Forming any business requires decisions, paperwork, and time, and the same can be said about forming a limited liability company (LLC) in the United States. Limited liability companies (LLCs) are a type of business structure available that offers a separation between personal and business assets.
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.
Cost to Start an LLC
There are various fees involved in starting an LLC. This fee is generally called the filing fee, and 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 annual fees associated with an LLC, and that is 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 is a paid service, usually costing around $100 to $300 annually.
What are LLC Expenses and Fees?
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.
Filing Articles of Organization
In order to legally establish an LLC, the Articles of Organization are filed. They 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.
Reserve an LLC Name
Although it is not necessary, you can choose to reserve your LLC name before officially filing, what is required is having a completely unique name 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.
Fictitious Business Name Applications
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.
Obtaining a Business License
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.
Annual Franchise Tax
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, and in New Mexico, it is $50.
Fees Vary By state
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.