New Mexico Incorporation: Incorporate in New Mexico
New Mexico Incorporation
New Mexico incorporation enables the owner of the company get double benefit. This includes benefits on the taxation of a partnership as well as limited liability. It separates the members of the corporation from business liability and is considered a separate legal entity. A member of a New Mexico corporation can be taxed as a corporation or as a disregarded entity for taxation purpose based on the rules set by the IRS. If the corporation has multiple owners, they can be taxed as a partnership or a corporation based on the kind of business as well as income generated.
Safeguarded Liability when you incorporate in New Mexico
When you incorporate in New Mexico the separate legal entity safeguards the owners of the liability, debts and contractual obligations of the business. To increase the extent of protection that the company can get against liability, it should be operated effectively. This can be done through proper filings of Articles of Incorporation to maintain good reputation with the New Mexico state office as well as handle the operations of the business effectively. Personal and company funds should be kept separate and business decisions should be well documented by the officers in the annual meeting minutes.
New Mexico incorporation is considered a "pass through" tax entity in which the profit and losses of the company are equally distributed among those who own it and is reported on their personal tax filings or returns. The corporation does not pay business taxes at the company level; owners need to pay taxes based on their income at the individual level.