Forming a Limited Liability Company (LLC) is a great way to start a business. Forming an LLC will offer you many advantages that you simply wouldn’t be able to get from running your business as a sold-proprietorship. However, another key point to consider would be the state you form the LLC in. In the rest of this article, we will discuss some of the benefits of forming an LLC in the state of New Mexico.
Some Of The Benefits Of Forming a New Mexico LLC:
- Streamlined LLC Benefits
One of the top reasons you are likely considering forming an LLC in the first place would be to take advantage of the many protections it offers. When you decide to form an LLC in New Mexico, you will get the same protections you would get from other states that have effectively adopted the Revised Uniform Limited Liability Company Act. Therefore, you can expect to get a lot of the same benefits that you would in other states that have enacted it.
- Tax Benefits
Anytime you are searching for a state to form an LLC, you are likely to consider the tax benefits or disadvantages. When it comes to New Mexico, you may be away from the tax benefits for residents. There are also tax benefits that you get for having an LLC in the state. Your LLC will be free of taxation on a state level. Therefore, you will not be required to pay taxes to the state and you will be able to decide how you want to be taxed on a federal level. Thus, you can figure out whether it would be more beneficial to be taxed as a partnership or a corporation. As a result of all of the tax flexibility that New Mexico offers, it maintains a #4 ranking in the 2020 State Business Tax Climate Index. This alone should be one of the reasons you opt to start your LLC in New Mexico over another state.
- More Protection and Limited Liability
When you decide to start your LLC in New Mexico, you will be able to get numerous protection benefits which further enhance the idea of using New Mexico as your preferred state. In fact, according to New Mexico’s state law, you won’t be liable for an LLC’s debts as a manager, managing member, or a member. Therefore, you will be heavily protected under state law which can put your mind at ease when it comes to running your business.
- Maintain Maximum Flexibility
As with forming an LLC in other states, you will get high-level flexibility with a New Mexico LLC. This means you will be able to figure out the distribution of profits which can have tax implications and more.
Overall, starting an LLC is one of the best things you can do for your business. Not only does it give smaller businesses the attractive features of a corporation, but it also maintains the high-level flexibility offered by a sole proprietorship. However, forming an LLC in New Mexico offers numerous benefits that make it a good state to consider for anyone. However, it is even more beneficial if you are planning on forming your LLC and operating in the state. Some of the benefits that New Mexico offers to LLCs do require a physical presence in New Mexico. Therefore, it is something to consider if you are planning on forming an LLC only to operate in a different state. Because of this, you should be looking at your specific situation and scenario to ensure that you are making the best possible decision. However, regardless of the physical presence that is required, numerous benefits make it one of the best places to form an LLC.