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Last Updated: 1/25/24
Starting a New Mexico LLC might just be the best decision you make amidst the state’s sweeping deserts and the ever-enticing aroma of green chile. Beyond the scenic landscapes and vibrant culture, New Mexico offers a fertile ground for businesses. Whether you’re envisioning the next big tech startup or a niche café in downtown Albuquerque, establishing an LLC could be your foundation.
Embarking on the limited liability company (LLC) journey in New Mexico is a quest — perhaps not as straightforward as sipping on the local pinon coffee, but with perseverance, it’s a rewarding one. And while a touch of patience is key (and maybe a “Breaking Bad” episode or two for relaxation), rest assured, we’ve got the roadmap for you.
To tap into the benefits of an LLC, make it official by registering with New Mexico’s Office of the Secretary of State (SOS). This step ensures your business has its rightful spot under the New Mexico sun, compliant and ready to serve customers.
Sounds like a lot? Breathe easy! We’re here to break it all down for you, step by step.
Just to clarify, if you’re contemplating foreign LLCs (those conjured outside of New Mexico) or perhaps a professional LLC (PLLC), you’ll need a different guidebook. Our compass here is set squarely on domestic, for-profit LLCs in the Land of Enchantment.
Select a unique name for your company. Before you register your LLC, you need to give it a name. Without a name, you can’t file your registration documents, which means you can’t form an LLC. There are only a handful of rules you need to follow during this process, so you have lots of room to get creative.
Here are the rules for naming your New Mexico LLC:
Once you have a good name in mind, you might have to take extra steps to make sure you can use it. We’ll talk about that next.
Coming up with a good name can be challenging. But you can make sure the name you’ve chosen remains available during the time you complete your registration paperwork by reserving your LLC name.
By submitting an Application for Reservation of Limited Liability Company Name and Document Delivery Form to the Secretary of State, you can reserve your desired name for 120 days.
From a legal standpoint, your name needs to be distinct from the names of other registered businesses in New Mexico and from federally protected trademarks (and any state trademarks). Perform a search on the New Mexico Secretary of State’s business search page to see if your desired business name is available. We highly recommend checking the United States Patent and Trademark Office and the New Mexico Secretary of State’s trademark search page. These searches will help make sure your name doesn’t infringe on trademarks.
But from a practical standpoint, it’s also a good idea to check that your name matches an available web domain and social media handles. After all, an online presence is an integral part of success in today’s business scene; having memorable, easy-to-find names will help set you up for success. To help with this, we offer a helpful domain name registration service. We’ll help you set up your online presence quickly and easily.
You might have heard of a trade name or a “doing business as” (DBA) name before. A DBA is any name you use for your business that’s not the official name, like a nickname. However, New Mexico, is unusual in that it doesn’t require or even permit DBA registration.
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Name a registered agent for your business. By law, your LLC must have a registered agent. The registered agent is responsible for receiving important legal notices and certain official state correspondence on behalf of your LLC. When you form your LLC, your registered agent has to provide a statement to the Secretary of State confirming that they accept the position.
Your New Mexico registered agent is an individual or company that is designated by the LLC to receive important legal documents on behalf of the business. This position is necessary because it helps ensure that the right people within an LLC are notified in the event of time-sensitive events such as service of process for lawsuits and correspondence from the Secretary of State.
New Mexico law (NM Stat § 53-19-5 ) lays out pretty clear requirements for an LLC’s registered agent. Your registered agent needs to meet the following criteria:
No matter what “type” of agent you select, they have to be present at the registered office address during all regular business hours. That way, they can be available to accept documents reliably.
You can legally serve as your own registered agent, but here are various reasons to consider hiring a registered agent service to act as your agent instead, including:
If the state can’t find your LLC’s registered agent, you could lose your LLC. This loss is called a revocation, and it can happen quickly. The state can revoke your LLC after only 30 days without a registered agent or updated registered agent information.
File the LLC paperwork with the Secretary of State. When you’re ready to make your business official, you file Articles of Organization with the Secretary of State. If filing paperwork with state agencies isn’t your thing, we’ve got you covered. We can handle your registration filings for you with our Business Formation Service. Although we can do this task for you, it’s good to know how the formation process works. Take a look below at the basic steps.
You can file your Articles of Organization electronically by creating an account on the Secretary of State’s online portal (there are no paper New Mexico LLC forms). Filing Articles of Organization costs $50. You might have to pay other costs to start your LLC. For more information, take a look at our page on New Mexico LLC costs.
Here’s what you need to include in your Articles of Organization:
When your organizer files your LLC’s Articles of Organization, they must file a statement of acceptance from the registered agent.
If you don’t specify in your Articles of Organization, New Mexico law assumes that your members will manage your LLC. If you want a manager or managers to manage your LLC, you have to let the New Mexico Secretary of State know in your formation documents. A manager can be a member (owner) of the LLC or someone hired from outside the membership. Some members prefer to hire outside managers so they have more time for other business matters and a neutral party involved in running the business.
The information LLCs provide on their Articles of Organization doesn’t always stay the same. If you need to make a change, you have to let the state know. You can update your LLC’s Articles of Organization by filing Articles of Amendment with the SOS. If your registered agent changes, you file a Registered Agent Change online.
If something in your business changes, that usually means you’re too busy to be bogged down with extra paperwork. You can hand off your amendment paperwork to us. Our Amendment Filing Service can file business amendments for you. And our Worry-Free Compliance Service keeps track of your compliance deadlines and handles two amendments per year for your business.
Your LLC can start on a date later than when you file your registration documents. If you want to do this, write it in your Articles of Organization. You might want to do this so you have more control over when your LLC’s tax year starts.
Draft an operating agreement. It’s best to write and sign an operating agreement when you start your LLC. This can help make sure your business runs the way you want.
Your LLC doesn’t have to have an agreement, but having one can help you avoid conflict and maximize control over your operations. Without an agreement, you have to run your business according to the default rules under state law. If New Mexico’s default rules don’t suit your business, an agreement gives you the opportunity to change many of them.
Writing an operating agreement for your LLC can have many benefits. It allows you to:
Writing an operating agreement can help you get the most out of being a business owner.
An operating agreement is a good idea, even if you’re a single-member LLC. Potential investors, future business partners, and vendors may want to see your agreement.
It’s additional evidence that your business is real and separate from you in case someone takes you to court to try to “pierce the corporate veil.” An operating agreement also indicates how everything is to be handled if something happens to you and you can’t run the business anymore.
Feeling unsure as to how to create an operating agreement for your LLC? We offer a customizable template to help get you started.
Get an Employer Identification Number (EIN) from the IRS. An EIN allows you to pay taxes and apply for business resources. If your LLC has employees, operates as a corporation or partnership, or engages in certain business activities, it’s legally required to have an EIN.
If your LLC isn’t required to have an EIN, it’s still useful to have one so you can apply for certain business resources without using your sensitive personal information, like your Social Security number. Your bank will likely require your LLC to have an EIN before you open a business bank account.
You must complete and submit paperwork to the IRS to obtain an EIN. If you’re strapped for time or stressing over this task, you can use our Employer ID Number Service to get it done.
Some LLC owners choose to apply for S corporation designation for their business. This designation can save an LLC money because the business still enjoys pass-through taxation, and the owners of some LLCs can save money on self-employment taxes (the taxes earmarked for Social Security and Medicare). Speak to your tax professional about whether this is the best option for you.
You might have to pay several state taxes after you form an LLC in NM. You can register to pay these taxes online through the New Mexico Taxation and Revenue Department Taxpayer Access Point. There you can register for a New Mexico Business Tax ID.
If your LLC has employees, you need to pay the following taxes and fees:
You can contact the Taxation and Revenue Department and the Department of Workforce Solutions for more information on paying these taxes and fees.
Once your LLC is officially established in New Mexico, there are several key steps you should follow to ensure the smooth operation and compliance of your business. Each of these steps plays a crucial role in setting up your LLC for success.
Securing the appropriate business licenses and permits is a critical step for your New Mexico LLC. The specific licenses required depend on the nature of your business and its location. For example, if you’re opening a restaurant, you’ll need health department permits, whereas a construction business may require building permits. You should check with local and state government agencies to understand the specific licensing requirements for your business type in New Mexico. This step is vital to ensure you operate legally and avoid potential fines.
Our business license report can streamline this step for you.
Once you’ve secured an Employer Identification Number, you’ll be able to open a business bank account. Having separate accounts for business and personal banking is critical for tax time and helps you avoid commingling funds.
Commingling funds not only makes your taxes more difficult, but it could also be used against you. This could happen if someone takes you to court to challenge whether you and your LLC are truly separate entities.
We offer a discounted bank account for your new LLC. This allows for online banking, unlimited transactions, a debit card, and more. If you want to authorize others in your business to use the account, we offer a banking resolution template to simplify the process. You might also want to think about getting a business credit card to start building a credit history.
For further help managing your new business’s finances, try ZenBusiness Money. It can help you create invoices, receive payments, transfer money, and manage clients all in one place.
An efficient accounting system is vital for tracking your business’s financial transactions, budgeting, and preparing for taxes. For small and medium-sized LLCs in New Mexico, numerous user-friendly accounting software options can simplify this process. You can also consider hiring a professional bookkeeper.
These systems help in recording expenses, invoicing clients, and providing financial reports, which are crucial for understanding your business’s financial health and preparing for annual tax obligations.
Staying abreast of legal and regulatory changes is crucial for maintaining your LLC’s compliance in New Mexico. This includes keeping up with state and federal tax laws, employment laws if you have employees, and any industry-specific regulations that might affect your business. Regularly reviewing updates from the New Mexico Secretary of State and consulting with a legal professional can help ensure that your LLC doesn’t run afoul of legal requirements.
Each of these steps is integral to the efficient functioning and legal compliance of your New Mexico LLC. By diligently following them, you can lay a strong foundation for your business’s future growth and success.
When forming an LLC in New Mexico, there are a variety of start-up costs and taxes you should budget for.
Unlike some states, New Mexico doesn’t have an annual report, so you won’t have to worry about filing fees.
As a soon-to-be small business owner, you have several different options for what type of business you can form. So you might be wondering, why should I bother with an LLC?
LLCs in New Mexico present a lot of benefits. Let’s chat through some of the perks you might enjoy.
Taxes are an unavoidable part of running a business, but the nice thing with an LLC is that you can make your tax structure work for you. By default, you’ll be taxed as a pass-through entity, meaning the business income is only taxed at the personal level, not at the business level. This avoids the dreaded double taxation of corporations.
However, an LLC owner might decide to elect to be taxed like a C corporation or even an S corporation. Depending on your unique circumstances, you might actually be able to get tax breaks. For example, S corporations sometimes give business owners a lighter self-employment tax burden. A C corporation might enjoy tax breaks as well, since they can enjoy the fullest range of tax deductions. The luxury with an LLC is that you have the choice.
We highly recommend chatting with a tax attorney to learn which tax structure might be most advantageous for you.
An LLC offers personal asset protection (sometimes called limited personal liability) to its owners. In the event of a lawsuit or defaulted debt, usually only the LLC will lose assets. Creditors usually can’t seize the owners’ personal assets. Corporations (and some other registered business types) also offer this protection.
This makes LLCs more advantageous than unregistered businesses like sole proprietorships or general partnerships. Those business types don’t have personal asset protection.
Technically speaking, LLCs are a little more complicated to start than sole proprietorships or general partnerships, but those businesses don’t have personal asset protections. But compared to corporations (the other popular choice for personal asset protection), LLCs are extremely simple to set up in run.
Are you ready to make New Mexico LLC formation a pleasant experience? We can help you do that. Our business formation services can help you get started quickly, and our business support services can help your business run smoothly.
You have many options to start an LLC in New Mexico. Maybe you want to open a bed and breakfast in Las Cruces or start freelance writing in Rio Rancho. Whatever you start, we hope you start with us because we have your back.
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New Mexico doesn’t have a statewide business license requirement for LLCs. However, depending on your activities, you might have to apply for state business licenses. You might also have to apply for local and federal licenses. Our business license report can help simplify this step.
It costs at least $50 to form a New Mexico LLC. This is the cost to file just your Articles of Organization, so be prepared to pay more if you need to reserve an LLC name or pay licensing fees and taxes.
By default, a New Mexico LLC is a pass-through tax entity. This means that your LLC doesn’t pay federal or state income taxes at the entity level. All income tax liabilities “pass through” to individual members, and only LLC members pay income taxes on their shares.
The pass-through taxation LLCs enjoy is often preferable to the double taxation many corporations endure. Corporate double taxation means that a corporation must pay income taxes at the entity level, and its shareholders must pay income taxes on their individual shares of the corporate income.
You can learn more about your business’s tax obligations from the New Mexico Taxation and Revenue Department.
It can take the New Mexico Secretary of State several days to process some business documents. If you have concerns about how long it will take to process your Articles of Organization, you can call the Secretary of State at 1-800-477-3632.
No. If your LLC has an operating agreement, you don’t need to file it with the state of New Mexico. But you do want to make sure your operating agreement is in a safe place and accessible whenever you need it.
Most LLC owners decide to have their business taxed the default way, which is as a sole proprietorship (for single-member LLCs) or a partnership (for multi-member LLCs). This method only requires LLC members to pay taxes on their percentage of the profits on their personal tax returns. The LLC itself is not taxed. This avoids the “double taxation” that corporate shareholders pay, in which profits are taxed both at the business level and the personal level.
Another option is to choose to be taxed as a C corporation or an S corporation. This option sometimes is favorable for large LLCs that bring in high earnings. You can learn more on our S Corp vs. LLC and LLC vs. Corporation pages.
The tax structure that will work best depends on your business needs. Your best option is to speak to a tax professional about what suits your particular circumstances.
No, New Mexico doesn’t have series LLCs. A series LLC is an LLC that allows its owners to separate business assets into protected groups. In a series LLC, the liabilities and debts of one group of assets don’t affect the other assets owned by the other groups in the LLC.
Before you can officially dissolve your LLC, you have to have consent from the majority of your members’ votes — or you have to follow the protocols in your operating agreement. Once you’re ready to officially dissolve your LLC, you file Articles of Dissolution with the Secretary of State. Learn more on our New Mexico LLC dissolution page.
You can transfer ownership of a New Mexico LLC if you follow the terms regarding transfer in your operating agreement. If you have no operating agreement, you’ll need to follow New Mexico law for ownership transfer. Learn more on our New Mexico LLC ownership transfer page.
No. Unlike most states, New Mexico doesn’t have a process for adopting a DBA name.
You can remove a member by following the terms for member removal in your LLC operating agreement.
No, you don’t need to file an annual report for an LLC in New Mexico.
You don’t legally need a business plan to form an LLC in New Mexico, but you might want to write one for a variety of reasons, including getting funding. Lenders and investors will likely want to see a business plan with market research, owner information, and your financing needs before handing over money.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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