Wyoming Took Foreclosure Out of Its Charging Order Section, and Said So in Terms
People assert Wyoming's reputation on creditor protection rather than quote it. So here is the text. Section 17-29-503 of the Wyoming Statutes creates a charging order. It requires the company to pay the creditor any distribution that would otherwise reach the judgment debtor. Subsections (b) and (c) are marked reserved. The uniform act uses those two subsections for a receiver and for foreclosure. Wyoming took both out.
Subsection (g) then states the exclusive remedy. A person seeking to enforce a judgment against a judgment debtor may satisfy it only under this section. That covers any judgment debtor who may be the sole member, dissociated member or transferee. And it covers satisfaction from the transferable interest or from the assets of the company.
It goes on. Other remedies are not available to the judgment creditor and may not be ordered by the court. Those include foreclosure on the judgment debtor's limited liability interest. They also include a court order for directions, accounts and inquiries that the judgment debtor might have made.
That is a stronger statement than the marketing usually manages. It is worth reading precisely because it is what people form here for. None of it is filed. The Secretary of State takes articles of organization and an annual report. It has no channel and no fee for an operating agreement. General patterns are set out in the operating agreement essentials guide. The transactional page for this state is Wyoming operating agreement.
What chapter 17-29 supplies when nobody wrote anything down
Money splits by head, with an unusual exception. Section 17-29-404(a) requires distributions before dissolution in equal shares among members and dissociated members. Three exceptions apply. A written or verbal operating agreement can provide otherwise. A transfer or charging order can require otherwise. Or the company may have represented otherwise in tax filings with the Internal Revenue Service, where no member timely disputes the status elected. A partnership return can therefore displace the statutory split.
Votes split by head too. Section 17-29-407(b)(ii) gives each member equal rights in management, subject to the same tax-filing exception. Subsection (b)(iii) decides ordinary-course matters by a majority of the members.
Anything unusual needs everybody. Section 17-29-407(b)(iv) allows an act outside the ordinary course only with the consent of all members. Subsection (b)(v) allows the operating agreement to be amended only with the consent of all members.
Nobody is paid for working. Section 17-29-407(f) provides that the article does not entitle a member to remuneration for services performed for a member-managed company. Reasonable compensation for winding up is the exception.
The duty of care is a corporate standard. Section 17-29-409(c) sets the duty of care, subject to the business judgment rule. A member must act with the care a person in a like position would reasonably exercise in similar circumstances. The member must also act in a manner the member reasonably believes to be in the best interests of the company. That is a higher default than the gross negligence standard most revised act states use.
One member, named in the statute, and a company that ends in ninety days
Most charging order statutes say nothing about the sole owner. Courts have used that silence to narrow the protection. Wyoming wrote the sole member into the exclusivity clause itself, in section 17-29-503(g). It sits there alongside the dissociated member and the transferee. It is the clearest legislative answer to that question anywhere in this group of states.
There is a countervailing rule that gets much less attention. Section 17-29-701(a)(iii) dissolves the company on the passage of ninety consecutive days during which it has no members. The Wyoming text carries no cure period for admitting a replacement.
For a single-member company that is a ninety-day fuse on the whole entity. The only place to defuse it is a succession clause in the operating agreement. The single-member LLC guide covers federal and banking treatment. The Wyoming single-member LLC page carries the state detail.
Ten Clauses, Written Against Chapter 17-29
Section 17-29-110(a) lists what the operating agreement governs. Wyoming added items the uniform act does not have. Management rights and voting rights of members. Transferability of interests. Distributions before dissolution. And all other aspects of management. Subsection (c) then lists what it cannot do, and three of those entries are reserved.
Wyoming at a glance
| Question | What Wyo. Stat. chapter 17-29 says |
|---|---|
| Governing act | Wyoming Limited Liability Company Act, Wyo. Stat. sections 17-29-101 and following |
| Required by statute? | No. Section 17-29-110 is permissive |
| Form accepted | Written or verbal, and section 17-29-404 refers to both |
| Filed with the state? | Never. No form, no submission, no fee |
| Default voting | Equal rights per member; majority in the ordinary course; unanimity outside it |
| Default distributions | Equal shares, subject to the agreement or the company's IRS filings |
| Charging order | Exclusive. Foreclosure and court-ordered inquiries may not be ordered, section 17-29-503 |
| Veil piercing | Four statutory factors only, and no factor except fraud is sufficient, section 17-29-304 |
| Series | Permitted, with separate records, an agreement provision and notice in the articles, section 17-29-211 |
| State fees you do pay | $100 to form, $60 for the annual report. Nothing for the agreement |
1. Members, percentages, and the transferable interest
List each member with a stated percentage and use the statute's term. A transferable interest is the right to receive distributions and nothing more. Wyoming publishes almost nothing about members. That is part of the appeal. It is also why this schedule is the only record a bank, a lender or a buyer can rely on.
2. Contributions, and the record the defaults ignore
Record the form, date and agreed value of every contribution. Section 17-29-404(a) then splits money in equal shares regardless, unless the agreement says otherwise. So the ledger matters for evidence and for capital accounts rather than for the default. Capture promised contributions and the consequence of a missed call.
3. Management, and where Wyoming lets the articles speak
Section 17-29-407(a) makes a company member-managed unless the articles of organization or the operating agreement expressly provide for managers. Wyoming is one of the few states where the public filing can do that work. Whichever route you use, set the manager's authority, term, compensation and removal. Then define who may sign.
4. Voting, and taming the ordinary-course veto
Tie votes to ownership if that is the intention, since the statute counts heads. Then define what falls outside the ordinary course. Section 17-29-407(b)(iv) hands every member a veto over anything that does, and the phrase is undefined. A schedule of decisions and thresholds removes the argument before it starts.
5. Allocations, distributions and the tax filing that can override them
Displace the equal-shares rule expressly. Separate the allocation of taxable income from the distribution of cash. Then add a mandatory tax distribution. Then note section 17-29-404(a)(iii). A representation made in the company's federal tax filings, undisputed by any member, can itself change the split. Align the return with the agreement rather than discovering they disagree.
6. Transfers, and the interest a creditor can only wait for
Section 17-29-502 already limits what a transferee receives. Add consent requirements, a right of first refusal, and permitted estate transfers. Then add a mandatory purchase on death, divorce, bankruptcy or expulsion. Foreclosure is unavailable, so a charging order can sit against an interest indefinitely. State whether the company may redeem it under section 17-29-503(e), and who decides.
7. Dissociation, admission, and the buyout the act omits
Section 17-29-601 lets a person dissociate at any time. Section 17-29-404(b) confirms that dissociation entitles the person to nothing. The departed member also keeps sharing in equal-shares distributions. Write the buyout: trigger events, valuation method, discounts, installment terms and interest rate.
8. Dissolution, succession, and the ninety-day fuse
Section 17-29-701(a)(iii) dissolves the company after ninety consecutive days with no members, and provides no cure. Section 17-29-701(a)(i) also lets the articles or the agreement state the events that cause dissolution. That is the place to name a successor and a continuation right. The Wyoming dissolution page carries the filing. A lapsed entity works through reinstatement.
9. Tax classification, and the annual report calendar
Record the federal classification and test the allocations against it. An S corporation election cannot carry preferred returns or special allocations. Wyoming levies no personal or corporate income tax, so the federal election does nearly all the work. The recurring state obligation is the annual report and its license tax.
10. Duties, amendments, and the reserved subsection
Set the amendment vote, because section 17-29-407(b)(v) otherwise requires every member. Then read section 17-29-110(c) carefully. The uniform act uses one paragraph there to forbid eliminating the duty of loyalty or care. Wyoming marks that paragraph reserved. The prohibition on eliminating the obligation of good faith and fair dealing remains. Duty modifications therefore have more room here, and should be deliberate. Store the file with the articles and any Wyoming articles of amendment.
Create your Wyoming operating agreement
We draft an operating agreement built around Wyoming law and your ownership split, ready to sign. Or keep reading and draft your own.
What the Wyoming Charging Order Section Actually Says
Subsection (a) of section 17-29-503 lets a court enter a charging order against the transferable interest of a judgment debtor. The company must then pay over any distribution that would otherwise be paid to that debtor. It stops there. The uniform text at this point also declares the order a lien. It goes on to authorize a receiver and a foreclosure. Wyoming's subsections (b) and (c) are marked reserved.
Subsection (d) lets the debtor extinguish the charging order. The debtor satisfies the judgment and files a certified copy of the satisfaction. Subsection (e) lets the company, or one or more members whose interests are not charged, pay the creditor in full. They then succeed to the creditor's rights, including the charging order itself. Subsection (f) preserves exemption laws.
Subsection (g) is the operative sentence, and it does three things at once. It makes the section the exclusive route to the transferable interest and to the assets of the company. It names the sole member, the dissociated member and the transferee. And it states that other remedies are not available to the creditor and may not be ordered by the court. Those include foreclosure and a court order for directions, accounts and inquiries.
Two practical points follow. The subrogation route in subsection (e) is a real tool. The agreement should say who authorizes it and where the funds come from. And a creditor can only wait for distributions, so the distribution clause is the center of gravity. A mandatory annual distribution hands the creditor a payment schedule. A discretionary one does not.
The Four Factors a Wyoming Court May Consider
Wyoming also legislated the veil-piercing question. It did so after its Supreme Court had ruled. GreenHunter Energy, Inc. v. Western Ecosystems Technology, Inc., 2014 WY 144, 337 P.3d 454, upheld piercing the veil of a single-member company. The facts included undercapitalization, no separate accounts and the owner's use of the company as a shell. In 2016 the Legislature repealed subsection (b) of section 17-29-304 and replaced it with a closed list.
Section 17-29-304(c) now directs a court to consider only four factors in imposing liability on a member or manager. No one of them except fraud is enough. They are fraud and inadequate capitalization. Then failure to observe company formalities as required by law. And intermingling of assets, business operations and finances of the company and the members, to such an extent that there is no distinction between them.
Subsection (d) then removes a set of arguments entirely. A court shall not consider factors intrinsic to the character and operation of a limited liability company, whether single or multiple member. The statute names them. The ability to elect disregarded or pass-through tax treatment. Flexible operation or organization, including the failure to observe any particular formality. And the exercise of ownership, influence and governance by a member or manager.
What remains decisive is capitalization and intermingling. Ordinary records answer both. A contribution ledger, a separate bank account, and declared distributions. Then written intercompany agreements where a group of companies shares premises or staff. A current certificate of good standing for each entity is the cheapest evidence that they are being maintained separately.
Five Mistakes Wyoming Owners Keep Making
Two of these come from trusting the reputation instead of the text. Three come from defaults that only surface when somebody leaves or dies.
Mistake 1: Using a uniform act template in a state that edited the uniform act
Wyoming reserved three paragraphs of section 17-29-110(c) and two subsections of section 17-29-503. It also rewrote the duty of care in section 17-29-409(c). A template that reproduces the model text will describe a foreclosure remedy that does not exist here. It will describe a duty of care standard Wyoming replaced. And it will miss the tax-filing exception in section 17-29-404(a)(iii) entirely.
Mistake 2: Assuming the statute does the work for a sole owner
Section 17-29-503(g) names the sole member. That protection assumes a company whose distributions can be charged and whose assets are distinct from the owner. Section 17-29-304(c) still lets a court weigh inadequate capitalization and intermingling. The ledger, the separate account and the signed agreement are what answer those two factors.
Mistake 3: Letting the tax return set the economics
Section 17-29-404(a)(iii) lets a company representation displace the equal-shares default. The representation is made in Internal Revenue Service filings and not timely disputed by any member. A partnership return prepared by an accountant who was never shown the deal can rewrite the split. No member will notice until a distribution is questioned.
Mistake 4: Looking for the filing or the fee
There is neither. You never deliver the operating agreement to the Secretary of State. It appears in no fee schedule and is not part of the formation packet. What Wyoming charges is $100 to form the company and $60 for the annual report. Filing the agreement publicly would also give away the privacy that brought most owners here.
Mistake 5: Leaving the ninety-day dissolution rule unanswered
Section 17-29-701(a)(iii) dissolves the company after ninety consecutive days with no members. The Wyoming text sets out no cure. Say the owner of a single-member holding company dies. The entity has three months before it ends by operation of law, taking its charging order protection with it.
Three Wyoming Companies and the Clause That Decided It
Composite cases built from the patterns that recur under chapter 17-29.
Example 1: A Cheyenne holding company and a creditor with nowhere to go
A member held forty percent of a mineral royalty company. A $480,000 judgment was entered against that member personally. The creditor obtained a charging order, then asked the court for an accounting and for foreclosure. Section 17-29-503(g) says both are unavailable and may not be ordered. The operating agreement made distributions discretionary and the managers declared none. The charging order collected nothing for three years.
Example 2: A Jackson outfitter where the tax return moved the split
Three members ran a guided expedition business. Two contributed $220,000 between them. The third contributed licenses and full-time work. Nobody wrote an agreement. The accountant filed partnership returns allocating profit fifty-thirty-twenty for four years, undisputed by anyone. The working member later argued for equal shares under section 17-29-404(a). The exception in paragraph (iii) pointed at the returns the members had never read.
Example 3: A Casper leasing company that dissolved by silence
A single owner held leasing contracts worth about $340,000 a year. They ran through a Wyoming company with no operating agreement. The owner died in February. Section 17-29-701(a)(iii) dissolved the company ninety days later. Probate had not yet appointed anyone able to admit a new member. The estate spent the rest of the year negotiating with lessees who had already begun treating their contracts as terminated.
The Financial Consequence of Relying on Chapter 17-29
Wyoming imposes no penalty for having no operating agreement. There is no fine and no compliance event attached to it. These are the amounts the defaults move.
The distribution clause that decides a charging order. Wyoming's protection is only as strong as the company's distribution policy. A charging order collects whatever is paid out. Take a company distributing $300,000 a year to a forty percent member. A mandatory distribution clause hands a creditor $120,000 a year against a $480,000 judgment. A discretionary clause hands it nothing.
The equal-shares reallocation. A company pays $250,000 a year to three members who believe the split is fifty-thirty-twenty. That is up to $41,000 a year away from the statutory answer. And section 17-29-404(a)(iii) means the tax return may decide which version wins.
The ninety-day dissolution. For a sole owner this is a total loss risk rather than a percentage. A leasing book worth $340,000 a year in recurring revenue is worth a fraction of that as a wound-up shell. The clause that prevents it is a paragraph naming a successor.
The costs the state does charge. Formation is $100. The annual report carries a license tax with a $60 minimum. So the calendar is light, and nothing prompts a review of the governance file. A certificate of good standing pulled for a closing is often the first look in years. Trading in another state adds foreign qualification and a second calendar.
How File.Business Drafts a Wyoming Operating Agreement
The intake starts with the distribution clause. In Wyoming that is the clause that decides what a charging order is worth. We make distributions discretionary. We write out the subrogation route in section 17-29-503(e) with a decision-maker and a funding source. And we align the agreement with whatever the company intends to report to the Internal Revenue Service.
The second pass is succession, so the ninety-day rule in section 17-29-701(a)(iii) never runs against a single-member company. From there the work covers the ordinary-course veto in section 17-29-407(b)(iv). Then a real buyout to replace the one the act omits. Then series conditions under section 17-29-211 where the structure calls for them. And duty modifications drafted with the reserved paragraph of section 17-29-110(c) in mind.
Delivery includes a member and contribution schedule formatted for a bank's beneficial ownership file. It also includes signature pages and an adopting consent. Adjacent work runs alongside: registered agent coverage, agent changes and trade name filings. The flat fee is $97 and no state fee attaches, because there is no filing.
Template or drafted document
A single-member Wyoming company is the case that most needs a drafted document, not the least. Two provisions matter most to a sole owner. Those are the charging order exclusivity clause and the ninety-day dissolution rule. Both depend on how the company is set up rather than on where it was formed.
The test takes one search. Open the template and look for the word distribution. Does the clause make distributions mandatory or automatic? Then the document has undone the main reason the company is registered in Wyoming. A charging order collects exactly what the company is obliged to pay.
Wyoming Operating Agreement FAQ
Does Wyoming require an LLC operating agreement?
No. Section 17-29-110 sets out what an operating agreement governs and what it may not do. But nothing in chapter 17-29 requires a Wyoming limited liability company to have one. The Secretary of State never asks to see it.
Do I file the operating agreement with the Wyoming Secretary of State?
No. There is no form for it, no filing channel and no fee. It is a private contract among the members. The state fees you do pay are $100 to form the company and $60 for the annual report.
Can a creditor foreclose on a Wyoming membership interest?
No. Subsections (b) and (c) of section 17-29-503 are reserved. Subsection (g) states that other remedies are not available to the judgment creditor and may not be ordered by the court. Those include foreclosure on the judgment debtor's limited liability interest, and a court order for directions, accounts and inquiries.
Does Wyoming charging order protection cover a single-member LLC?
Yes, by name. Section 17-29-503(g) refers to a judgment debtor who may be the sole member, dissociated member or transferee. It makes the section the exclusive route for such a creditor. That is the only way to satisfy a judgment from the transferable interest or from the assets of the company.
How are distributions split in a Wyoming LLC with no operating agreement?
Equally, unless a tax filing says otherwise. Section 17-29-404(a) requires distributions in equal shares among members and dissociated members. Three exceptions apply. A written or verbal operating agreement can provide otherwise. A transfer or charging order can require otherwise. Or the company's Internal Revenue Service filings may represent otherwise, where no member timely disputes the status elected.
What can a Wyoming court consider when asked to pierce the veil?
Four factors only. Section 17-29-304(c) directs a court to consider only fraud, inadequate capitalization, failure to observe company formalities as required by law, and intermingling of assets and finances. No factor except fraud is enough on its own.
What happens to a Wyoming LLC when its only member dies?
It dissolves after ninety days. Section 17-29-701(a)(iii) dissolves the company on the passage of ninety consecutive days during which it has no members. The Wyoming text provides no cure period. That makes a succession clause in the operating agreement the practical answer.
Need a custom Wyoming Operating Agreement?
File.Business drafts Wyoming-specific Operating Agreements at $97 flat: customized for single-member or multi-member structure, ownership percentages, capital contributions, tax election preferences, and management structure. Includes member-signature template and document-vault storage.
Doing this in Wyoming specifically: Wyoming operating agreement covers the state detail. There is no state form and no fee, because the document is never filed.
Every statutory statement above was read in the sources below. Confirm the current text with the agency or the legislature before acting on it.
Disclosure. File.Business is a private filing service, not a government agency and not a law firm. We prepare and submit filings at your direction, and nothing on this page is legal or tax advice. Filing fees, deadlines, and statutory references are current as of the last-updated date shown above and can change. Confirm current requirements with the relevant state agency before you file.
