Guide to Starting a New Mexico LLC

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. 

How to Start an LLC in New Mexico

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 helps ensure 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.

NM LLC in 5 Steps

1. Name your New Mexico LLC
2. Appoint a registered agent in New Mexico
3. File New Mexico Articles of Organization
4. Create an operating agreement
5. Apply for an EIN
6. File your LLC’s BOI report

Just to clarify, if you’re contemplating foreign LLCs (those conjured outside of New Mexico), you’ll need a different guidebook. Our compass here is set squarely on domestic, for-profit LLCs in the Land of Enchantment.

Step 1: Name your New Mexico LLC

Select a unique name for your company. Before you register your LLC, you need to name your LLC. 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. 

Official Naming Requirements for New Mexico LLCs

Here are the rules for naming your New Mexico LLC:

• Your LLC’s name has to have a phrase or abbreviation in it that identifies it as an LLC, such as “LLC,” “L.L.C.,” “LC,” “L.C.,” or the phrase “limited liability company.” You can also use “Ltd.” or “Co.”
• Your LLC’s name has to be distinguishable from other entity names on record with the state. Our New Mexico Business Entity Search page can help you check whether your desired name is taken. It’s also a good idea to reach out to the New Mexico Secretary of State with any additional questions. 

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. 

Reserving a Business Name in New Mexico

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. 

Is your New Mexico LLC name unique?

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.

Filing for a Trade Name in New Mexico

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.

Step 2: Appoint a registered agent in New Mexico

Name a registered agent for your business. By law, your LLC must have a registered agent. The registered agent (For more information, please see our “What is a registered agent?” page) 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. 

What is a New Mexico registered agent?

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 Registered Agent Requirements

New Mexico law (NM Stat § 53-19-5 [2019]) lays out pretty clear requirements for an LLC’s registered agent. Your registered agent needs to meet the following criteria: 

• Have a registered office address (can be the same as the LLC’s main business place); must be a physical address
• Be an individual resident of the state OR
• Be a domestic corporation, LLC, or partnership OR
• Be a foreign corporation, LLC, or partnership with permission to conduct business in New Mexico

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. 

Serving as Your Own New Mexico Registered Agent

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:

• Availability – A registered agent needs to generally be available at the principal address during normal business hours. This makes it difficult to leave the office to run errands, meet up with potential clients, etc.
• Avoiding Embarrassment – If you serve as your own registered agent and a lawsuit is filed against the business, you could have papers served to you at your office in front of clients. Obviously, that could be bad for business.
• Staying organized – Some registered agent services (like ZenBusiness) help you keep important correspondence for the registered agent organized by keeping it in an online dashboard you can access.

What if the state can’t find my New Mexico registered agent? 

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.

Step 3: File New Mexico Articles of Organization

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 ZenBusiness formation plans. 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. 

Create an online account to file Articles of Organization

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.

Information Needed for New Mexico Articles of Organization

Here’s what you need to include in your Articles of Organization: 

• The name of your LLC
• The street address of your LLC’s registered office
• The name of your LLC’s registered agent
• Duration of the business; if the company has no intention of closing in the foreseeable future, leave this section blank.
• Management structure (whether your LLC will be managed by the members or one or more managers)
• A statement that a manager will have management authority in your LLC (if applicable)
• A statement that your LLC can operate with only one member (if applicable)
• A signature from each LLC organizer

When your organizer files your LLC’s Articles of Organization, they must file a statement of acceptance from the registered agent. 

Member-Managed or Manager-Managed?

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.

Amending the Articles of Organization

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 New Mexico 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. 

Why would I delay my filing date?

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.

Step 4: Create an operating agreement

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. (For more information, please see our operating agreement definition page.)

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. 

Benefits of NM LLC Operating Agreements

Writing an operating agreement for your LLC can have many benefits. It allows you to:

• Establish protocols to make dispute resolution easier.
• Create procedures for transfers of ownership that better suit your business needs. For example, New Mexico’s default law requires all LLC members to give written consent before admitting a new member. If that requirement is too stringent, you can relax it with new terms in your agreement. 
• Write your own rules about how to share profits and losses. Without custom rules, members have to share LLC profits and losses in proportion to their capital contributions.
• Add your own requirements for dissolving the business. LLCs can dissolve by choice if a majority of the members vote to give written consent. You can make dissolution harder or easier with your own agreement. You have a choice regarding when to start your business, why not give yourself a choice regarding when to end it? 
• Create your own standards for member and manager obligations and rights. In an operating agreement, you can dictate what qualifications members and managers should have, what rights they have to act on behalf of the LLC, their voting power, and their responsibilities. 

Writing an operating agreement can help you get the most out of being a business owner. 

Do I need an operating agreement even if I’m the only 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 an operating agreement template to help get you started. 

Step 5: Apply for an EIN

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. 

Can filing an S corp lower my taxes?

Some LLC owners choose to apply for S corporation (please see our “What is an S corp?” page) 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.

Register for New Mexico business taxes

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.

For Employers

If your LLC has employees, you need to pay the following taxes and fees: 

• Unemployment insurance tax
• Workers’ compensation insurance premiums
• Workers’ compensation fee
• Wage withholding tax

You can contact the Taxation and Revenue Department and the Department of Workforce Solutions for more information on paying these taxes and fees. 

Step 6: Submit your LLC’s beneficial ownership information report

The new Corporate Transparency Act went into effect at the beginning of 2024, bringing with it a new requirement for LLCs and other small businesses: filing a beneficial ownership information report, or BOI report. The act’s primary purpose is to counteract financial crimes by making it more difficult to use shell corporations to hide illicit activities. That’s where the BOI report comes in.

In your BOI report, you’ll be asked to provide the name, address, and identifying documents for each beneficial owner of your LLC. A beneficial owner is anyone who gets substantial economic benefit from the business, exercises significant control over it, or holds 25% or more of its ownership interest. To file your BOI report, you can complete the form online with the Financial Crimes Enforcement Network (FinCEN). They also accept PDF uploads. Filing is completely free. 

Failing to file your BOI report can have hefty criminal and civil penalties, so be sure to file on time. If you start your LLC in 2024, you’ll have 90 days after New Mexico approves your Articles of Organization, while LLCs formed in 2025 and beyond will have just 30 days. Any LLCs that filed before 2024 will have until January 1, 2025. 

You can learn more about the BOI report on FinCEN’s website. And if you’d like help filing, check out our BOI report filing service.

After Forming Your New Mexico LLC

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.

Getting Business Licenses and Permits

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. 

Opening a Business Bank Account

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 Money Pro. It can help you create invoices, receive payments, transfer money, and manage clients all in one place.

Setting Up an Accounting System

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 Informed About Ongoing Legal Requirements

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.

LLC Taxes and Fees in New Mexico

When forming an LLC in New Mexico, there are a variety of start-up costs and taxes you should budget for. 

• Articles of Organization: $50
• Registered Agent Service Fee: Varies, but ranges between $100-$300 annually for most services
• Gross Receipts Tax: 5% in many cases (can be charged to the customer, but your business must collect it)
• Additional Taxes and Fees: Varies depending on your business activities
• Business Licenses and Permits: Varies depending on your business activities, ranging from $0 to $50-$100 per year or even more per license
• Business Name Reservation (Optional): $20

Unlike some states, New Mexico doesn’t have an annual report, so you won’t have to worry about filing fees.

Benefits of an LLC in New Mexico

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. 

Tax Flexibility

Taxes are an unavoidable part of running a business, but the nice thing about 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 of 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. 

Personal Asset Protection

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. 

Easy Setup and Maintenance

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 simpler to set up and run.

Related posts:

• Get a DBA for an LLC in New Mexico: No-Nonsense Guide
• Learn How to Form a New Mexico Nonprofit Corporation
• Creating a Rental Property LLC in New Mexico
• Start a New Mexico Corporation

Are you ready to make New Mexico LLC formation a pleasant experience? We can help you do that. Our LLC 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.