Delaware LLC vs New Mexico LLC
Comparison of Delaware (premium) vs New Mexico (no annual reports or franchise tax) LLC.
Definition
Delaware LLC: $110 formation, $300/year flat franchise tax. New Mexico LLC: $50 formation, no annual report, no franchise tax for LLCs. New Mexico is about $350/year cheaper. New Mexico offers strongest privacy (no public member disclosure).
Context
New Mexico has the lowest ongoing cost; lacks Delaware case law and counterparty recognition.
Example
A solo content creator forms in New Mexico for ultra-low cost. 5-year cost: about $200 vs Delaware $1,500. Trade-off: limited recognition if dealing with sophisticated counterparties.
Common pitfalls
- Counterparty recognition risk.
- Less case law for dispute resolution.
- Some platforms prefer Delaware.