Why Form Your LLC in New Mexico?

This is America and you have a choice to form your LLC or corporation in any state. Certain states like Nevada and Delaware do offer specific corporate/LLC law and tax advantages. But most of these advantages are not useful to the very small businesses that are just starting out.

Most experts advise forming the business entity in the state where the business is based. Otherwise, you have to turn around and qualify to do business in that state. That can involve paperwork and costs similar to those of forming in the home state to begin with.^*

That being said, why form the company in New Mexico? For LLCs, the practical advantages of New Mexico include:

• Cost – the basic filing fee is $50 (expedited processing costs and extra $100 or $150, as the normal turnaround time is 10-15 business days).
• Relative ease of formation – there is only a simple filing with Secretary of State (online filing is available for LLCs, but there are traps and drawbacks to this option).
• Privacy or “Anonymity” – the name and address of the member(s) and/or manager(s) are not required, except for online filings. This is the “anonymous” feature of NM LLCs, a benefit that is highly touted but probably exaggerated (anyone who wants to find out the identity of the owner(s) badly enough has other ways of doing so).
• No annual reporting – unlike corporations, NM LLCs do not file periodic reports (and pay fees) with the Secretary of State, as they do in most other states.

If you think forming a New Mexico LLC or corporation is right for you, please visit our website where you can also arrange a brief Q&A conversation with a NM attorney at no charge.

^*There may be exceptions for a pure investment or title holding company, as those activities may not be considered ‘doing business.’ The same goes for online and other interstate commerce businesses – these may not have to qualify if they don’t have a physical presence in the state.