New Mexico LLC advantages disadvantages

New Mexico LLC Advantages Disadvantages

New Mexico LLC Advantages and Disadvantages:

A New Mexico LLC offers business entrepreneurs the form of corporate organization that provides perhaps the most flexibility to you. An LLC formation, like the alternative corporate forms of organization like alimited partnership or aSubchapter S Corporation, are generally prime candidates for a business juststarting. The state of New Mexico gives public support to an New Mexico LLC.

New Mexico LLC Advantages Disadvantages

Should I form a New Mexico LLC?

A New Mexico LLC Advantages and Disadvantages satisfies a necessary condition of your business planning developement in that it meets the requirement that you establish a legal form of organization in order to gain the statutory benefits and protection available in New Mexico to your LLC. Your New Mexico LLC establishes a legal presence within the state, which you can use either as a platform for in-state operations or by registering your New Mexico LLC via your agent's physical address in order to meet the purely statutory requirement for tax and filing purposes absent an in state operation.

New Mexico LLC Advantages Disadvantages

New Mexico LLC Advantages Disadvantages

Advantages of LLC

  • Limited Liability: Owners of a LLC have the limited liability protection of a corporation.

  • Flexible Profit Distribution: Limited liability companies can select varying forms of distribution of profits. Unlike a common partnership where the split is 50-50, LLC have much more flexibility.

  • No Minutes: Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.

  • Flow Through Taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. Usually, this will be a tax advantage, but circumstances can favor a corporate tax structure.

New Mexico LLC Advantages Disadvantages

Disadvantages of LLC

  • Limited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy.

  • Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure.

  • Added Complexity: Running a sole-proprietorship or partnership will have less paperwork and complexity. A LLC may federally be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default may apply.

By New Mexico and other state law in order to proceed with forming a llc, you need to prepare a written abstract detailing your llc purpose, the names of your initial New Mexico LLC members, the name and address of your New Mexico registered agent, the details of which will be introduced into the body of your LLC operating agreement and related New Mexico LLC formation documents assembled for application to the state of New Mexico.

New Mexico LLC Advantages Disadvantages

New Mexico's 2012 Business Tax Climate Ranks 38th

New Mexico ranks 38th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states rank as follows: Utah (10th), Arizona (27th), Texas (9th), Oklahoma (33rd) and Colorado (16th).

New Mexico's Individual Income Tax System

New Mexico's personal income tax system consists of four brackets and a top rate of 4.9%, kicking in at an income level of $16,000. Among states levying personal income taxes, New Mexico's top rate is 36th highest nationally.

New Mexico's Corporate Income Tax System

New Mexico's corporate tax structure consists of three brackets, with a top rate of 7.6% kicking in at $1,000,000 of net income. Among states levying corporate income taxes, this top tax rate ranks New Mexico 20th highest


Tax Foundation

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