So I registered a New Mexico LLC last year for a side project that never took off. Now I'm launching a digital marketing agency and wondering if I can just reuse that LLC. I know NM is popular for privacy and no state tax, but does it matter that I'm operating from Texas? Any gotchas with using an NM LLC for services? Should I just form a new one in Texas? Trying to keep costs down but don't want headaches later.
LLC setup
I want to use my New Mexico LLC for a digital marketing agency
You can operate in Texas with an NM LLC, but you'll likely need to register as a foreign entity in Texas. That means filing a certificate of authority and and paying the Texas franchise tax. Not the end of the world, but it's an extra step and cost.
Also, NM has an annual report fee ($0 for the first year? actually it's $0 for the first year then $25? someone correct me) - cheap but dont forget it. And if you're the only member, you can stay anonymous. That's a plus for some.
The annual report is $0 for the first year? I though it was always free in NM. Wait, no, it's $0 for the first year and then $25? I'm confused. Let me look it up. I think it's $0 for the first year and then $25 every year after. Actually, I'm not sure. Maybe someone else knows.
Thanks for the replies. So foreign registration in TX is needed. That's what I was afraid of. Is it a huge pain? And does it blow up the privacy aspect?
Foreign registration in TX is pretty straightforward. You file Form 301 (application for certificate of authority) and pay a $300 filing fee, then you have to file franchise tax reports. Privacy-wise, TX requires you to list a registered agent in TX, and the state will have your info on file, but it's not necessarily public in the same way. If privacy is your main concern, it's a trade-off.
Why not just form a Texas LLC? If you're operating from Texas and serving Texas clients, it's simpler. The NM privacy thing is overhyped unless you have a specific need. Plus, $300 for foreign registration couldd go toward the TX filing fee.
But if you already have the NM LLC, you've already paid the formation fee. Reusing it saves that. And NM has no state income tax, though TX doesn't either. So tax-wise it's a wash. The main difference is the foreign registration hassle.
I think the annual report in NM is actually $0 for the first year and then $25. But Im not 100% sure. Anyway, another thing: if you're doing digital marketing, you might havee clients in multiple states. Then you'd need to register in each state where you have a physical presence or significant activity. That can get messy with an NM LLC if you're not careful.
That's a good point about multiple states. Right now I'm just starting, so probably mostly Texas clients. But I'll keep that in mind.
If you're mostly Texas clients, definitely just register the NM LLC as foreign in TX. It's cheaper than than forming a new TX LLC (which is $300 too, actually). Wait, TX LLC formation is $300. So either way you're paying $300. But reusing saves you the hassle of transferring assets or closing the old one. i'd say reuse it.
Yeah, but don't forget the franchise tax. Even if you don't owe, you have to file. That's an ongoing compliance thing. With a TX LLC, you'd still have franchise tax. So no difference there. I guess reusing makes sense if you're attached to it. But I'd double-check with a CPA or lawyer. Not worth messing up.