How to Start an LLC in New Mexico | 2024 Guide

Start a LLC in New Mexico

How to Start an LLC in New Mexico: If you’re looking to launch a business in New Mexico, starting a Limited Liability Company (LLC) may be the right choice for you. An LLC provides personal liability protection for its owners while giving them flexibility in managing and taxing the business. This guide provides a step-by-step process for starting an LLC in New Mexico. From choosing a unique name to registering with the state and obtaining necessary licenses and permits, Webinarcare Editorial Team will walk you through setting up your new business entity. So grab a pen and paper, and let’s get started!

What is a Limited Liability Company?

A Limited Liability Company (LLC) is a type of business entity that combines a corporation’s limited liability protection with a partnership’s tax benefits. LLCs are popular among small business owners for their flexibility and ease of formation. In New Mexico, an LLC must have a unique name and file Articles of Organization with the Secretary of State. Depending on their business needs, LLCs may also elect to be taxed as a corporation or an S-corp. Owners of an LLC, called members, are not personally liable for the company’s debts and losses, and the company’s profits and losses are passed through to the member’s personal tax returns. This makes an LLC an attractive option for those seeking personal liability protection and simplified taxation.

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Steps on How to Start an LLC in New Mexico

To form an LLC for your business, you must follow the guidelines that include naming your LLC, hiring a Registered Agent, filing your Articles of Organization, creating your LLC operating agreement, getting an employer identification number, opening a bank account and getting business licenses and permits.

Step 1: Name your LLC in New Mexico

After you have decided on the idea to form an LLC in New Mexico, deciding the name for your LLC is significant. There is a complete guide on LLC name guidelines for you to have a proper LLC business name. Here are some regulations you must follow while naming your LLC,

  • The name should not be confused with a government entity.
  • The name should be unique.
  • The name should be available to use.
  • Any other business does not use the name.
  • The new name must include “LLC” if it is a limited liability company.

In New Mexico, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 120 days. You must file a name reservation application in New Mexico Secretary of State to keep the name.

Recommended: We recommend a professional service that can offer you unlimited name search, trademark and copyright registration at a reasonable price. We recommend using –

LegalZoom($0 + State Fees for LLC Formation)

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for filing New Mexico DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it.

Step 2: Hire a Registered Agent in New Mexico

Hiring a Registered Agent in New Mexico is a must since a Registered Agent is a person or business entity responsible for receiving important legal documents on behalf of your New Mexico LLC. Most states require you to designate a Registered Agent when forming your LLC.

The qualifications of a Registered Agent vary depending on the jurisdiction. Still, generally, a Registered Agent must meet the following criteria:

  • Availability: A Registered Agent must be available during regular business hours to receive and process legal documents and official correspondence.
  • Physical Address: A Registered Agent must have a physical street address within the state where the LLC is registered. This address, known as the registered office, cannot be a P.O. Box.
  • Residency or Authorization: For individuals serving as Registered Agent, they must be residents of the New Mexico where the LLC was formed. A business entity acting as a Registered Agent must be authorized to do business within that state.
  • Age: A Registered Agent must be at least 18 years old.
  • Good standing: A Registered Agent should not have any legal or financial issues that impede their ability to fulfill their duties.

Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. Some businesses use professional Registered Agent services to ensure compliance and proper handling of legal matters.

However, if you would like to have an easier process in filing the necessary documents, you can get New Mexico Registered Agent Services.

Step 3: File your Articles of Organization in New Mexico

The Articles of Organization for an LLC is an important document to start your limited liability company (LLC). New Mexico Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization.

Here are the guidelines and specific requirements in filing your Articles of Organization in New Mexico.

1. Obtain the Necessary Forms: Visit the New Mexico’s business filing office website, usually the New Mexico Secretary of State’s office, to download the required forms or file online.

2. Provide the Required Information: Fill in the necessary details in the form, which typically include:

  • The name of your LLC (must include an LLC designator such as “LLC,” “L.L.C.,” or “Limited Liability Company”)
  • The purpose of your LLC (a general statement or specific business activities)
  • The address of your LLC’s principal place of business
  • The name and address of your registered agent (the person or business entity responsible for receiving legal documents on behalf of your LLC)
  • The management structure of your LLC (member-managed or manager-managed)
  • The duration of your LLC, if not perpetual
  • The names and addresses of the LLC’s organizers or members

3. Sign and File the Form: Submit the completed form in the {state} state office, either by mail, in person, or online. You may mail it at Business Services Division, 325 Don Gaspar, Suite 300 Santa Fe, NM 87501.

4. Pay the Filing Fee: When you submit your Articles of Organization, you’ll need to pay a filing fee of $50. Make sure to check and include the correct payment with your submission.

5. Receive Confirmation: After your Articles of Organization have been filed and processed, you’ll receive a confirmation from New Mexico, typically a stamped and approved copy of the document or a Articles of Organization.

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Once you have successfully filed your Articles of Organization and it has been approved, your New Mexico LLC is officially formed. However, remember to complete additional steps, such as creating an Operating Agreement, obtaining an EIN, and registering for any required licenses and permits.

Step 4: Create Your New Mexico Operating Agreement

An operating agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in most states is not required. Yet, having one as an internal document is strongly advised. An operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

To understand how an operating agreement works, you should check out how to create an operating agreement in New Mexico.

Recommended: Get oprating agreement drafts ready on your table with a help of a professional service. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 5: Get an EIN

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN) in New Mexico. An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in New Mexico can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

In obtaining an EIN for your LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 6: Open a Bank Account and Prepare for Taxes

After you have filed for and received your Employer Identification Number, you should open a bank account because you will use this account for yourself, your clients, and your employees.

Your business dealings in New Mexico might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, having an EIN makes tax preparation easier. You can anticipate paying employment and corporate taxes with New Mexico LLC.

Opening a bank account is necessary for New Mexico business. If you are still wondering where to open an account in your New Mexico, you should check the Best Bank for Small Business in New Mexico.

Step 7: Get a Business and License Permit

You must get a business license in New Mexico before establishing your LLC. A business license is a legal document granted by a state government body that permits you to conduct business within the area under its jurisdiction. The price of business licenses and permits in New Mexico ranges from $50 – $300. If there is a requirement for a specific license or city-based permit, you must inquire with the New Mexico Secretary of State.

Cost to Form an LLC in New Mexico

Even if you have a business name and structure in mind, you should consider whether you can afford the costs of forming an LLC in New Mexico. Articles of Organization costs around $50. The initial filing fee is $50, and the annual fee is $0 because it is not mandatory.

If you forget to pay the annual fee for your New Mexico LLC, you will have a penalty of $0 (not required). However, you can check the New Mexico LLC Cost for additional information.

Advantages of Creating New Mexico LLC

Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via LLC in New Mexico. Important benefits will help you set up an LLC in New Mexico.

  • Pass-Through Taxation: The pass-through structure will make the company not pay twice the tax. Most start-ups and entrepreneurs in New Mexico apply for an LLC because of this structure. Pass-through taxation refers to how income and losses from an LLC (Limited Liability Company) are passed through to its members (owners) for tax purposes rather than being taxed at the business entity level. This means the LLC does not pay federal income taxes; the members’ profits and losses are allocated based on their interests. Each member then reports their share of the LLC’s income or losses on their personal tax returns and pays taxes at their individual tax rates.
  • Ownership Flexibility: If you need sole and primary control over your company’s operations, a sole proprietorship will allow you to do so. If you apply for an LLC in New Mexico with flexibility, you will have default rules set by law and need an operating agreement.
  • Personal Liability Protection: Personal Liability Protection protects your business from damage, debts, or legal obligations. In personal liability protection, the company’s profits and earnings will stay as is even if your company is about to be sued. This protection of having an LLC in New Mexico can also be extended to the company’s properties and assets. Many start-up companies will benefit from this since most are starting to build a company. Even if liability exists, the LLC in New Mexico will protect its assets.

FAQs

What is an LLC in New Mexico?
LLC stands for Limited Liability Company. It is a type of business entity formed in accordance with the laws of the state of New Mexico.
How do I start an LLC in New Mexico?
To start an LLC in New Mexico, you need to file Articles of Organization with the New Mexico Secretary of State.
What is the filing fee for an LLC in New Mexico?
The filing fee for an LLC in New Mexico is $50.
Can I file my LLC paperwork online in New Mexico?
Yes, you can file your LLC paperwork online with the New Mexico Secretary of State.
What is a registered agent in New Mexico?
A registered agent is a person or entity that is designated to receive legal documents and other important mail on behalf of an LLC in New Mexico.
Do I need a registered agent to start an LLC in New Mexico?
Yes, every LLC in New Mexico must have a registered agent.
Can I be my own registered agent in New Mexico?
Yes, you can be the registered agent for your LLC in New Mexico as long as you are a resident of the state.
What is the minimum number of members needed to form an LLC in New Mexico?
An LLC in New Mexico only needs one member to be formed.
Can an LLC in New Mexico have more than one member?
Yes, an LLC in New Mexico can have multiple members.
Is a business license required to start an LLC in New Mexico?
It depends on the type of business. Some businesses in New Mexico require a license or permit while others do not.
What are the annual reporting requirements for an LLC in New Mexico?
An LLC in New Mexico must file an annual report with the Secretary of State and pay a $25 fee.
What is the tax structure for an LLC in New Mexico?
An LLC in New Mexico is classified as a pass-through entity for tax purposes, meaning that the LLC’s income and expenses are passed through to its members and reported on their personal tax returns.
Do I need an operating agreement for my LLC in New Mexico?
It is not required by law, but it is recommended for all LLCs in New Mexico to have an operating agreement.
How do I dissolve an LLC in New Mexico?
You must file Articles of Termination with the New Mexico Secretary of State to dissolve an LLC in New Mexico.
Can I change the name of my LLC in New Mexico after it has been formed?
Yes, you can change the name of your LLC in New Mexico. You will need to file Articles of Amendment with the Secretary of State and pay a $50 fee.
How long does it take to form an LLC in New Mexico?
It typically takes 1-2 days to form an LLC in New Mexico if you file online.
Can I reserve a name for my LLC in New Mexico?
Yes, you can reserve a name for your LLC in New Mexico for up to 120 days by filing a Name Reservation application with the Secretary of State and paying a $20 fee.
Are there any restrictions on the name I choose for my LLC in New Mexico?
The name you choose for your LLC in New Mexico must be unique and cannot conflict with existing business names in the state.
Do s corporations and c corporations have the same rules as LLCs in New Mexico?
No, s corporations and c corporations have different rules and tax structures compared to LLCs in New Mexico.
How much personal liability protection does an LLC provide in New Mexico?
An LLC in New Mexico provides limited liability protection, which means that the members are generally not personally responsible for the debts and obligations of the company.
Can an LLC in New Mexico be taxed as an s corporation?
Yes, an LLC in New Mexico can elect to be taxed as an s corporation if it meets certain requirements.
Does a foreign LLC need to register in New Mexico to do business in the state?
Yes, a foreign LLC that is doing business in New Mexico must register with the Secretary of State.
What is the annual gross receipt tax in New Mexico?
The gross receipt tax in New Mexico varies depending on the type of business and location.
Are there any exemptions from the gross receipts tax for LLCs in New Mexico?
There may be exemptions from the gross receipts tax for certain LLCs in New Mexico, such as those that sell or rent tangible personal property.
Do I need to hire employees to start an LLC in New Mexico?
No, you do not need to hire employees to start an LLC in New Mexico. An LLC can be wholly owned and operated by one person.
Is New Mexico a good state to form an LLC in?
New Mexico is a good state to form an LLC in because it offers low filing fees, user-friendly online filing, tax benefits for small businesses, and flexible operating procedures.
Can I convert my sole proprietorship to an LLC in New Mexico?
Yes, you can convert your sole proprietorship to an LLC in New Mexico by filing Articles of Organization with the Secretary of State.
What is the business code for an LLC in New Mexico?
The business code for an LLC in New Mexico is 6100.
Does an LLC in New Mexico need to have an office in the state?
An LLC in New Mexico must maintain a registered office in the state, but it does not necessarily need to have a physical office location.
What is an LLC and how is it different from a corporation in New Mexico?
An LLC is a limited liability company that offers liability protection for its members, while a corporation is a separate legal entity with its own taxation system and structure.
How do I form an LLC in New Mexico?
To form an LLC in New Mexico, file Articles of Organization with the New Mexico Secretary of State and pay the filing fee.
Do I need an attorney to form an LLC in New Mexico?
No, you can file the Articles of Organization on your own. However, seeking legal advice is always recommended.
How much does it cost to form an LLC in New Mexico?
It costs $50 to file the Articles of Organization for an LLC in New Mexico.
Can an individual own an LLC in New Mexico?
Yes, a single member or multiple-member LLC can be owned by an individual in New Mexico.
Are there any residency requirements to form an LLC in New Mexico?
No, there are no residency requirements to form an LLC in New Mexico.
What is a registered agent and do I need one to form an LLC in New Mexico?
A registered agent is a person or company designated to receive legal documents and government notices on behalf of an LLC. It is required to have a registered agent in New Mexico.
Can I be my own registered agent for my New Mexico LLC?
Yes, you can act as the registered agent for your New Mexico LLC if you meet the requirements.
Do I need to register my LLC with the New Mexico Taxation and Revenue Department?
Yes, you will need to register your LLC with the New Mexico Taxation and Revenue Department and obtain a tax ID number.
What is a tax ID number and why do I need one for my New Mexico LLC?
A tax ID number, also known as an EIN, is a unique identifier for an LLC used for tax filing and business activities. It is required to have an EIN in New Mexico if there are multiple members.
How do I obtain an EIN for my New Mexico LLC?
You can apply for an EIN online with the IRS.
Are there any annual reporting requirements for my New Mexico LLC?
Yes, in New Mexico, you will need to file an annual report and pay a fee.
Do I need to publish my LLC formation in a newspaper in New Mexico?
No, there is no publication requirement for LLCs in New Mexico.
How many members are required to form an LLC in New Mexico?
A New Mexico LLC can have one or more members.
What is a member-managed LLC in New Mexico?
A member-managed LLC is a type of LLC where all members share in the management and decision-making responsibilities.
What is a manager-managed LLC in New Mexico?
A manager-managed LLC is a type of LLC where management is delegated to one or more designated managers who are not necessarily members of the company.
Can a foreign LLC operate in New Mexico?
Yes, a foreign LLC can operate in New Mexico if it registers with the Secretary of State.
Does a New Mexico LLC need to file for a fictitious business name?
Yes, if the LLC is doing business in New Mexico under a name other than its legal name, it must file for a fictitious business name.
What is a fictitious business name in New Mexico?
A fictitious business name is a trading name used by an LLC in New Mexico that is not its legal name.
Can I change the name of my New Mexico LLC?
Yes, you can change the name of your New Mexico LLC by amending the Articles of Organization with the Secretary of State.
Can I convert my existing business to an LLC in New Mexico?
Yes, you can convert an existing business to an LLC in New Mexico by filing Articles of Conversion with the Secretary of State.
Can I dissolve my New Mexico LLC?
Yes, you can dissolve your New Mexico LLC by filing Articles of Dissolution.
What happens if my New Mexico LLC fails to pay taxes, fees or files annual reports?
Failure to pay taxes or fees or filing annual reports may result in revocation or suspension of your LLC in New Mexico.
Are there any professional licensing requirements for certain LLC businesses in New Mexico?
Yes, some industries require LLCs in New Mexico to obtain professional licensing, such as those involved in medicine or law.
Can an LLC be taxed as an S corporation in New Mexico?
Yes, an LLC can elect to be taxed as an S corporation under certain circumstances in New Mexico.
Should I form my LLC in New Mexico or in another state?
It is generally recommended to form your LLC in the state where your business is located, but in some cases, forming an LLC in a state with favorable laws is beneficial.
What are the benefits of forming an LLC in New Mexico?
Benefits of forming an LLC in New Mexico include the simplicity of formation process, flexible management structure, no publication requirement, and tax advantages.

Also Read

How Fast Can I Form an LLC in New Mexico

The good news is that forming an LLC in New Mexico can be a relatively quick and straightforward process. With the right guidance and adherence to the necessary steps, you can have your LLC up and running in no time. One of the first steps you’ll need to take is choosing a name for your LLC. Make sure the name you choose complies with New Mexico’s naming requirements and is not already in use by another business in the state. You can do a quick search on the New Mexico Secretary of State’s website to see if your desired name is available.

Once you’ve chosen a name, you’ll need to file the necessary paperwork with the New Mexico Secretary of State’s office. The key documents you’ll need to file include Articles of Organization and a Certificate of Organization. These documents will outline important details about your LLC, such as its name, address, registered agent, and members or managers. You can file these documents online or by mail, with the online filing option typically being faster.

After you’ve filed the necessary paperwork and paid the required fees, your LLC will officially be registered with the state of New Mexico. However, there are a few additional steps you may need to take depending on the nature of your business. For example, if your LLC will be selling goods and collecting sales tax, you’ll need to register for a New Mexico tax ID number. You may also need to obtain any necessary licenses or permits for your specific industry.

Overall, the process of forming an LLC in New Mexico can be completed in a matter of days or weeks, depending on how quickly you can gather the necessary information and file the required paperwork. Working with a trusted legal or financial advisor can help expedite the process and ensure that you’ve completed all the necessary steps correctly.

Choosing to structure your business as an LLC is a significant step towards protecting your personal assets and establishing credibility with customers and vendors. By following the necessary steps and completing the required paperwork in a timely manner, you can have your LLC up and running quickly and focus on growing your business.

Conclusion

In conclusion, starting an LLC in New Mexico is a strategic choice for entrepreneurs seeking a flexible, straightforward business structure with limited liability protection. By following the essential steps, including choosing a business name, filing Articles of Organization, appointing a Registered Agent, creating an Operating Agreement, obtaining an EIN, and securing the necessary licenses and permits, you can successfully establish your LLC. This business structure offers numerous advantages, such as pass-through taxation and ownership flexibility, making it an attractive option for small business owners looking to grow and protect their ventures. As always, consult legal and business professionals for guidance specific to your situation and state requirements.

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