Have you ever considered starting an LLC in New Mexico? What’s so special about this location? Did you know that most people who decide to form an LLC in this state don’t actually live there?
Still, New Mexico remains one of the most popular locations among investors, business owners, and e-commerce companies. This state doesn’t require you to pay annual fees or submit annual reports, and best of all, it keeps your assets private. However, you are required to have a registered agent. These are only a couple of advantages worth exploring, but there is more.
Let’s see what New Mexico can offer to its potential business investors!
Business registration is done online
This state now permits online LLC filings, which means you can file your LLC on the same day and receive it back within three business days. Small efforts like these ensure a friendly atmosphere and commitment to helping people develop their businesses here.
The best state for LLC privacy
Privacy is one of the main reasons why people form LLCs in New Mexico. Their Secretary of State won’t ask for names of managers or members, which means you can exclude them from the Articles of Organization. The only names you have to list are the registered agent and the organizer, as they act as contact between the LLC and the state.
Anonymity is a big deal, especially when dealing with creditors or if you have needy family members or noisy neighbors. Your information is kept private while forming an anonymous LLC becomes a piece of cake.
You can do business out of the state
Even though you may not live in New Mexico, that shouldn’t stop you from forming an LLC in this state. The regulations in New Mexico allow you to do business from your home state without imposing additional filing requirements.
Some people may even consider opening a shop at home. However, make sure to check with your home state to see what local rules for incorporation might be. While New Mexico permits the out-of-state sale, your home state might require an additional set of papers to be filed.
Also, don’t forget that you are required to have a registered agent in New Mexico if you are doing business out of state.
Your assets are highly protected in New Mexico
Out of all states in the US, New Mexico has one of the strongest asset protection regulations for LLCs. Once you set up a management and divide members’ responsibilities, asset protection is enforced to the letter. This means that your personal assets are protected against the actions of other members.
No annual fees
New Mexico has reasonable prices. You are required to pay a one-time filing fee but no annual fees afterward. Also, there are no additional business licenses for non-residents. Even most people who live here don’t need a license unless they are working in a protected industry, like being an electrician. If you want to dissolve your company or change the name, you are obliged to pay a fee.
No annual report
The annual report contains all the activities the company has performed throughout a fiscal year. In fact, they help the state figure out how the LLC is going. This is also one of the ways to update the state with information about addresses, names, and managing members.
In some states, you need to submit the annual reports by a predetermined date, while most states require an annual report. However, if you form an LLC in New Mexico, you aren’t required to submit an annual report.
Minimal filing fees
Once an organizer or a person responsible for forming an LLC submits the Articles of Organization, they then proceed to pay the filing fees. These fees largely vary from one state to another and can be very competitive.
While some states impose higher costs, others are more welcoming and have minimal fees. Considering filing fees mostly depend on a state, they can be between $100 and $500. Since New Mexico encourages potential business owners to come here, they only charge $50. In fact, with a filing fee of $50, this state has one of the lowest filing fees, aside from Kentucky and Arkansas.
You don’t need to start a business immediately
You can push the starting date by 90 days if that’s something that benefits your current situation.
Why form an anonymous LLC in New Mexico?
New Mexico is the only state that allows business owners to form an LLC without disclosing their members’ names to the government. Therefore, this is the option that provides legal entities the most privacy. But let’s see what other benefits of anonymity you can explore:
- Keeping things confidential – by starting an anonymous LLC, you are keeping your financial status and properties out of the public eye.
- Protecting privacy – this is a great way to keep your address and name out of the internet.
- Prevent harassment – since your address and name are anonymous, you can avoid being harassed by competitors, random salespeople, or anyone interested in your property.
- Lawsuit prevention – many people out there are looking for ways to make quick money. But, if you keep your contact information out of records, you can avoid lawsuits.
- Asset protection – An anonymous LLC protects you from lawsuits and personal creditors.
How to form a New Mexico LLC?
This process doesn’t have to be challenging; just follow these simple steps:
Choose a business name
The first step to forming an LLC in New Mexico is choosing a business name for your company. In fact, this is one of the most important parts of this journey. Before settling for a name, you need to make sure your business name is unique, and you can check that online.
There are a couple of rules when it comes to naming your LLC:
- You need to use an LLC designator in your company’s name
- For terms like law centers or banks, you need to obtain a special license before applying
- Name cannot be similar to another business name since it will confuse customers
The name is one of the most common reasons why applications get denied. Make sure to do it right the first time because once you’ve chosen the name, you are stuck with it. You could change it, but it involves a lot of fees and paperwork.
Appoint a registered agent
If you want to form an LLC in New Mexico, you are required to assign a registered agent. This person can receive official notices, legal documents, tax forms, and any other documents from the government on your behalf.
You can hire a registered agent or act as one. However, in order to be a registered agent in New Mexico, you need to have a physical address there and be available during official business hours. If you live outside New Mexico, that can be tricky, so it’s best to hire a registered agent service.
Also, you should get a virtual address for LLC to make mailing easier.
File for Articles of Formation
After you’ve hired a registered agent, the next step would be to file for Articles of Formation. This is the document that helps you form LLC as a separate legal entity. You can do this online through the New Mexico Business portal. You will require a credit account to your company’s name, an email, and a credit card.
Create Operating Agreement
This document focuses on the inner workings of your business structure. It is designed to protect the interest of all parties; in case any trouble arises in the future. Standard Operating Agreement includes six articles: organization, management and voting, capital distribution, distribution, membership changes, and dissolution.
In New Mexico, you aren’t required to file an Operating Agreement; however, we suggest you proceed with this step. If something happens to you or another member and you don’t have the Operating Agreement, the state will have to step in to resolve any disputes.
Get an EIN
The last step would be getting an EIN or an employee identification number. This is basically a social security number for your LLC, and it’s issued by the IRS to track your tax reporting. Some of the reasons to get an EIN include: opening a bank account or filing for a credit card, hiring employees, taxes, and separating your personal identity from your business.
So, that’s basically it! We covered all the major things you should know about forming an LLC in New Mexico and why this location is perfect for keeping things private. You could also form a single member LLC in New Mexico under the same terms and conditions.