The filing fee to form an LLC, typically ranges from $40 to $500, depending on the state. New Mexico, with a filing fee of $50, is seen as a favorable state for LLC formation due to its low costs. Other costs include registered agent fees, annual fees (New Mexico has none), and additional expenses like reserving an LLC name, fictitious business name applications, and obtaining a business license.
Forming an LLC requires decisions, paperwork, and time, just like forming any business in the United States. Limited liability companies (LLCs) are a type of business structure that offers a separation between personal and business assets, providing asset protection.
After the LLC is established, LLC owners are not personally liable for a company's debts or liabilities. LLCs offer a hybrid model of benefits, offering both that of a corporation and a partnership or sole proprietorship. This structure includes the drafting of an operating agreement, understanding specific requirements, managing taxes effectively, and the necessity of filing an annual report. Opting for a single member LLC is also a consideration for those looking to maintain simplicity while still enjoying the benefits of an LLC.
There are various fees involved in starting an LLC. The initial filing fee ranges between $40 and $500, depending on the state. The filing fee is a one-time fee paid during formation, it is filed along with documents, such as the articles of incorporation. The average filing fee for an LLC in the United States is $132, but it is only $50 in New Mexico. This is one of the reasons why New Mexico is considered a beneficial state to form an LLC in.
There are also yearly fees associated with an LLC, known as the annual fee. The annual fee is required in order to keep the LLC in compliance. In New Mexico, there is no annual fee.
Another cost that goes along with the formation of an LLC is the registered agent . You can choose a member of the LLC or a manager as the registered agent, but you can also choose to hire a third party. If you hire a third party this service usually costs around $100 to $300 annually.
Although New Mexico is an LLC-friendly state there are a few fees that LLC owners are required to pay during the startup process and annually.
In order to legally establish an LLC, the Articles of Organization are filed to form the LLC. In other states, they are often called the "certificate of formation" or "certificate of organization". In New Mexico, they are filed with the Secretary of State.
Although it is not necessary, you can choose to reserve your LLC name before officially filing, a completely unique name is required in the state of New Mexico. It must also have “Limited Liability Company” “LLC” or another form of this in the name. The cost to reserve an LLC name ranges. But in New Mexico, it is $20.
If you wish to operate your business under a different name than the one you filed under, you can do so. This is called a DBA, or “doing business as” name. It is also known as a fictitious business name. In order to do this, you will be required to pay a filing fee.
Most industries will require a business license to operate. This should depend on the industry that you are in as well. This cost may be anywhere from $50 to $100 on average.
Because LLC profits are not taxed directly, they are passed through to the LLC owners. LLC owners are then taxed at their personal tax rates. Some states do have an annual flat tax, including New Mexico, which is $50.
Starting an LLC is not a complicated process, but there are various fees required to form and stay in compliance. Although fees vary by state when it comes to forming an LLC and keeping it in compliance, New Mexico is considered one of the best states to form an LLC in. This is because there is no annual fee. Consulting with a lawyer can be helpful to ensure that you remain in compliance.
If you are ready to start your New Mexico LLC and have questions or need assistance contact us. Complete the contact form or call +1 (307) 683-0983 to speak with one of our experienced Business Success Advisors.