Thinking of starting an LLC in New Mexico? Wise choice.
New Mexico’s low LLC formation costs and simple compliance requirements make it an attractive location. Startups, small businesses, and mid-market companies can get up and running right away.
Forming an LLC in New Mexico also means that people will take your business seriously. You can attract investors much easier too. And LLCs offer important personal liability protection.
In this guide, we break down the main steps to creating an LLC in New Mexico in plain language.
Table of Contents
- Step 1: Name your new LLC
- Step 2: Designate a registered agent
- Step 3: Draft and submit the New Mexico LLC articles of organization
- Step 4: Create an LLC operating agreement
- Step 5: Get an EIN (Employer Identification Number) from the IRS
- Costs to set up an LLC in New Mexico
- Last steps
Step 1: Name your new LLC
Choosing your business name is the first, and arguably the most important step in forming your New Mexico.
New Mexico has specific business name requirements. Each LLC name needs to:
- Include Limited Liability Company, Limited Company, or a similar abbreviation
- Be unique and different from other New Mexico businesses
To check whether your business name is available, use the New Mexico Business Name Search tool. Avoid names that people might confuse with an existing business. You want to stand out from the crowd and avoid legal problems.
Name reservations
If you have a company name but aren’t ready to complete your LLC formation in New Mexico yet, you can reserve a business name.
To secure your LLC name for up to 120 days, apply:
- On the New Mexico Corporations and Business Services Website
- By completing a paper form and sending it by mail
The mailing address is:
New Mexico Secretary of State Office
325 Don Gaspar, Suite 300
Santa Fe, New Mexico 87501
The cost of a New Mexico name reservation is $20.
Trade name
LLCs can usually operate under brand names different from their legal ones.
Such a name is called a doing-business-as (DBA) name, assumed name, or fictitious name. Many businesses use a DBA name for marketing purposes to distinguish different product lines or business branches.
New Mexico laws don’t recognize the DBA concept. That means this isn’t an easy route to go like it is in other states.
Some people get around this limitation by filing for a trademark or service mark registration. You can do this for any available brand name, provided it meets the state’s requirements.
Trademark name costs start at $50 for one class plus $25 for each extra class.
Step 2: Designate a registered agent
New Mexico requires all LLCs to have a registered agent in the state. A registered agent agrees to accept tax notices, legal documents, and general correspondence for the LLC.
New Mexico requires the registered agent to be either:
- An individual resident of New Mexico with a physical address in the state (not a P.O. Box)
- A domestic corporation, LLC, or a partnership
- A foreign corporation, foreign LLC, or foreign partnership
To use any entity as a New Mexico registered agent, it must use the registered office as its place of business.
The cheapest thing is to be your own registered agent. It’s free. But there are several concerns about doing so. You must list your address in the public record. That reduces privacy and increases junk mail. Also, registered agents must be available during standard business hours. There can be serious legal consequences to missing a service of process delivery.
Because of these issues, many business owners choose to hire a registered agent service in New Mexico instead. Costs vary but are around $50 to $200 per year.
Step 3: Draft and submit the New Mexico LLC articles of organization
When you’re ready to form a New Mexico LLC, this step is one to highlight. Filing the articles of organization establishes your New Mexico LLC. Your business idea turns into a real entity.
The New Mexico Secretary of State offers the E-file portal to make the process easy. To file your articles of organization, you’ll provide:
- Company name and physical address
- Purpose and proposed duration
- Organizer Information
- Registered agent name and contact information
New Mexico charges $50 to approve your LLC documents.
You don’t have to list all New Mexico LLC members’ personal details on the company documents. It gives you more privacy compared to some other states.
After the New Mexico SOS approves your LLC, order a Certificate of LLC Registration. Create an account on the state’s business system to request one. New Mexico charges a $25 fee for Certified Copies plus $1 per page.
Step 4: Create an LLC operating agreement
New Mexico does not require LLCs to have an operating agreement. But it’s an important document that you should have anyway. It is vital to run a joint venture with partners. And it helps protect your interests and validate your business.
An LLC operating agreement outlines things like:
- Ownership and management — key people, rights, duties, capital contributions
- How the LLC operates — decision-making power, voting procedures, day-to-day management
- How funds will be distributed — lists profit allocations, owners’ draws, salary payments
- Other important details – adding/removing owners, how to dissolve the LLC, ways to handle disputes
With an operating agreement, you prevent misunderstandings between members. It lays out many details to create predictability and provide certainty.
You can use an online operating agreement template or pay a lawyer to draft one.
Step 5: Get an EIN (Employer Identification Number) from the IRS
If you have a multi-member LLC, hire employees, or use certain retirement plans, you need to get an Employer Identification Number (EIN).
The Internal Revenue Service (IRS) issues EINs to track tax information such as income and employment withholding. It’s like a Social Security number for your business.
Some single-member LLCs can use the owner’s Social Security number. But an EIN can be necessary for opening a bank account, some state taxes, or certain lending opportunities.
Head to the IRS website to get an EIN in minutes. Or mail in a paper application (Form SS-4). Both options are free.
Costs to set up an LLC in New Mexico
The costs to start an LLC in New Mexico are remarkably low. The standard fee for filing the articles of organization is $50. Plan on spending another $25 to get a Certificate of LLC Registration. For $75, you can start a New Mexico LLC.
Extra fees that a New Mexico LLC startup faces may also include:
- $20 to reserve a name
- $50 to file a trademarked name
- $50 to $200 per year to hire a registered agent
- $1,000 or more for an attorney-drafted operating agreement
New Mexico does not impose an annual filing fee, which is a major savings compared to most other states.
Last Steps
The finish line is in sight. But don’t let up steam quite yet. Complete these few last parts to make sure your New Mexico LLC is ready for business.
Business bank account
You might be tempted to mix personal and business finances. But this can lead to serious problems. Your LLC needs a dedicated business bank account.
If you don’t separate your business finances, courts can use that as evidence your LLC isn’t a separate entity. This could result in your personal assets being at risk during a lawsuit.
Local tax, licenses, and permits
Every New Mexico LLC must apply for a New Mexico CRS Tax ID number. You’ll need this for all New Mexico business taxes. The Business Portal application process is quick and easy.
Some LLCs also need to get licenses or permits. Liquor sales, construction, and finance professionals are common examples.
This New Mexico license and permits page can help you tackle your state needs. Once done there, check with your local municipality. If you have questions, contact the agency to get pointed in the right direction.
Other considerations
Speaking with a qualified insurance agent is a great idea. A workers’ compensation policy and general liability coverage can be vital.
Owning a business can feel like you’re on a deserted island, alone without help. But it doesn’t have to be that way. Get no-cost counseling and training from the New Mexico SBDC. And don’t overlook all of the amazing financing opportunities and business networks.
You’re a few steps away from creating a New Mexico LLC. The first thing is to grab your favorite name and see if it’s unique on the New Mexico business search. Then follow this guide to starting an LLC in New Mexico like a treasure map to your dreams.
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Last updated: Apr 2024