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How to Form an LLC in New Mexico

Follow these steps to register an LLC in New Mexico

Written by Tyler Davis – CPA, updated on

Limited liability company (LLC) formation is a solid next step for growth-oriented business owners.

New Mexico’s low company 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.


7 steps to open an LLC in New Mexico

  1. Step 1: Choose a business name for your New Mexico LLC
  2. Step 2: Designate a New Mexico registered agent
  3. Step 3: File the New Mexico LLC articles of organization
  4. Step 4: Obtain an Employer Identification Number from the IRS
  5. Step 5: Register with the New Mexico Taxation and Revenue Department
  6. Step 6: Prepare an LLC operating agreement
  7. Step 7: Open a New Mexico business bank account

Step 1: Choose a business name for your New Mexico 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.

Name reservations

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:

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.

Trade name

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: 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 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: File 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
File the New Mexico LLC articles of organization
Source: New Mexico Business Application Portal.

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.

Step 4: Obtain 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.

You can get EIN online via the IRS website or mail a paper application (Form SS-4). Both options are free.

Apply online to get your EIN issued within minutes!

Obtain an EIN (Employer Identification Number) from the IRS
Source: Apply for an Employer Identification Number (EIN) Online.

Step 5: Register with the New Mexico Taxation and Revenue Department

All New Mexico LLC owners with an EIN 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
  • Other New Mexico business taxes

The application process is quick and easy provided you have the following information:

  • Federal EIN
  • Business Registration number from the New Mexico Secretary of State

To complete the application, follow the steps on the state’s Business Portal Page.

Local LLCs registered to do business in New Mexico must file a New Mexico Income Tax Return.

The state filing requirements differ depending on your LLC tax classification — sole proprietorship, partnership, S-corporation, or C-corporation.

When filing any state taxes for New Mexico, use your New Mexico CRS Tax ID number. You can complete the filings online.

Step 6: Prepare 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 7: Open a New Mexico business bank account

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.

Consider a bank’s number of branches in your area, their fees, and the requirements for opening an account before choosing one.

Most national banks have a presence in New Mexico. Also, several trusted regional players such as Bank of Albuquerque, Bank of the West, New Mexico Bank & Trust, and Western Commerce Bank.

New Mexico LLC taxes, costs, and fees

One of the major benefits of forming an LLC in New Mexico is the low costs and fees.

Unlike many other states, there is no annual report filing requirement or annual LLC fees in New Mexico.

State taxes

LLCs in New Mexico will not directly be liable for state income taxes.

If your LLC is seen as a “disregarded entity” for federal tax purposes, the tax liability itself falls on the individual members of the LLC.

But you must file a “Pass-Through Entity” informational tax return each year to New Mexico tax authorities.

New Mexico does not charge an annual franchise tax fee for LLCs taxed as partnerships or sole proprietorships.

But if your business entity is taxed as an S-Corp or C-Corp, you’ll be responsible for a franchise tax. The minimal annual franchise tax is $50, and it’s progressive.

Also, New Mexico applies corporate income taxes to C-corporation. The rate varies from 4.8% to 5.9%, depending on income.

Unlike many states, New Mexico does not have a sales tax. Instead, the state has a gross receipts test. For every dollar of receipts, the gross receipt tax charged varies from 5.125% to 8.8675%, depending on where the business is located.

The state imposes several other taxes which your LLC may or may not be required to pay, including withholding taxes, compensating tax, worker’s compensation, and mineral/oil/gas extraction taxes.

For a complete list, refer to the official business tax guide.

New Mexico business permits and licenses

New Mexico itself does require LLCs to get a general license.

However, if your business is in a regulated industry, you must have a professional license.

For example, your employees will need a CPA license if you run an accounting firm.

Other examples of business licenses in NM are liquor licenses, construction licenses, environmental licenses, and other professional certifications.

For further guidance, refer to the New Mexico State License and Permit page.

Pros and cons of forming an LLC in New Mexico

Forming a business in The Land of Enchantment has many perks and very few negatives.

New Mexico LLC pros

  • No annual report filing requirement and annual fees
  • Low business formation costs
  • No disclosure requirement of LLC members
  • No general business license

New Mexico LLC cons

  • High state corporate income tax rate
  • Required annual informational tax return filing

Related: LLC Pros and Cons Explained

New Mexico LLC FAQs

Below are some of the most frequently asked questions (FAQs) about forming an LLC in New Mexico.

Tyler Davis

Article by:

Tyler Davis

CPA

Tyler Davis is a CPA and real estate professional. Tyler enjoys working on the tax implications of real estate transactions, evaluating development and investing opportunities, and writing on current tax events. He worked for PwC in tax for five years where he advised on the tax implications of M&A transactions and provided tax provision support for Life and P&C Insurance companies. In his free time, Tyler is an avid golfer.

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