New Mexico VS Nevada LLC: Which State is Better to Start Business?

Starting a company is an exciting time for every aspiring business person. You surely want to get the benefits for your business from the state's conditions and ensure that it runs smoothly and comfortably.

If you have embarked on a comparison of conditions, tax rates, and fees in different states, then you want to know if it is possible to start a company in a state other than where you live. Our answer is affirmative! You can establish your LLC in any state of the country. But the key question is: where is it the most comfortable to do business?

Today, we offer you a comparison of New Mexico VS Nevada LLC and will tell you in detail about all the pros, cons, and peculiarities of doing business in these states. One of them hides extra fees, and another one can't give large businesses the proper facilities. Let's find out what pitfalls you might encounter on your way!

New Mexico VS Nevada LLC: What's in Common?

Each state has a unique list of requirements for its residents and guests. But when it comes to the specifics of registering an LLC, most State Secretaries put forward a similar list of conditions and guarantees for entrepreneurs. The differences are also present, but mostly, they relate to the pricing policy of the state and tax rates in that area.

If we compare New Mexico VS Nevada LLC, we immediately notice that both states offer corporate responsibility protection. This is the main reason why business people choose an LLC as a business structure. This is its main advantage. So, what does this mean? Your assets and the company's assets are separated. In case of troubles, lawsuits, and other accidents, your personal funds won't suffer.

This is called the corporate veil. You are not a debtor if your company has debts to customers, a bank, or the government. If your LLC has a separate bank account, the corporate veil certainly won't break through. You can safely run your business with a guarantee of liability protection. Both states can give you that.

Also, in both states, you have the ability to start an LLC anonymously. The person/company that files the incorporation documents does not have to be the manager or owner of your future LLC. Even a specially hired LLC formation service can perform these functions. Your personal information will not appear in the founding documents. This further enhances confidentiality and protects you from being personally liable in case of unforeseen situations.

Litigation can strike you even if you run a fairly legitimate and transparent business. For example, a customer may expect more from the service or product you provide than you can actually guarantee. The client may express his/her dissatisfaction in a claim for improper service. However, the court may well acquit you in the end. But if it happens otherwise, your LLC will be liable, not you or the other parties involved.

However, in putting together this New Mexico LLC VS Nevada LLC review, we have noticed some hidden pitfalls of creating an anonymous LLC. The state of Nevada, although it allows you to create a company anonymously, later asks for a list of managers and company members. Further in the article, we'll tell you what this is fraught with.

So, we have compared New Mexico VS Nevada LLC formation, and here are the common points we were able to find:

• The corporate veil guarantee;
• Ability to form an LLC anonymously; 
• Possibility of pass-through taxation for LLCs;
• Ease of filing Articles of Organization.

Nevada VS New Mexico LLC: What Are the Differences?

When comparing New Mexico VS Nevada LLC creation, you want to know more about the differences in this process. And now, we're going to tell you things you won't read on the websites of the Secretaries of State.

We would like to point out a few differences between incorporating in New Mexico vs Nevada:

• Hidden payments in Nevada and no payments in New Mexico;
• The high level of privacy in New Mexico and the risks of personal data leaking into the public domain in Nevada;
• The willingness of Nevada representatives to provide an environment for big business and the lack of such opportunities in New Mexico.

Now, let's talk more about each of these points.

Hidden Payments

The highlight of creating an LLC in New Mexico is low state fees with no hidden charges. That's not something a competing state can boast about. The Nevada Secretary of State attracts business people with reasonable prices to form a company and then dazzles them with additional fees amounting to several hundreds of dollars.

Privacy Level

While the New Mexico Secretary of State tries hard to maintain a high level of privacy for LLC owners, Nevada asks to provide lists of company owners and managers.

State officials promise not to publish the lists anywhere. Of course, this data should be well protected, but no one is immune to theft. So, this information can leak into the network and be used for the purposes of malefactors. This fact disrupts the idea of creating an anonymous LLC in the state. From a privacy standpoint, Nevada is clearly not the best choice for LLC formation.

Conditions for Large Businesses

When comparing New Mexico VS Nevada LLC creation, the latter state may provide better conditions for large businesses. Nevada is a very popular state for company founding, and many large businesses are located there. New Mexico cannot boast the same. However, with the active growth in the number of registered businesses in NM, that may soon change, and the state will become favorable for businesses of all sizes.

New Mexico LLC Creating: Pros and Cons

New Mexico has become a very popular state for starting a business in recent times. The Secretary of State is working hard to make sure that business people are eager to start companies in the area. For this purpose, the state representative maintains the cost of filing registration documents as low as $50.

Advantages

Among the other pros of founding an LLC in New Mexico, we would like to note:

• Low cost of living;
• No need to file annual reports (many states ask LLC founders to file annual reports and charge an additional fee to review this document);
• High level of privacy;
• No annual fees;
• Flexible taxation;
• Tax credit availability;
• Zero property tax;
• All documents can be filed online;
• Low state fees.

Disadvantages

But even such a business-friendly state as New Mexico hides some disadvantages:

• A rather weak economy compared to some other states;
• Limited job market;
• High unemployment rates (although these figures are decreasing every year).

Nevada LLC creating: Pros and Cons

If you compare Nevada vs New Mexico in terms of popularity for business creation, the first state is the clear leader. The Secretary of State focuses on promoting Nevada as a brand. And the state representative is successful at it. Registering an LLC in this state is trendy.

Advantages

What other advantages does Nevada LLC formation have over its competitor?

• Opportunities for big business;
• Relatively low taxes;
• No corporate income tax or personal income tax;
• A business-friendly environment.

Disadvantages

But many aspiring entrepreneurs are discouraged by these disadvantages of doing business in Nevada:

• High state fees and additional charges (state fee to review establishment documents is only $75, but then, you are required to file a list of LLC managers and pay a license tax, which will cost you another $350);
• Poor anonymity;
• You have to file annual reports and pay $150 for the Secretary of State to review them.

LLC New Mexico VS Nevada: Taxes and Fees

In the long run, reduced tax rates and competitive state fees can save you hundreds or even thousands of dollars. For many entrepreneurs, this is the deciding factor in comparing New Mexico VS Nevada LLC formation. We give you some basic figures to help you assess the overall situation more clearly.

Conclusion

In this comparison of Nevada LLC VS New Mexico LLC, you have learned the ins and outs of forming and operating a business in these states. Now, it will be much easier for you to make the right decision that will help your business thrive.

By forming LLCs in both states, you get protection, the ability to do business legally, and the chance to save money. Nevada will offer you low tax rates, and New Mexico will please you with competitive business registration prices. The decision is yours!