The New Mexico LLC – The Most Private Entity in the USA

Wednesday, March 16th, 2016

One of our most frequent requests or inquiries is how to be “anonymous” or at least not have your name on public records when forming your company. With modern websites like CorporationWiki and state databases, the names of company owners are not only searchable but openly pushed into search results of search engines like Google.

Despite what you’ve heard from many people who push the use of Nevada or Delaware companies, in most cases the owners, Directors (of a Corporation) or Members (of an LLC) are going to be listed on a public database somewhere. This database is almost always searchable to the general public and if not, then an inquiry directly to the Secretary of State by an attorney or other authority will usually get the data they need.

This is where the New Mexico LLC comes into play. As of the date of this post, New Mexico does not require listing the names of the LLC Members on the Articles of Organization when forming the company. More importantly, New Mexico does not require an Annual Report that lists the name of the members. The Annual Report (which is called different things in different states: “Annual List”, “Statement of Information”, etc.) is basically how each state keeps track of a businesses address and owners. This is the big difference between New Mexico and other states: other states may not list the Members or Directors on the initial filing but almost all of them will require it on the Annual Report. New Mexico never asks for it.

This means that as long as you have filed your LLC in New Mexico then the members (owners) are not going to be searchable and you will effectively be anonymous.

There are a few important things to note about the New Mexico LLC:

  • The Articles of Organization do require that you list the name and address of your Registered Agent. This is why we recommend you use a Professional Registered Agent, even if you form the company yourself. This will be another level of anonymity.
  • When you go to open a company bank account, the bank may have issues with the fact that there are no owners listed on any database. Typically this can be overcome with a copy of the Articles of Organization, a signed Operating Agreement and a banking resolution (we provide all of these to our clients).
  • Things may get more complicated when you go to obtain your Federal Employer Identification Number (FEIN or EIN); the IRS requires you to assign a person who is a member of the company to be the “responsible person”. As far as we know, EINs are generally not searchable by the public but this is where anonymity will begin to get more complicated. Some people use a trusted relative or other person to be this person.

So basically, you can form a New Mexico LLC, make sure to use a 3rd party as your Registered Agent and navigate the pitfalls that may come from opening a business bank account and you’ve achieved a level of privacy that most American’s would envy.

 

Urgent Alert for Nevada Corporations

Tuesday, June 23rd, 2015

Urgent Alert for Clients with Nevada Corporations: Additional State Fees Effective July 1st

Dear Clients,

MyNewCompany.com, Inc. has been notified by the Nevada Secretary of State of two fee increases that were recently jammed through the legislature and signed by our Governor via Senate Bill 483 (we’ve only been notified within the past few weeks and it wasn’t clear until a few days ago when the fees would be effective). Those additional fees have been verified and are as follows:

  • The “State Business License” (which is being renamed to the “State Business Registration”) is being raised from $200/year to $500/year effective July 1st for Nevada Corporation’s only – LLC’s and other entities are not affected and will continue to pay the $200/year fee.
  • The “Annual List” which is due every year at the same time is being raised from $125/year to $150/year.

This means that basically it will now cost $650/year plus any Registered Agent fees (our fees are $99/year and guaranteed not to raise) to maintain your Nevada Corporation. I can assure you we and the Nevada Registered Agents Association are as angry about this as our clients. This is probably going to decimate our Nevada business so we’ve come up with the following options for our clients’ that do not want to pay that fee; please remember that time is of the essence and feel free to email or call us about any of the options mentioned below.

We apologize on behalf of the shortsightedness of our Governor and Legislature and hope one of the following 6 options will be beneficial to your company.

Thanks,
Matt Knee
Founder/President
MyNewCompany.com, Inc.

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Option 1: Not using the Company?  File a Dissolution

 

Option 2: Want to remain a Nevada entity but don’t want to pay that fee? Form a New Nevada LLC while Dissolving your current Nevada Corporation.

Important Details:

  • Both the Articles of Organization for the new LLC and the Articles of Dissolution to close the Nevada Corporation must be submitted together to release the Corporation’s name for use as your new LLC name.  Please place both orders at the same time.
  • The state fees start at $175 and the process takes about 10 – 12 Business Days.  Additional services and options and faster filing can be added when ordering.

Pros:

  • Easier than filing a Conversion or Domestication (Discussed Below)
  • Yearly State Maintenance Fees are $350 instead of $650 per year.

Cons:

  • You’ll receive a new State File Date and Effective Date
  • New FEIN (Federal Tax ID) will be required

 

Option 3: File a New Company in your Home State, then Dissolve your Nevada Corporation.

Important Details:

  • The Nevada State Fee for the Dissolution is $100 and the process takes about 10 – 12 Business Days.  Additional options and faster filing can be added when ordering.
  • The State Fees and turnaround time for the company formation depends on your home state.  Fees, packages and options are available on the Online Price Quote

Pros:

  • You can act as your own Registered Agent in your Home State
  • You’ll only have to deal with and pay fees to your Home State.

Cons:

  • You’ll receive a new State File Date and Effective Date
  • You will need a new FEIN (Federal Tax ID)

 

Option 4: Conversion from a Corporation to an LLC in Nevada (Get a quote here)

Important Details:

  • The state fees start at $425 and the process takes about 10 – 12 Business Days.  Additional options for faster filing will be provided with your quote.

Pros:

  • Your FEIN (Federal Tax ID) stays the same.
  • Your State File Date and State Filing Number will stay the same.
  • The State Business License yearly due date does not change, you’ll just pay $200 instead of $500
  • No separate Dissolution is required to close the Nevada Corporation

Cons:

  • A “Plan of Conversion” must be drafted by your attorney and adopted before the Conversion process starts.
  • Your attorney or tax advisor will need to draft a new LLC Operating Agreement to replace your Corporation ByLaws to be adopted when the Conversion has been filed.

 

Option 5: Domesticate (Move) your Corporation from Nevada to Wyoming (Get a quote here)

Important Details:

  • The state fees start at $432 and the process takes about 8 – 10 Business Days.

Pros:

  • More affordable than keeping your Nevada Corporation: State yearly fees are $50 instead of  the $650 per year in Nevada.
  • You keep your FEIN, File Date and company history.

Cons:

  • A “Plan of Domestication” must be drafted by your attorney and adopted before the Domestication process starts.
  • Your attorney or tax advisor will need to draft revisions to your ByLaws to be adopted when the Domestication has been filed.

 

Option 6: Domesticate (Move) your Corporation to your Home State (Get a quote here)

Important Details:

  • The fees and turnaround time depends on your Home State.
  • A detailed fee breakdown and time estimate will be provided with your Custom Quote

Pros:

  • Usually more affordable than keeping your Nevada Corporation: Most states’ yearly fees are lower than the $650 required in Nevada.
  • You keep your FEIN, File Date and company history.

Cons:

  • A “Plan of Domestication” must be drafted by your attorney and adopted before the Domestication process starts.
  • Your attorney or tax advisor will need to draft revisions to your ByLaws to be adopted when the Domestication has been filed.

 

How to Incorporate in Nevada

Wednesday, January 14th, 2015

Forming a Nevada corporation comes with a number of benefits that might be worthwhile. Nevada corporation owners enjoy a pro-business atmosphere, low-tax mentality and freedom from information sharing with the IRS (opposed to other states that have agreed to share your company information). Personal liability protection, prestige and convenience are some additional advantages to incorporating in Nevada.

To get started with forming your corporation in Nevada, you will first need to confirm that your company name is available with the Nevada Secretary of State. Please note that you will need to include a corporate identifier such as Inc., Corp. or Ltd. You can verify that your Nevada corporation name is available through a search with the Nevada Secretary of State online.

Before you go on to file any paperwork with the state, you will need to appoint a Nevada Registered Agent. Your Registered Agent will serve as your main point of physical contact in Nevada and must be available during business hours to receive official state documents and any other legal papers. If you incorporate in Nevada because you plan to operate your business here and will have a physical office, then someone at that location can serve as your registered agent. Otherwise, you will need to select a registered agent provider. MyNewCompany.com can provide you with a Nevada registered agent for only $99/year and is a member of the Nevada Registered Agents Association.

Now that you’ve appointed a registered agent, you can file your state paperwork. You will also need to obtain a Federal Tax ID and open a Nevada business bank account, and submit foreign qualification paperwork with the state where you will do business if you will not be operating in Nevada. Click here to view further steps for incorporating in Nevada. Please be aware of companies that promise you a Nevada company without having to foreign qualify in your actual state of operation. Virtually every state requires that a Nevada company “re-register” in that state to do business there, so if you are operating in a state other than Nevada, you may be required to pay additional fees.

MyNewCompany.com offers Nevada business filing packages starting as low as $79 plus the state filing fee. All packages include unlimited name availability searches, next business day processing, unlimited phone and email support, the new Corporation Handbook, the Nevada Startup Checklist, free company alerts, free first class shipping and more. Visit MyNewCompany.com or Order Online right now!

 

Incorporation Service Scams and Lies

Friday, July 26th, 2013

I will be the first to admit that the incorporation industry does not always have the best business practices or clarity. We’re based in Nevada and frankly, some of the other firms that operate here should be shut down or have their owners put in jail (and some have!).

Here’s a list of common scams, lies, deceptions and falsehoods to avoid if you’re looking to incorporate or form an LLC using a service in our industry:

  • Hidden State Fees: massively inflated state fees. So a company claims to be only charging “$49” to file your company and then hides another $20-50 in the “State Fees” – compare the TOTAL price! The real state fee can be easily verified on each state’s website. 
  • We’ll do it for FREE! Come on you’re smarter than that. This scam typically involves tying you into a “Legal Service Plan” or other type of monthly billed service whereby you will exceed the cost of incorporation by many times. Don’t fall for it.
  • Lower Service Fees by adding higher shipping fees: Add in $39 in shipping fees and suddenly you’re paying much more for that $49 service. Some companies charge that to the state, back from the state and then finally to you!
  • Exploding Fees: you’re enticed with 6 months or a year of  “Free” or “Discounted” registered agent fees then POW! Those fees explode in the next year or so. We’ve seen “Free” go to as high as $289/year!
  • “Professional” Registered Agent Service: many services are simply using a mailbox at the UPS Store or a friend’s house! Beside’s not complying with law, if your company is sued or misses an important notice – whoops! You’ve now lost a lawsuit by default judgment and the company is late or in administratively dissolved status because the person wasn’t home that day or the UPS Store doesn’t know how to handle official legal mail.
  • Incorporate in Delaware, Nevada and Wyoming to save on taxes! Why this may be true for some companies, for the vast majority it is not and actually might involve higher fees for smaller businesses. Read more about this in our article “Which State to Incorporate?“. Again, there are some great reasons to choose those states, but some act like you need to choose those states and in many cases you do not.
  • Free Bylaws or Operating Agreement! This sounds great, until you find out they are blank. Do you know how long it takes to customize one of those? The chances of somebody involved in a busy startup actually doing that is close to zero. The forms should be personalized from the start.
  • Free Stuff: Wow, you’re giving out free stuff that’s already free (software, forms, etc.) – amazing!
  • Encouraging Multiple Entity Strategies: They’ll tell you you need to have a C-Corporation owned by 2 LLC’s, the LLC’s are then owned by each other and then you start another LLC to lease services and supplies back to your Corporation. While this may be a good asset protection strategy for a high-risk or high-growth company  – it may not be appropriate for a small startup that doesn’t have any revenue yet – perhaps start with one simple LLC and go from there. Each of those entities will cost money to maintain, pay taxes, etc. and can get expensive quickly.
  • Outrageously Priced Corporate Kits and Seals: $100 for a minute book? $40 extra for the seal? $40 for 10 Stock/Member certificates? This is madness.
  • Upsell, Upsell, Upsell: So you’ve ordered your company and suddenly the phone rings off the hook, your email inbox and mailbox are exploding.

Here’s what MyNewCompany.com, Inc. does to bring some sanity back to this industry (and hope others follow our lead!): 

  • We don’t hide state fees. Verify our fees against the state. 
  • Regular Shipping is free, FedEx is reasonable and priced at about our cost.
  • Pricing is upfront for any recurring service, guaranteed not to change.
  • We only use real offices for Registered Agent Services staffed by real people that know how to handle this important mail. This includes scanning, uploading, emailing, phone notification and FedEx of important documents.
  • We tell the truth about Delaware, Nevada and Wyoming as shown in the article linked above.
  • We personalize your Bylaws and Operating Agreements and give you a digital copy to easily edit.
  • You know how to find the Free Stuff – this isn’t rocket science, do a google search for “free accounting software” for example.
  • We’re “Startups Made Simple”, not “Multiple Entity Strategies for your One Person Business that will cost 10 times an LLC”. You can order multiple entities from us of course, but we don’t encourage or advise our clients on this one way or the other. Simple is usually best when starting out.
  • Our Corporate Kits are $69 or $79. This includes the Minute Book, the Seal, 20 Stock Certificates and shipping.
  • We don’t sell your info. If you opt-in to a service (like our email newsletter) you can easily unsubscribe. We protect our clients and our Privacy Policy reflects that.

I hope I’ve given you a good overview of the industry and what to expect. Let us know any other scams or lies in the comments and we’ll update this post.

Protecting the Corporate Veil

Monday, September 10th, 2007

One of the primary benefits of incorporating or forming an LLC is the protection of the business owners personal assets from lawsuit. The main problem is that most entrepreneurs simply file the initial paperwork and then completely drop the ball on properly maintaining their corporate veil. This same rule applies whether you have a domestic, Delaware or Nevada Corporation or LLC.

In this article are listed ways to maintain the corporate sheild:

  • Be sure that you always conduct business through and in the name of your entity rather than in your own name (unless you are a sole proprietor). Failure to follow the rules for the entity allows creditors to try to deny you liability protection because you did not really conduct business as an entity.
  • Always have the entity adopt resolutions to authorize action, even if there is only a “ratification” after the fact.
  • Use the proper form of entity signature by always signing documents in representative capacity as an agent of your entity: “XYZ LLC, by John Q. Smith, Managing Member.”
    Use proper signs, advertisements and business cards showing an entity rather than an individual (e.g., “John Smith, President, ABC, Inc.” rather than “John Smith, Owner/Proprietor”).
  • Use proper fictitious name filings.
  • Avoid commingling your business and personal funds in the same bank account.
  • Pay business and personal bills from separate accounts.
  • Maintain separate personal and business bank accounts.
  • Prepare notes and other documentation of all loans between the business and its owners.
  • Your entity must have a minimum capitalization reasonably adequate for the business to be conducted. Insurance counts.
  • Don’t sign contracts or make commitments for the business until you have filed the correct papers to organize it, since you will be personally liable. The liability shield of the corporation or LLC does not exist until the entity exists through a filing in the state capital.

Of course, our clients would already know this as a “compliance checklist” is included in the free handbooks included with every formation of a corporation or LLC that we handle.

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California Small Business Owners are Not Happy

Friday, March 24th, 2006

According to a survey, more than 50% of California small business owners think the State is headed in the wrong direction and are not optimistic about the future.  Excessive regulation, health insurance prices and workers compensation insurance premiums are frequently cited reasons. I believe this is why about 30% of our clients who incorporate in Nevada are actually from California.

(Via Biz Opportunities)

State Business Tax Climate

Tuesday, February 28th, 2006

The Tax Foundation has released their annual report ranking the tax burden and complexity of each State’s tax system.  The best 10 States for business are:

1. Wyoming
2. South Dakota
3. Alaska
4. Florida
5. Nevada
6. New Hampshire
7. Texas
8. Delaware
9. Montana
10. Oregon

The Worst 10 States are:

41. Arkansas
42. Iowa
43. Nebraska
44. Kentucky
45. Maine
46. Vermont
47. Ohio
48. Rhode Island
49. New Jersey
50. New York

Hmmm…sounds like a great reason to incorporate in Nevada or any of the other business friendly states!

via The Entrepreneurial Mind.