Thinking for starting an LLC in New Mexico?
New Mexico’s low LLC formation costs and moderate compliance requirements make it an attractive destination for startups, small businesses, and mid-market companies alike.
In this guide, we break down the main steps to creating an LLC in New Mexico and explain all the legal procedures in plain language.
Step 1: Name your new LLC
Choosing your business name is the first, and arguably the most important step in company incorporation.Your legal name has to communicate the purpose of the business and be unique from other registered ones.
New Mexico has specific business name requirements for LLCs:
- Include one of the following abbreviations: LLC, L.L.C., LC, L.C., “limited liability company” or “limited company.”
- The name “limited” can be abbreviated as “ltd,” and the word “company” can be abbreviated as “co.”
- The name needs to be distinguishable from the name of another LLC, partnership, or corporation, registered in New Mexico.
To check whether your business name is available, use the New Mexico Business Name Search tool. If no results pop up, you are free to use your selection.
If you came up with a company name, but are not ready to follow through with your LLC formation in New Mexico yet, the state allows you to reserve a business name for up to 120 days. You can reserve your LLC name:
- On the State of New Mexico Corporations and Business Services Website
- By completing a paper application 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 name reservation in New Mexico is $20.
LLCs can operate under a brand name, different from their legal one.
Such a name is called “doing business as” (DBA) name, assumed name, or fictitious name. You can use a DBA name for marketing purposes to distinguish different product lines or business branches. Unlike other states, New Mexico laws don’t recognize the “DBA” or “Trade Name” concept. Meaning entrepreneurs can’t obtain a DBA in this state.
But you have an alternative means — file 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 + $25 for each extra class.
Step 2: Choose 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 business, as well as service of process.
New Mexico requires the registered agent to be either:
- An individual resident of New Mexico with a physical address in the state (not a PO box).
- A domestic corporation, LLC, or a partnership that has the same place of business as the office registered for the business.
- A foreign corporation, foreign LLC, or foreign partnership that has the same place of business as the office registered for the business.
If you’re based in New Mexico, the easiest thing is to be your own registered agent.
But you will then need to list your address as part of the LLC filings (in Step 3 below). It will be recorded with the state and will become a public record. That can breach your privacy.
Also, as a registered agent, you must be available at the said address during standard business hours to accept the service of process. If you miss a delivery, there can be serious legal consequences.
Because of the above, many business owners choose to use a commercial registered agent service in New Mexico instead.
Step 3: Draft and submit the New Mexico LLC articles of organization
“Articles of Organization” is the centerpiece document for establishing your New Mexico LLC.
The New Mexico Secretary of State insists on online filings via the E-file portal.
It’ll take you to the application page where you’ll need to provide the following information:
- Company name
- Purpose and proposed duration
- The physical address of your new business
- Organizer Information
- Registered Agent name and contact information
New Mexico charges a $50 one-time filing fee for approving your LLC documents.
A significant advantage of incorporating in New Mexico is that you don’t have to list all LLC members' names and personal details on the company documents. It gives you greater privacy.
After your LLC registration has been filed and approved, you should order a Certificate of LLC Registration with the State of New Mexico. To do so, create an account via the state’s business system. New Mexico will charge you $1 per page and an additional $25 fee for Certified Copies.
Step 4: Create an LLC operating agreement
New Mexico does not legally obligate LLCs to have an operating agreement. But it’s an important document to conclude if you run a joint business venture with partners.
An LLC operating agreement:
- Outlines the business structure — key management people, member’s rights, capital contributions, etc.
- Establishes how the business will operate — decision-making power’s allocation, voting procedures, day-to-day management.
- States how funds will be distributed — lists profit allocations, owners’ draws, salary payments, etc.
With an operating agreement, you protect your operations from internal disputes and misunderstandings between members.
It’s cheaper to pay upfront to a lawyer or use a premium operating agreement template than to foot a larger attorney bill if the matters go to court.
Step 5: Get an EIN (Employer Identification Number) from the IRS
Once you’re done with the state formalities, move on to the federal ones.
If you plan to run a multi-member LLC or hire employees anytime soon, you must get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).
An EIN is like a social security number for your business. The IRS uses it to process members’ personal income tax returns and employment tax withholding. If you are a multi-member LLC, applying for an EIN is mandatory. If you are a single-member LLC, an EIN is optional.
Costs to set up an LLC in New Mexico
New Mexico is a cost-effective place to start a business. The standard fee to create an LLC in New Mexico is $50. Additional fees that a business owner might encounter are name reservation ($20), filing for a trademarked name ($50), and hiring a third-party commercial registered agent ($100/yr),. New Mexico does not impose an annual filing fee, which is a cost differentiator compared to most other states.
After registering your LLC, creating your operating agreement, and filing for an EIN, you should complete a few additional steps. The first is your LLC needs a dedicated business bank account. Using a separate bank account is important because it helps reinforce your LLC protections — bounded personal liability and greater personal asset protection. This action shows that your business is separate from its members and that there is no business and personal funds commingling.
Additionally, you must also apply for a New Mexico CRS Tax ID number.
You need this state tax ID to collect and pay: Gross receipts tax, State employment taxes, and other New Mexico business taxes.
The application process is quick and easy. Follow the steps on the state’s Business Portal Page.
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