment Funds: LPs are often used in private equity, hedge funds, and real estate syndications.
• Family Business Holdings: The family can be limited partners, while a parent or family trust controls the business as general partner.

In Wyoming, these structures can be combined with a Wyoming LLC as the general partner for even greater protection and anonymity.

Key Features of a Wyoming Limited Partnership

Here’s a breakdown of the primary benefits and protections you can expect:

• Privacy: Limited partner names are not required to be publicly listed.
• Charging Order Protection: Creditors cannot seize ownership, only access distributions (if any).
• Low Fees: Wyoming’s annual report fee is only $60.
• No Franchise Tax or State Income Tax
• Flexible Ownership: Individuals, trusts, or companies can serve as partners.

How to Form a Wyoming Limited Partnership

Starting a Wyoming LP is a straightforward process, but there are legal steps to follow:

1. Choose a Name

The name must be unique in Wyoming and must include Limited Partnership, LP, or L.P.

2. Designate a Wyoming Registered Agent

The LP must have a registered agent with a physical Wyoming address. This can be a commercial agent or your own address, though most choose professional services for privacy.

3. File a Certificate of Limited Partnership

File with the Wyoming Secretary of State and pay the $100 filing fee. This document includes:

• LP name
• Name and address of registered agent
• Name and address of general partners

4. Draft a Limited Partnership Agreement

While not filed with the state, this agreement defines the rights, duties, and ownership interests of each partner. It is crucial for:

• Clarifying control and decision-making
• Handling disputes
• Determining profit distribution
• Protecting the LP in legal matters

5. Get an EIN from the IRS

Even if the LP doesn’t have employees, it needs an Employer Identification Number (EIN) to open bank accounts and file taxes.

6. Open a Business Bank Account

Use your filed certificate, EIN, and partnership agreement to set up a dedicated LP business account.

Using a Wyoming LLC as the General Partner

One powerful asset protection strategy is to create a Wyoming LLC to serve as the general partner of the LP.

This removes personal liability from individuals and offers:

• Additional privacy
• Management centralization
• A shield between general partner duties and personal assets

The LP benefits from the flexibility and anonymity of the LLC while maintaining the investment structure of the partnership.

Common Uses of Wyoming Limited Partnerships

Real Estate Investment

LPs are often used to pool funds for real estate projects, with general partners handling development and limited partners contributing capital.

Family Limited Partnerships (FLPs)

These LPs help families transfer wealth while keeping control centralized. This is commonly used in estate planning to reduce tax burdens and protect family assets.

Venture Capital and Private Equity

Limited partnerships are the standard for raising investment funds and managing pooled capital for startups or acquisitions.

Asset Protection

Used alongside trusts or LLCs, LPs are effective for shielding wealth from lawsuits or claims.

Maintaining a Wyoming LP

To keep your LP active and compliant, you must:

• Maintain a Registered Agent in Wyoming
• File an Annual Report with the Secretary of State ($60 fee)
• Keep Internal Records like meeting notes and updated partnership agreements
• Stay Compliant with IRS Reporting, including K-1s for partners

Conclusion

A Wyoming Limited Partnership is a powerful tool for asset protection, passive investment structures, estate planning, and more. Whether used on its own or combined with a Wyoming LLC, it offers flexible control, low fees, and top-tier legal protections.

Wyoming’s statutes make it one of the best jurisdictions in the country for forming LPs. If you’re looking for a cost-effective, legally sound way to manage risk, raise capital, or safeguard wealth, the Wyoming LP deserves a close look.