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Today is as good a day as any to become a New Mexico business owner. So where do you start? Could you see yourself opening a limited liability company (LLC) in The Land of Enchantment? If so, take a look below at our general guide on how to start an LLC in New Mexico.
To form an LLC in New Mexico, you need to follow several state (and sometimes local and federal) rules. The process involves paperwork, research, and a little bit of patience, and we can walk you through it. While there are foreign LLCs (LLCs formed outside New Mexico) and domestic LLCs, our guide addresses only domestic, for-profit LLCs.
New Mexico is home to millions of residents and plenty of roadrunners, and the state offers several incentives for businesses. Let’s look at how you can take advantage of what LLC ownership in this southwestern state can offer.
To take advantage of any LLC benefits in New Mexico, you need to register your LLC with New Mexico’s Office of the Secretary of State (SOS). Once you register, your business becomes part of a searchable record that the public can access. Your registration also helps the state track your business’s compliance.
Any domestic New Mexico LLC also needs to choose a registered agent. This individual is responsible for receiving important legal notices for your LLC. And for added control and legal protection, you want to write an operating agreement that governs your LLC’s business relationships and operations.
Many LLCs will also need to register with the federal government. A common federal obligation is registering with the IRS. And some LLCs might need to obtain federal licenses as well.
Don’t fret if this sounds complicated. We’re about to break the formation process down for you in the following steps.
LLC requirements vary state by state so it’s important that you are well-versed in New Mexico laws before proceeding. Generally, it comes down to these steps:
Each business has unique needs, but there are five basic steps you follow to form an LLC in NM. Our business support products and services can make these steps less daunting and a lot more fun.
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. Even better, our Name Reservation Service can complete this task for you.
It’s important to make choices for your business that make sense together. This includes choosing an LLC name and a domain name that match or complement each other. Ensuring these identifiers have a good connection can help you retain clients and customers. We provide Domain Name Registration and Name Reservation Services to help you quickly secure the names you want to use.
Trademarking your LLC’s name can provide your business with an added layer of protection. With a trademark, you can bolster your rights to take legal action against a business that uses a name confusingly similar to yours. You can also legally protect yourself against businesses that might accuse you of infringement.
To get a state trademark, you can submit an Application for Registration of Trademark to the SOS. If you want a federal trademark, you can apply with the United States Patent and Trademark Office. Even if your business is local, a federal trademark can help protect your e-commerce activities and make business expansion easier.
You might have heard of a “doing business as” (DBA) name before. A DBA is any name you use for your business that’s not the official name. In New Mexico, this is called a trade name.
A trade name can be useful when you want to market different services from your LLC in separate ways. You register a trade name the same way you register a trademark.
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Your LLC must have a registered agent. The registered agent is your LLC’s point of contact for receiving important legal and official correspondence in person. When you form your LLC, your registered agent has to provide a statement to the Secretary of State confirming that they accept the position.
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.
It might be tempting, but acting as your own registered agent could cause more harm than good. If you act as your own registered agent, you run a high risk of professional embarrassment because you might receive notice of a lawsuit or other damaging information in front of patrons. Acting as your own registered agent also requires your constant physical presence at your LLC’s registered office. Being tied to one location this way can cut into your ability to grow your business.
Using a registered agent service for your LLC can save you time, give you flexibility, and help you avoid embarrassment. A registered agent service can also make it easier for your LLC to comply with state business laws.
By using our Registered Agent Service, you can eliminate worries about not fulfilling your registered agent obligations. We provide you with a registered agent that works with your business and legal needs. And using our Registered Agent Service with our Worry-Free Compliance Services helps you avoid failures to update your registered agent information.
Our Registered Agent Service also comes with a dashboard that keeps all correspondence your agent receives in one easily accessible place. This can help you avoid missing legal deadlines and important notices.
Because your LLC’s registered office doesn’t have to be the same as its principal office, using a registered agent service means you can easily make business changes while your registered agent stays the same. If you’re looking for a registered agent service, look no further, we’re right here. Our New Mexico Registered Agent Service can help you quickly secure a registered agent that suits your needs.
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. 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 managers to manage your LLC, you have to let the Secretary of State know in your formation documents. 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.
It’s best to write and sign an Operating Agreement when you start your state of New Mexico LLC. This can help make sure your business runs the way you want.
Your LLC doesn’t have to have an Operating Agreement, but having one can help you avoid conflict and maximize control over your operations. Without an Operating Agreement, you have run your business according to the default rules under New Mexico law. If New Mexico’s default rules don’t suit your business, an Operating Agreement gives you the opportunity to change many of them.
Writing an Operating Agreement for your state of New Mexico 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.
Though not required, having an Operating Agreement for a single-member LLC can be helpful. This way, you have your business rules already in place if you ever choose to admit more members. Also, having an Operating Agreement can protect you financially and legally and make it easier to secure financing.
What you include in your Operating Agreement is up to you and dependent on your specific needs. The Operating Agreement subjects we listed above can be solid places to start. And if you need a good outline for your Operating Agreement, you can use our customizable New Mexico Operating Agreement Template.
The last important step is to get an Employer Identification Number (EIN) from the IRS 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 has to have an EIN to pay its federal taxes.
If your LLC isn’t required to have an EIN, it’s still essential to have one so you can apply for certain business resources without using your sensitive personal information. Your bank might also 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 give their business an S Corporation designation. This designation can save an LLC money because the business still enjoys pass-through taxation, and the rules for self-employment taxes are more flexible. 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 & Revenue Department Taxpayer Access Point.
If your LLC has employees, you need to pay the following taxes and fees:
You can contact the Taxation & Revenue Department and the Department of Workforce Solutions for more information on paying these taxes and fees.
Keeping track of the money that comes in and goes out of your business can make your head spin. Whether you’re inundated with frequent deposits, tax liabilities, or invoices, we can help you manage.
Our Banking Resolution Template can help you authorize others to open business bank accounts or sign on your LLC’s behalf. And ZenBusiness Money can help you track and manage all of your LLC finances in one place.
We can help
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.
Disclaimer: The content on this page is for informational 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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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.
Figuring out what all of your licensing obligations are at every level of government can be daunting. We can take the stress out of this for you with our Business License Report. Our partners at Avalara research your licensing needs, and we provide you with a comprehensive report outlining all of your obligations.
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 several licensing fees and taxes.
Some of the most attractive features of a New Mexico LLC are personal protection and flexibility. When you form a New Mexico LLC, you create a business that is legally separate from your personal life. The debts and liabilities of your LLC don’t attach to your personal assets. And an LLC gives you the kind of personal protection you can get from a corporation, but with fewer rules and formalities.
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.
It can take the 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.
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.
You have multiple choices for the tax structure of your LLC. Because each business has different needs, speaking to a tax professional can help you make the best selection.
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 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 or Articles of Organization. Once you’re ready to officially dissolve your LLC, you file Articles of Dissolution with the Secretary of State.
You can transfer ownership of a New Mexico LLC if you have written consent of all members. Or you can transfer ownership if you follow the terms regarding transfer in your Operating Agreement or Articles of Organization.
Yes. A DBA is a trade name in New Mexico. You can register your LLC’s trade name with the Secretary of State.
You can remove a member if all other members consent or if you follow the terms for removal in the LLC Operating Agreement or Articles of Organization.
No, you don’t need to file an annual report for a state of New Mexico LLC.
You don’t need a business plan to form an LLC in New Mexico, but you might need one to get 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.
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