If you’ve decided to form a corporation or limited liability company (LLC) for your New Mexico company, you’ve already made one of the most important business decisions you can make. Another crucial decision is whether you’ll form your new business entity yourself, hire an attorney to handle it for you, or opt for a business formation company.
Completing the formation process on your own will always be the most affordable option, but is it the best one? On the other end of the spectrum, hiring a lawyer will provide you with expert assistance, but the cost can be prohibitive for many startups. Somewhere in between these options are online business formation services. These companies can provide professional help while also saving you hundreds or even thousands of dollars compared to paying a business attorney.
If you’d like to learn more about your options for LLC or incorporation services for your New Mexico business, you’ve come to the right place. In this article, we’ll walk you through a few of the best options for business formation services. Which one is the right choice for you?
Let ZenBusiness Handle the Paperwork
Let us at ZenBusiness handle your incorporation paperwork for as little as $0 + state fee so you can focus on building your business. Select your package to begin or learn more about our services.
The Best New Mexico LLC and Incorporation Services
There are dozens of companies providing online business formation services, and many of them offer nearly identical packages. How do you choose the right one?
We welcome you to check out our comprehensive guide to the best LLC and incorporation services available, but we’ll also discuss a few of the most popular options for New Mexico businesses right here.
We think ZenBusiness is the most well-rounded business formation service available today. It’s tough to beat the ZenBusiness pricing model, as we will form your business for free, as long as you pay your own state fee. In addition, ZenBusiness has outstanding customer feedback, with more than 10,000 reviews available online and nearly all of them being positive in nature.
At ZenBusiness, we believe in giving back to the communities we serve. ZenBusiness partners with Kiva.org to provide loans to low-income individuals, and also donates money to help build businesses owned by women and minorities. Doing good while providing helpful business services is the ZenBusiness way!
Northwest Registered Agent
Northwest has a higher pricing model that costs $225 to form your LLC or corporation. What does Northwest Registered Agent do that makes them stand out? In short, Northwest has personalized customer service that goes beyond the support you’ll typically receive in this industry.
While most of its competitors have rather mediocre customer service departments, staffed by outsourced call centers, Northwest has highly trained professionals answering its phones at all times. These experts can help answer many tough questions that some competing companies’ support teams won’t have a clue how to answer.
In addition, Northwest also offers its customers a year of registered agent service. Unlike many competitors, Northwest locally scans every document it receives as your agent, while most other companies only scan the government forms they’re legally required to scan.
Along with ZenBusiness, Incfile is one of a very small handful of companies in this industry that will form an LLC or corporation with no service fees. All you need to do is pay your state’s fee and Incfile will take care of everything else. That’s not the only piece of good news we have regarding Incfile’s business formation services though.
Like ZenBusiness, Incfile also receives strong feedback from its customers, with around 34,000 positive reviews available online and just a few negative reviews.
However, Incfile has a couple of disadvantages as well. Most importantly, Incfile’s customer support team doesn’t always provide timely responses. In addition, Incfile has lots of upsells.
Should You Form a New Mexico LLC or Corporation?
There are some common aspects of the LLC and the corporation, starting with the personal asset protection they both provide. Also known as limited liability, this personal asset protection ensures that if your business is sued, only the business assets are at risk. Meanwhile, your personal assets — like your house, car, personal bank accounts, investments, etc. — are protected by your LLC or corporation’s business structure.
In addition, LLCs and corporations both provide their owners with business name exclusivity. If you own and operate a sole proprietorship or general partnership, you will not have exclusive rights to your business name. Instead, if another company decides to use your name as its own, you won’t be able to stop them. In fact, they could even register your business name and gain exclusive rights to it, forcing you to come up with a new one.
Advantages of the LLC
In general, an LLC is quicker and easier to form than a corporation. LLCs usually need to provide less information for their formation documents than corporations do, and there are fewer steps in the process as well. For instance, LLCs don’t need to draft corporate bylaws, name officers or board members, hold initial board meetings, or issue stock. On the other hand, corporations need to do all of these things and more.
The LLC is also a less rigid business structure that allows its owners greater flexibility. The business structure of a corporation is inflexible, with many regulations dictating how the business should look and function. Meanwhile, LLCs have options for business management structure and ownership responsibilities that corporations simply don’t have.
Another even more valuable option LLCs have is that they can choose how they want to be taxed. Most LLCs are taxed as pass-through entities, which means the business itself does not pay taxes but the profits are passed through the LLC itself to its owners, who pay taxes on this money on their personal returns. However, LLCs can also opt to be taxed like corporations (either as a C corporation or an S corporation), giving them more options for taxation than a corporation has.
Advantages of the Corporation
Corporations have some advantages too, like the ability to sell stock. It’s quite difficult for an LLC to attract outside investments because it cannot issue stock. The vast majority of investors prefer stock as their investment medium, and it’s also very rare to see venture capitalists investing in LLCs. For these reasons, the corporation is a much better option for businesses looking to attract investments.
In addition, the corporation has been around for hundreds of years, while the LLC is a newer addition to the American business landscape. This means that the corporation has more established legalities, and also that it’s easier to expand into other states because the corporation’s structure is essentially the same no matter where you form it.
Hiring an Attorney to Form Your New Mexico LLC or Corporation
If your business is especially complicated, or you simply prefer the peace of mind you get from having a qualified business attorney forming your entity, you could hire a lawyer instead of using a formation service. Hiring an attorney will definitely be far more expensive than using an online service, but you will receive the level of expertise and experience you can only get from a lawyer.
We took a look at a wide range of New Mexico business attorneys to help you find the best person to help you get your new entity up and running. To find reputable lawyers, we consulted Avvo’s list of the top-rated lawyers in New Mexico. Here are our top five choices in this state:
The Total Cost of Forming and Maintaining a Business in New Mexico
In addition to the costs of a business formation service or hiring an attorney (which are optional, as we’ve discussed), there are quite a few other required and optional expenses when forming and maintaining a New Mexico business. You cannot form an LLC in New Mexico without filing the Articles of Organization, or the document that officially registers your business within the state. This filing costs just $50 to submit. Meanwhile, if you’re hoping to form a corporation, you’ll file the Articles of Incorporation instead. The filing fee for this varies based on the number of shares you issue; it starts out at just $100 for 100,000 shares or less, maxing out at $1,000 total. The fee climbs by $1 for every 1,000 shares you issue beyond the first 100,000.
Corporations must file biennial reports every other year (in addition to the initial report, which is almost identical and must be filed within 30 days of forming the business); LLCs are exempt from this requirement. It’s a simple form that keeps the state up-to-date regarding some basic but vital information like your address and registered agent. The fee is $25.
Of course, your business will be responsible for taxes each year, too. Like most states, New Mexico charges different rates for pass-through entities and businesses taxed as corporations. State taxes aren’t the only ones you’ll need to account for, though. You will also have to pay federal taxes, along with several others. For instance, if you have employees, you’ll pay unemployment insurance tax. If you sell goods or services, you’ll pay sales and use tax. Depending on the nature of your business, there could be other taxes required, so check with the New Mexico Department of Taxation and Revenue to make sure.
Other than that, the other potential expenses only apply to certain businesses. These include things like professional or industry-specific business licenses and business insurance.
Frequently Asked Questions About New Mexico Business Formations
Before we wrap things up, here are the answers to some of the most commonly asked questions about forming LLCs and corporations in the state of New Mexico.
What are the business tax rates in New Mexico?
That largely depends on how you elect to be taxed. Businesses taxed as corporations will pay rates ranging between 4.8% and 5.9%, while businesses taxed as pass-through entities pay between 1.7& and 5.9%. Of course, C corporations will still be taxed at the federal rate of 21% (and so will your LLC, if you choose to be taxed as a C corp), while LLC profits are still subject to federal personal income tax brackets.
How long does it take to form an LLC or corporation in New Mexico?
Business formation turnaround times vary considerably from state to state. New Mexico typically processes business formations within 1-3 business days.
How many small businesses are there in New Mexico today?
There are more than 158,000 small businesses currently operating in New Mexico, comprising all but 1% of businesses in the state. Roughly 54% of New Mexico’s workforce is employed by one of these businesses.
What are the top official state resources for entrepreneurs?
The New Mexico Small Business Development Center is an excellent resource for state entrepreneurs, offering business advising for government contracting, financing and grants, cyber security, and much more. There are nearly 20 locations across the state.
What sets New Mexico apart when it comes to forming businesses?
New Mexico is a relatively average place to start a business, but one thing that does stand out is their labor costs; New Mexico actually ranks in the top ten among states with the lowest labor costs. Employees are one of the most expensive parts of running a business, and yet they’re absolutely essential to growth and sustainability. So operating in a state where it’s pretty manageable to have employees is a serious perk.
What else can online business formation companies do?
Companies like ZenBusiness and Incfile don’t stop after forming your LLC or corporation. These providers also offer many other services that can help your business save time and hassle. For instance, these companies can provide registered agent service, annual report service, EIN acquisitions, and much more.
No matter which company you choose to form your new business — or if you opt to form your own, or hire an attorney, etc. — we hope this guide helped you iron out some of the wrinkles regarding LLC and incorporation services in New Mexico.