New Mexico Corporations are not as broadly popular as our limited liability companies. This is partly due to New Mexico's tax on corporate income. This can be avoided through electing for S-Corp taxation, but this requires filing form 2553 with the IRS.
Corporations have more oversight than an LLC via the Board of Directors which oversees the Corporation's officers. There is also the ability to create multiple share classes, e.g. common and preferred. With this additional flexibility comes complexity, however. There are more required meetings and stricter record keeping is required to protect shareholders.
If you believe a Corporation in New Mexico is for you, then continue reading. Otherwise, view our page on forming a New Mexico LLC.
Form a New Mexico Corporation
One question business owners face is whether to start a company or to operate as a sole-proprietorship. Some business owners believe the incorporation process is too complicated or they are too small to create a company. There is no such thing as too small. Regardless of whether you choose a Corporation or an LLC, you will receive tax and asset protection benefits you cannot as a sole-proprietorship.
Recent tax laws make it beneficial for nearly everyone with the opportunity to operate as a company to do so. Incorporating doesn't need to be difficult either. We can do it for you! We will act as your registered agent in New Mexico and help keep you in compliance.
We are professionals at the New Mexico incorporation process and are happy to do everything for you. Everything we need to form your Corporation is on our order form. After we receive your information we file your articles the same day.
New Mexico Business Structures
There are several advantages to starting a business. One of the greatest is that the company is considered its own person under the eyes of the law. This allows for flexibility when minimizing taxes and protecting assets. By setting up a separate entity than yourself you can structure the money so that you minimize the taxes you pay.
Also, if somebody decides to sue you, the company will be held liable rather than you. Remember that you are not your company. The three most popular ways of doing business in New Mexico are:
Sole-proprietorship (not recommended):It is the simplest and easiest to understand. You just set up shop and go to work with everything in your personal name. What you make is what you earn. Every cent passes through your pocket and the IRS demands that you show it that way. The downsides to a sole-prop are unlimited personal liability and higher taxes.
Limited Liability Companies: LLCs have better tax treatment than sole-props and corporations. They also enjoy the corporate veil and limited liability. They are prized for their simplicity compared to corporations, and offer much better protections that operating in your personal name. Learn about forming an LLC here.
Corporations: These are the most complex, with split share classes mandated meetings, shareholder votes and a board of directors. They can do pretty much anything that a human being can do except for breathe. They have all the same rights that a human does under law. And so any money that the corporation makes belongs to the corporation. This often means double taxation as well.
LLC or Corporation?
Unlike, corporations, limited liability companies have reduced formalities. There is no board to staff, treasurer to appoint, nor quarterly meetings with minutes. This simplicity appeals to many. For these reasons, those living outside of New Mexico will prefer an LLC a majority of the time. They are less expensive, anonymous, have fewer filing requirements and fewer corporate formalities. These benefits make a New Mexico LLC a clear favorite for most going into business. We generally advise clients to form an LLC unless they have received specific advice otherwise. Limited liability companies can also be taxed as sub-chapter s-corporations for those needing s-corp taxation.
Corporations are generally only advisable if there is a need for multiple share classes, or to have a board of directors overseeing officers. If you are the only owner these extra bureaucratic steps are really just a needless hassle.
Form an LLC or Operate as a Sole-Prop?
Sole-proprietorships have the downside of unlimited liability. Any accidents or debts that are incurred YOU will be personally liable for. This puts you at constant threat of bankruptcy. Liability protections aside, The new tax laws make setting up an LLC an easy choice. Just a few thousand dollars in income often provide more than enough tax savings to cover our $199 incorporation cost. Additional savings are like found dollars. The combined tax savings and asset protection make forming an LLC the obvious choice.
N.M. Corporation Benefits
Corporations offer flexibility, stability and an ability to raise capital that other business entities do not. This combination make corporations the go to vehicle for large enterprises.
- New Low Tax Rates
- Nominee Officers Allowed
- Limited Liability
- No Need to Visit
- No Hidden Fees
While corporations have many advantages, small business owners may want to consider forming a New Mexico LLC. Limited Liability Companies are more flexible and easier to maintain in terms of corporate governance. They also allow for anonymous ownership.
Why Incorporate in New Mexico?
The incorporation community does business in New Mexico because of its low fees, anonymity, and simple maintenance requirements. Other states over charge AND force you to disclose information about the owners. Then it gets worse. In future years, other states require an annual report - which is really just an excuse to collect another fee. New Mexico does not require its limited liability companies to file an annual report. The lack of annual fees make New Mexico the cheapest anonymous LLC in the United States.
What's the Incorporation Process?
Our goal is to make doing business in New Mexico as simple as possible. We don't over complicate things and offer transparent pricing. Everyone is happier that way. After receiving your order, we submit the paperwork the same day and notify you immediately when the corporation has been accepted by the Secretary of State. As we like to say, simply complete the form and we will do the rest.
- Complete The Order Form
- Visit Your Online Account
- View Your Documents
- Ask Any Questions
What do you receive?
Every corporation includes articles of incorporation, bylaws, resolution to open a bank account, one year of registered agent service, free mail forwarding, use of our name as incorporator and more. Our $249 fee is all inclusive. The only additional thing you will need to open a bank account is an Employer Identification Number (EIN). You may either have us assist you, the option is on the order form, or follow our step-by-step guide here located under the "Resources" tab in the nav bar.
Either you or us may form your New Mexico company. Doing it yourself will save you some money, but it comes at the cost of having to provide your personal information. When new companies are filed, the Secretary asks for the name of the personal handling the paperwork. Only go this route if you do not care about privacy. Find our guide for incorporating in New Mexico below.
Incorporate With Us - $199
Choosing one of our incorporation packages comes with a few benefits. The first is that we will list our information rather than yours. This ensures your ownership is private. We charge $199 total, this includes all New Mexico Secretary of State fees, your first year of registered agent service, important documents, free mail forwarding and more.
We submit your information to the Secretary on the same day we receive it from you. We don't charge any "expedite" fees, because we believe in doing things quickly for everyone. There is no sense in making you wait two weeks for your company when you can have things done immediately. Follow the relevant links to form an LLC or set up a virtual office.
How to Incorporate Yourself - $125
So you're aware, if you form your company yourself, then your identity will not be kept private, nor will you receive important documents such as an operating agreement.
- Perform a business name search here. The secretary does not consider singular and plural usages of a word to be distinguishable. They also do not consider words such as "the" and "and" to be distinguishable. Keep this in mind when choosing a company name!
- Use our professional New Mexico registered agent service for $119. You may use the document center for storing corporate documents.
- File your articles here. The first step is to create an online account. After registering and validating, you may proceed to complete the required forms. The whole process takes approximately 25 minutes.
- Pay your $50 filing fee. The Secretary will usually accept your company within 48-72 hours of receiving the paperwork.
Congratulations, the Secretary now has your filing! While the filing is done online, it is not processed immediately. The Secretary takes 48-72 hours to review the documents before returning them. You will receive a notification the documents are ready on the Secretary's site. You may use your online document center to store the articles the Secretary provides back. What you receive back on the website are your originals. You may now transact business.
What is an S-Corp?
An S corporation is a special tax designation. This filing must be made the IRS when you apply for an EIN or shortly after. It is a federal designation and does not impact any filings at the state level. Both "C-Corps" and "S-Corps" are equivalent for asset protection and privacy.
An S-Corp is an example of a Pass Through Election. Profits are not taxed at the corporate level, but instead pass through to the owner's individual returns. You should not form an S-Corp just for tax reasons. An LLC is taxed as a pass through entity by default and may be taxed as an S-Corp by request using IRS form 8832 here.
When exiting your stake, the tax owed on capital gains is often less for an S-Corp than a C Corporation. Each form of taxation has certain tax benefits, but you should consult with an accountant for the specifics of your situation.
The limitations are each shareholder must be a US resident, and there may be no more than 75 shareholders - with husbands and wives counting as one. Learn more about incorporating in New Mexico here.
What is a Non-Profit Corporation?
Receiving 501(c)3 designation from the IRS brings several benefits. These benefits arise from the IRS, and government more generally, wanting to incentivize charitable activity. A non-profit should only be formed if you have charitable intentions. The primary reason for establishing one should not be the avoidance of taxes. While it is true there are no taxes, there are also no profits to distribute. Employees can be paid a reasonable salary. We are happy to file the articles of incorporation for your non-profit with the State of New Mexico. We cannot assist with obtaining 501(c)3 status from the Internal Revenue Service however.
What corporate endings are allowed?
The company name may end with a variation of incorporation, corporation, company, limited or an abbreviation of one of these words. If you do not choose one, then by default we add ", Inc.".
New Mexico Incorporations vs Delaware, Wyoming & Nevada
Each state targets a different audience. Which is best is depends upon your goals, though in our experience the simplicity and cost savings of New Mexico win out in the end. Learn more about choosing between incorporating in New Mexico, Nevada, Wyoming and Delaware here.