Choosing a state to start your limited liability company is always a responsible decision. It determines what benefits you will get for your business in the future. Or it will be the other way around, and you will have to deal with high tax rates, state fees, the high cost of renting and buying real estate, and a bunch of other downsides.
To start a business in the state with the best conditions, aspiring businessmen conduct an in-depth analysis of information about all of them. But it’s best to discover the truth by comparison. That’s why we have created this article to compare New Mexico vs Florida LLC formation. For this purpose, we thoroughly studied tax rates, state fees, the company formation process, list of required documents in these states, and are ready to share our conclusions with you. Let’s get to the point!
If you don’t have time to do all by yourself, choose one of the recommended LLC services:
Table of Content
|In any U.S. state, the main advantage of forming an LLC is the protection of its members’ limited liability. This means that all of their personal assets will not be affected if the company is in debt to creditors. This clear separation of personal and business assets gives the founders of the company the protection often termed the corporate veil. Of course, this applies to both New Mexico and Florida LLCs.|
In addition, it is worth noting the simplicity of reporting to the IRS. In most cases, New Mexico or Florida LLCs are pass-through legal entities. This is another significant advantage that is relevant to both states. In this way, it is easier for founders to pay their taxes by doing so through their tax returns. C-corporations, for example, are taxed twice (company income and personal income), which many business owners find a significant disadvantage of this business structure.
Also, there are a couple of other common details for New Mexico and Florida LLC formation. Among them, we would like to highlight:
However, the above information will be relevant for many states in the U.S. If we focus on the differences between the New Mexico and Florida LLC formation, we can see more revealing results.
Although the states in the country have a lot of autonomy, in the case of LLC formation, they have similar requirements.
|If we compare New Mexico vs Florida LLC formation, we notice little difference in tax rates. For example, the tax rate on gross receipts in Florida is 6% and 5.125% in New Mexico. So, both states are quite favorable for setting up a business based on these figures.|
Also, we want to note that New Mexico authorities do not require LLC owners to file annual reports as the Secretaries of other states, including Florida, do. In addition to saving time and effort to fill out additional paperwork, this saves a lot of money. For example, in Florida, the state fee for processing your annual report is $138.75. But if you don’t file your report on time, add another $400 fine to the cost. Although you only pay this fee once a year, in New Mexico, you can avoid it at all. In general, state fees are higher in Florida than in New Mexico. For example, it would cost $100 in Florida for the Secretary of State to review your company’s main document (Articles of Organization). In New Mexico, the cost for this service is half that – $50. However, these are still competitive prices because, in Massachusetts, you have to pay $500 for the Secretary of State to review your document.
The state of New Mexico is a popular choice for registering an LLC. This is all because it gives company founders some benefits favorably affecting the ease of doing business in this state. However, there are a couple of disadvantages that we can’t avoid mentioning.
|Low State Fees||High unemployment rate|
|There is no mandatory filing of the annual report||18% of the state’s population lives below the poverty line|
|No annual fees|
Let’s take a closer look at each of the benefits mentioned above in the article.
|Florida is one of the most preferred states to start a company in and is always in the top 10 states for business in various rankings. Let’s take a closer look at why business people choose this state.|
|Reasonable tax rates||Relatively high cost|
|Low unemployment rate|
We should note the relatively high cost of registering and doing business in Florida in a separate paragraph. Although state fees are not the highest in the country, they are clearly higher than in New Mexico. In addition to the fact that the cost of registration of an LLC in Florida is twice as high, you will also have to pay for the processing of your annual report. Also, add the mandatory annual fee (which is not required in New Mexico) to the amount.
To conclude our article, we suggest comparing Florida LLC vs New Mexico LLC fees and taxes to make it easier for you to see the difference.
|Annual Report Filing||$138,75||$0|
|Annual Franchise Tax||5,5%||Flat annual fee of $50|
|Registered Agent Change||$25||$20|
|Gross receipts tax||6%||5,1%|
In our comparison of Florida LLC vs. New Mexico LLC, we analyzed the company formation process in these states. Although Florida is a very popular place to do business, we want to note the New Mexico Secretary’s commitment to providing a favorable environment for founding an LLC in that state. We wish you the best of luck!