Many of our articles refer to filing your LLC in New Mexico rather than your home state. If you are wondering why, this article will help you consider the pros and cons of a New Mexico LLC.
The number one reason our clients prefer to file in New Mexico is Privacy! Something that none of us seems to have much of these days. Many States offer information regarding LLCs, such as manager name, address, membership, etc online. They are public knowledge. However, New Mexico, does not require the manager name as part of the filing of the Articles of Organization. Therefore, this information does not appear online and is not part of the public record. If privacy is important to you; New Mexico may be a good choice.
Another reason to consider New Mexico is the lack of annual reporting. Many states require an annual report (or sometimes quarterly) as well as a fee; flat or franchise depending on the state. The fees vary but can range from $50 to $800 and it’s one more piece of paper to remember to file each year. New Mexico does not have a reporting requirement or annual fee.
However, you should keep in mind that an annual Registered Agent fee of $125 does apply. (Read our article on registered agents for more information https://www.checkbookira.com/registered-agent/).
It’s important to understand that a New Mexico LLC can do business in your home State or any other. If you are investing in property in your State (or another); New Mexico might not be the best choice. Different States have different rulings regarding the ownership of property so it is best to check before you apply for a LLC.
Overall, New Mexico is a good option if privacy and lack of annual reporting are important to you.
“Different States have different rulings regarding the ownership of property so it is best to check before you apply for a LLC.”
I’m wanting to purchase property in Florida and where I live, Kentucky.
Different States have different rulings regarding the ownership of property so it is best to check before you apply for a LLC.
If you guys can’t answer… who can?
Hi Richard,
It would be hard for us to do anything in detail for all 50 States – that would just be unwieldy and confusing for people, given everyone’s situation is different. As a general rule though, if the LLC buys property for the purposes of renting it out, almost all States will consider that to be an activity that will require the LLC register as a foreign entity.
So in your case, if you were to have the LLC formed in Kentucky, when it goes into Florida to buy rental property, the LLC would need to file with Florida as a foreign entity, and be subject to Florida’s annual filing requirements and annual fee.
If the property is owned, but is not rented out, then most States will not require the LLC to file as a foreign entity. So as a general rule, if the LLC is going to buy property and rent it out, the LLC should be registered in the State where the property is located.
If LLC formed New Mexico is for consulting purposes and will receive money from Delaware LLC, are there any cons say compared to Wyoming one?
Hi Kiril,
Are you talking about an LLC that you own personally? If so, then it depends on your situation. Give us a call and we can discuss.
Any guidance on whether foreign registration is typically required for a promissory note, secured by property in a given state? Thinking about TX in particular.
I’m not aware of any reason why the LLC would be required to register as a foreign entity in Texas just for holding a note on a property there. Having said that, I would suggest calling a local attorney in Texas, just to make sure.