“Limited liability” is shorthand for the type of protections that corporations have traditionally held. Corporate liability is generally limited to the value of the company assets. The same rules apply to LLCs. For example, the threat of tort liability for the company that owns a car, or a fleet of cars, is limited to the value of the company, not the wealth of the owner of the company. Because NM LLCs are inexpensive, a separate company can be formed to own each distinct asset and limit liability based on its ownership to the value of the asset. WORD OF CAUTION: personal liability of humans for their deliberate acts or their negligence is not limited by LLC ownership.
Interests in your New Mexico LLC are represented by Membership Certificates that show your percentage share of the company. These certificates fall under the definition of “securities” and are subject to state and federal laws regulating the transfer of securities. But for most family companies where the prospects for sale are limited, LLC ownership is exempt from securities laws.
Bienvenidos is a welcome without strings.New Mexico welcomes you without red tape as only New Mexico can.
Our population is small and our state government is not over-reaching. We are like a friendly island, even though we have no shore. But we are a full-fledged state with a modern American legal system. Your company is protected by the U.S. Constitution and respected in every jurisdiction that honors American law.
The only requirement for presence in the State of New Mexico is the need for a New Mexico Registered Agent with a street address in the state. New Mexico laws do not limit ownership of the Company, though federal law may require reporting of ownership by non-U. S. citizens.
Our legislators are very part time and don’t have large staffs. So our statutory schemes are often very simple, based on model laws written by scholars and practitioners from other U. S. jurisdictions. We are sometimes among the first to adopt progressive laws, as we did in 1993 when we enacted the Limited Liability Company Act. In that same year, the IRS recognized LLCs. Unlike Delaware, Nevada, Wyoming and other states that deliberately appeal to out-of-state markets, New Mexico legislatures have not approached entity-formation as a significant source of revenue for the state and have not developed a bureaucracy to collect taxes and fees. Rather, New Mexico keeps the involvement of the Secretary of State with its LLCs to a minimum.
Your interest in your NM LLC will become part of your estate upon your death. New Mexico has no inheritance tax. Furthermore, New Mexico has a special law that allows the Transfer on Death (TOD) registration of your membership in the internal records of the company. By using this option, you can avoid public probate of your ownership interest.