DBA with a LLC formed in another state?

[SMF88011]

What is the name of your state? NM

We have a LLC that was formed in WY. We are moving to NM and want to continue to use the LLC but want to know if there is anything special we have to do to be able to use a different name for it with a DBA. Do we need to register the DBA in WY where the LLC is formed or do it in NM?

What I am talking about is if I have a LLC named FCS Wyoming. What do I need to do to add a DBA so we can do business in NM as FCS New Mexico?

 

[zddoodah]

We have a LLC that was formed in WY. We are moving to NM and want to continue to use the LLC but want to know if there is anything special we have to do to be able to use a different name for it with a DBA.

For starters, if you intend for your Wyoming LLC to conduct business in New Mexico, you'll need to have it qualified with the New Mexico Secretary of State as a foreign LLC. Before doing that, you might want to consult with a local business attorney to determine whether paying taxes in both NM and WY is in the LLC's best interests and whether it might be better to dissolve the WY LLC and create a NM LLC. If you do want your LLC to do business under a fictitious name, you'll need to file a dba statement with the appropriate local/county agency. You would not need to "register" your dba in Wyoming if the LLC is not doing business in Wyoming under that name.

 

[Taxing Matters]

Before doing that, you might want to consult with a local business attorney to determine whether paying taxes in both NM and WY is in the LLC's best interests and whether it might be better to dissolve the WY LLC and create a NM LLC.

I don't know what taxes you have in mind here. However, there wouldn't be any income tax to pay in WY because that state has no income tax. Even if it did, once the OP moved to NM there would only be income tax in WY to the extent that the LLC actually did business in that state.

However, there is the extra layer of registration now in two states if the LLC is kept in WY, which adds a slight administrative burden and potential duplicative costs. It is easy to move a LLC from one state to another either by using a state continuation statute (if the new state has one) or by setting up a new LLC in the new state and then merging the old one into the new one with the new one surviving. Either way is generally preferable to simply dissolving the LLC in WY and forming a new one in NM as that would break the continuation of the business and may have undesirable effects, including federal income tax consequences.

 

[quincy]

Wyoming offers your LLC what New Mexico doesn’t. No income tax. In New Mexico, there is a corporate income tax to pay.

You can add your DBA name to your Wyoming LLC and register the DBA with New Mexico’s Secretary of State. There are no annual fees in New Mexico so you won’t be adding to the low annual fees ($50?) you pay in Wyoming.

You should sit down with a business law professional to discuss your options and figure out which make the best sense for your business.

Be sure to carefully research the business name you choose to operate under in New Mexico to ensure you are not infringing on anyone else’s trademark rights. I will assume you did a comparable search when selecting the name for your LLC.

Good luck.

 

[Taxing Matters]

Wyoming offers your LLC what New Mexico doesn’t. No income tax. In New Mexico, there is a corporate income tax to pay.

There is a corporate income tax in NM, but it won't apply to the OP unless he/she has elected with the IRS for the LLC to be taxed as a corporation. A LLC is not itself a corporation and does not pay federal or NM corporate income tax unless it has elected with the IRS to be taxed as a corporation. Note that the corporate income tax would apply to a WY corporation doing business in NM as well as to a corporation created and organized in NM. Corporations (and entities taxed as corporations) organized in NM or that do business in NM also pay a $50 annual franchise tax. In short, keeping the WY LLC after the move to NM won't save the OP any NM income tax (or franchise tax). If the election was made to tax the LLC as a corporation then NM will get its corporation income tax and franchise tax either way. If no such election was made then these taxes will not apply and the owners of the LLC will be taxed on the LLC income on their individual NM income tax returns.

 

[quincy]

Thanks for the clarification.

 

[SMF88011]

Thank you very much for all of your input. Most of our income will be from online work in CA which is a continuation of what we did before. The issue is that we are now are being asked by a small local business to do some contract work for them and debating if it is worth the effort.

As for the DBA, it is because our chosen name wasn't allowed because PC is not allowed to be in a name of a WY LLC. We prefer to use PC (as in computers) as our name instead of "Computer". Might not be worth the effort.

 

[quincy]

Thank you very much for all of your input. Most of our income will be from online work in CA which is a continuation of what we did before. The issue is that we are now are being asked by a small local business to do some contract work for them and debating if it is worth the effort.

As for the DBA, it is because our chosen name wasn't allowed because PC is not allowed to be in a name of a WY LLC. We prefer to use PC (as in computers) as our name instead of "Computer". Might not be worth the effort.

Right. It might not be worth the effort.

I recommend that you go over all of your options, and the pros and cons of each option, with a business law professional in your area.

Good luck with your business.

 

[quincy]

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