There are several benefits to opening a small business in New Mexico, such as the fact that the state has low labor costs, affordable real estate, and one of the lowest property taxes in the nation. What's more, NM small businesses aren't required to file annual reports or pay annual fees to the state.
When you establish a limited liability company in New Mexico, you can enjoy tax flexibility and limited liability protection, among other business incentives. If you're interested in opening your own small business, follow along to learn how to form a professional LLC in the Land of Enchantment.
How to form a New Mexico LLC in 6 steps
Creating a domestic LLC in New Mexico isn't complicated, but you must follow these steps to ensure your business complies with state regulations. Discover how to form a New Mexico LLC in a few simple steps.
1. Choose your business name
The first step is to choose a business name for your LLC. This involves selecting a name that complies with state rules and regulations.
The following are some examples of naming requirements in New Mexico:
- Your business name must contain the words "limited liability company,” “LLC,” or “L.L.C” or abbreviations of those words.
- The name cannot falsely suggest that it's associated with a government agency.
- Your LLC name cannot include restricted words, such as "bank, "attorney," or "university."
- The name must be distinguishable from other business names already registered with the state.
To ensure your business name does not already exist, perform a New Mexico LLC search. Navigate to the New Mexico Secretary of State’s business name search tool to browse the database of registered businesses and confirm your name is unique.
If you've landed on a business name but you're not ready to register your business just yet, you can reserve the name with the New Mexico Secretary of State Corporations Bureau. Simply fill out the application and pay the $20 filing fee to reserve your business name for 120 days.
2. Appoint a registered agent
One New Mexico LLC requirement is to appoint a registered agent to oversee official correspondence between your business and the government.
Your New Mexico registered agent must adhere to the following regulations:
- They must have a physical address in the state.
- Their address cannot be a P.O. Box.
- They must be available during normal business hours.
- They must be at least 18 years old.
You can appoint yourself, a person, or a business entity as your registered agent or hire registered agent services. At LegalZoom, we offer registered agent services that will receive and manage legal documents on your business' behalf.
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3. File articles of organization
Once you've selected an appropriate business name and appointed a registered agent, you have all the information you need to file the Domestic (NM) Limited Liability Company Formation form with the New Mexico Secretary of State. Although it's referred to as an LLC formation form, other states refer to this as the articles of organization, which establishes your business in the state.
This form will ask you to provide the following information:
- Limited liability company name
- Effective date
- Duration of the LLC, may be perpetual
- Business purpose
- Registered agent’s name, mailing address, and signature to consent to appointment
- LLC’s phone number and email address
- Principal office address and mailing address
- Management structure
- Member or manager names and addresses
- Organizer(s) name, address, email address and phone number
Navigate to the New Mexico Secretary of State portal, make an account, fill out the form, and pay the $50 New Mexico LLC registration fee.
4. Create an operating agreement
New Mexico doesn't require your LLC to submit an operating agreement, but drafting one for your business can help you establish a management structure and set expectations.
When drafting an operating agreement for your LLC in New Mexico, you should address the following:
- Business ownership
- Management roles and responsibilities
- Decision-making and voting rights
- Allocations for profits and losses
- Ownership transition instructions
- Dissolution instructions
You can craft an LLC operating agreement yourself or hire an attorney to help you through the process.
5. Obtain an EIN and open a business bank account
Now that you've officially established your business entity, you can apply for an employer identification number (EIN) through the Internal Revenue Service (IRS). While an EIN is not required for single-member LLCs, it is a requirement for multi-member LLCs because it helps separate their personal assets from their business assets when they go to pay their LLC taxes.
You can submit an online application, send it through the mail, or fax it to the IRS for free.
Once you've obtained your EIN, the next step is to open a business bank account specifically for your LLC because you legally must keep your personal assets separate from your business assets.
You can also get an EIN using LegalZoom’s EIN service. We guarantee accurate filing—fill out a quick questionnaire and we will get back with a confirmed EIN for your business.
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6. Register for state taxes and business licenses
In addition to obtaining an EIN, you must register for a New Mexico Business Tax Identification Number with the New Mexico Taxation and Revenue Department to legally conduct business and report and pay taxes to the state. You can apply online for free.
As for general licensing, New Mexico does not have a basic business license requirement. That said, your LLC in New Mexico may need to obtain city, county, or federal licenses or permits, depending on your business operations. For instance, if you plan to sell taxable goods or services, you must apply for a sales tax permit. Your business may also need a professional license for certain operations, like if you're overseeing construction, offering financial advice, or selling liquor. The filing fees for these licenses and permits vary.
What to do after forming your New Mexico LLC
Once you've submitted the required New Mexico LLC forms and established your small business, you can move on to these additional steps.
Register a domain name
Now, it's time to establish your online presence and prevent other small businesses from using your business name. When your website name is the same as your business name, it's easier for your customers to find your business online and navigate to your homepage. Therefore, you'll want to register for a domain name that matches your LLC name.
This is also a good time to begin making social media accounts associated with your business, such as LinkedIn and Facebook profiles.
Maintain compliance
Unlike other states, New Mexico does not require your LLC to file an annual report or pay an annual fee.
However, ensuring that your LLC in New Mexico remains compliant with other rules and regulations, like those associated with state and federal taxes, is essential. LLCs are subject to pass-through taxation, meaning they don't pay their own corporate income taxes, but each member is still responsible for paying individual income taxes.
Obtain a certificate of good standing
Acquiring a certificate of good standing in New Mexico is not required, but it's a good business practice to follow. A certificate of good standing establishes that your LLC meets state requirements. Visit the New Mexico Secretary of State website to apply online and pay the $25 filing fee.
Consider a foreign LLC
If you're interested in expanding your operations beyond New Mexico state lines, you'll need to apply for a foreign LLC in whichever state you plan to conduct business.
Alternatively, if you already registered your LLC in another state and want to do business in New Mexico, then you need to submit a Foreign Limited Liability Company Application for Registration with New Mexico's Secretary of State and pay the $100 registration fee.
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The cost of forming an LLC in New Mexico
The cost of forming an LLC in New Mexico depends on several factors, such as the kind of business activities your LLC oversees.
Some examples of fees your NM LLC may be responsible for include the following:
- Articles of organization filing fee, $50
- New Mexico LLC name reservation fee, $20
- Certificate of good standing fee, $25
- New Mexico registered agent service fee, varies
- License and permit fees, varies
However, the minimum LLC cost in New Mexico is only $50.
How to start your New Mexico LLC with LegalZoom
From appointing a registered agent to sorting out business licenses, there are a lot of things to keep track of when forming your limited liability company in New Mexico, and LegalZoom can help. We offer small business formation services that help you complete all the required LLC paperwork to ensure your LLC's compliance. We can help you select a compliant name, file articles of organization, draft your operating agreement, apply for an EIN, and more.
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FAQs
How long does it take to form an LLC in New Mexico?
Once you've submitted your articles of organization online through the Secretary of State website, it could take several weeks to process your application. However, you can receive approval in one to three business days if you pay the expedited fees.
What are the annual filing requirements for New Mexico?
Once you've filed your articles of organization and BOIR, there are no other mandatory filing requirements for your LLC in New Mexico. Unlike many other states, NM does not require your LLC to file an annual report or pay an annual fee.
How do I correct filing errors in NM?
You can make changes to your articles of organization by submitting a Limited Liability Company Articles of Amendment with the New Mexico Secretary of State and paying the $50 filing fee.
How do I dissolve a New Mexico LLC?
When you're ready to dissolve your LLC in New Mexico, you can use an online dissolution service or submit a Limited Liability Company Articles of Dissolution with the Secretary of State. There is a $25 filing fee. Once the state has processed your filing, your business name will become available for other small business owners to use.
What are some things I need to consider when forming an LLC in New Mexico?
When forming limited liability companies in New Mexico, LLC owners must select an appropriate business name, choose a registered agent, submit articles of organization, draft an LLC operating agreement, apply for an employer identification number, open a business bank account, and obtain the required licenses and permits. Other tasks involve sorting out New Mexico tax requirements, registering a domain name, and acquiring a certificate of good standing. At LegalZoom, we offer LLC formation services to help ensure you cover all your bases.
Rudri Bhatt Patel contributed to this article.
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