How To Start An LLC In New Mexico 2024?

Limited liability companies^[1] are a popular business structure for forming many businesses in New Mexico state, especially if it’s a small business. A limited liability company (LLC) provides you with personal protection from liability and allows you to save a significant chunk of money on business taxes. This article will discuss how you can form an LLC in New Mexico without employing the services of an attorney.

Unlike in a general partnership or sole proprietorship where the business owners are personally held liable for any legal lawsuits against their business, an LLC is an entirely separate legal business structure that protects the personal assets of the business owners.

Besides liability protection, LLCs offer myriads of other benefits that general partnerships and sole proprietorships don’t offer. These include ease of administration, management flexibility, and multiple tax options.

Read on to find out more about how you can create a limited company in the state of New Mexico.

How To Start An LLC In New Mexico? 

Let’s discuss in detail the steps involved in the business formation process with a government agency.

Choose A Name For Your LLC

When forming a new LLC, the first step is to determine whether the LLC name you intend to use is available. It’s important to conduct a business name search before you decide to register the name of your LLC. The reason why you need to conduct this check is the business name of every LLC needs to be distinguishable from any other New Mexico LLC. You can easily perform a business name search with the New Mexico Secretary of State

If you have a name for your LLC but aren’t ready to form one yet, you can apply with the Application of Registration of LLCs, and have them hold your LLC name for a maximum of 120 days. However, this service costs $20 and it’s remitted to the New Mexico Secretary of State.

When choosing the business name of your LLC, you also want to check whether your domain name is available to match your LLC name and your business website address. You can also do this at the office of the New Mexico Secretary of State.

Choose Your New Mexico Registered Agent Service

Every limited liability company in the state of New Mexico is obligated to have a registered agent. The registered agent acts as your main point of contact and can receive legal notices, subpoenas, summons, tax notices, and more on behalf of your individual or business entity.

To become a registered agent in New Mexico, you must meet the following requirements:

• At least 18 years old, a New Mexico resident or a business registered agent in New Mexico Have a physical address in New Mexico state (PO boxes aren’t accepted)
• Must be available during normal business hours and at the indicated mailing address

If you meet these requirements, you can be your own agent. However, you should keep in mind that the business name and address of the agent are public records; therefore, you’ll have to compromise your privacy. Many entrepreneurs are concerned about their privacy, especially those still employed or working from home.

Luckily, if you choose a professional registered agent such as Northwest, you can significantly reduce the number of unwanted mailings and phone calls you receive.

File Your New Mexico LLC Articles Of Organization

As mentioned earlier, New Mexico Articles of Organization are the legal paperwork required to officially form your New Mexico LLC. If you wish to submit articles of organization and other legal documents, you can do so online by visiting the Corporations and Business Service portal of the New Mexico Secretary of State.

When filing your LLC’s articles of organization, you may encounter multiple confusing terms such as

• Period of Duration. if you want your business to exist for life, which is the option that many LLCs prefer, you should select the “Perpetual” option. However, if you have a pre-determined end date, which is mainly used by investment-oriented businesses, you should indicate how long you intend to run the LLC.
• Effective Date Request. if you’d like your business to begin its operations immediately, then you need to pick today’s date. If you want the company to start operations later, pick a date that is no more than 90 days away. The key reason why people tend to delay the starting date of their LLCs is when the filing process is being conducted at the end of a particular year, and the LLC won’t have much to do until the following year.
• Principal Place of Business. Here, you need to fill in your street address, state, city, and the zip code of your original principal office. This address can either be the physical address of the LLC or the address where its business records are kept.
• Organizer Information. An organizer for an LLC is the person who is in charge of preparing the articles of the organization. The organizer may become a member or not, such as an attorney, an accountant, or a mentor. To fill out this information, click on the “Add Organizer” and fill out the details of the organizer.

Create An LLC Operating Agreement For Your LLC

Once you’ve filed your New Mexico LLC articles of organization, it’s time to prepare your LLC operating agreement.^[2] A New Mexico LLC operating agreement is a formal document that shows the framework of an LLC. An LLC operating agreement covers aspects such as rights of ownership, management structure, distribution of losses and profits, as well as the responsibilities of the members, foreign LLCs, and the like.

The majority of US states don’t obligate LLCs to have operating agreements, but they’re still important to keep.

Obtain An Employer Identification Number 

Also known as the federal tax identification number, the EIN is a unique nine-digit tax identification number that is issued to a business entity by the Internal Revenue Service (IRS).

It is identical to a social security number for individuals as it identifies businesses for tax reasons. The EIN is crucial as it allows your LLC to hire workers, open a business checking account for your LLC, register for permits and licenses, file federal and state taxes, and so much more.

To apply for a New Mexico LLC’s EIN at the IR is free of charge, and the number immediately becomes available when you apply for it online.^[3]

Filing Requirements & Overall New Mexico LLC Filing Fees

To create an LLC in New Mexico, the state law requires that you file your Articles of Organization with the New Mexico Secretary of State. This is a legal document that officially forms your limited liability company in New Mexico. The filing fee for Articles of Organization is $50 and everything can be done online at the New Mexico Secretary of State website. 

The Top 2 LLC Services in New Mexico

Product
Name	ZenBusiness	Northwest Registered Agent
Full review	Read full review	Read full review
Link	Check Price	Check Price

ZenBusiness

ZenBusiness has specialized in offering business formation services. Although it may be a considerably new entrant into the LLC formation service industry, it has surpassed most of its rivals with excellent customer support and low-priced subscription plans. LLC owners can choose from its three plans and start operating their LLC. Every one of these plans is also with the New Mexico annual report service to make sure you don’t miss your filing deadlines.

Once you create your ZenBusiness account, you get exclusive access to some great features that would be hard to find elsewhere, including New Mexico’s taxpayer access point. For instance, there’s an invoicing application a template for operating agreements, and myriads of other impressive features (including a business website) to help you even after you’ve set up your LLC.

What makes Northwest stand out from the rest of its competition includes:

• Highly affordable subscription plans in the business formation industry
• Every plan offers the New Mexico annual report service
• Outstanding customer reviews
• Extended hours of customer support
• Money-back guarantee (60 days)

Northwest Registered Agent

Primarily, Northwest is a reliable registered agent service that also provides business formation services. It mainly concentrates on offering state-of-the-art customer support to its users, and it never sells user data.

The main advantage of Northwest is that it provides a single paid subscription plan, which contains both LLC filing and registered agent service. Any other feature you may need is considered an add-on.

What makes Northwest Registered Agent stand out from the rest of its competition includes:

• Streamlined pricing structure
• The simple and convenient checkout process
• Price Transparency
• Impressive customer reviews
• No pressure upsells

Important Steps After Forming An LLC In New Mexico

You’ve now formed your new LLC, now what? Ready to take a few extra steps. Here are some of the most common ones:

Choose The Form Of Income Taxation For Your New Mexico LLC

New Mexico taxation flexibility is one of the main benefits that a New Mexico LLC offers. When applying for your federal employer identification number (FEIN), you’ll have the option to decide how you’d like your LLC to be taxed. A New Mexico LLC can be classified for tax reasons as either a sole proprietorship, general partnership, S-corporation, or C-corporation.

The difference between being taxed as a sole proprietorship (single-member LLC) or general partnership (multi-member LLC) and being taxed as a corporation is that the losses and profits are passed to the federal income tax of the members depending on their ownership percentages.

Therefore, small business owners will need to pay self-employment taxes on all their profits. Alternatively, when your New Mexico LLC is taxed as a corporation, the members can opt to take a reasonable salary and pay payroll taxes. The remainder of the profits are not subjected to payroll taxes; therefore, they are distributed among the members which significantly saves on taxes. 

Open A Business Checking Account For Your LLC & Obtain A Business Credit Card

It’s important to open a business bank account for your business as the bank account separates business funds from the personal funds of the members, and also gives you access to business debts. To open a business bank account, you need to avail of the following LLC documents:

• A banking resolution – is a document to authorizes LLC members to open a bank account on behalf of the entity
• Driver’s licenses of all the members
• Copies of the New Mexico LLC documents to prove the LLC formation
• In the state of New Mexico, you have to show a New Mexico certificate of good standing to prove that your LLC is in great standing with the New Mexico state.

Obtain Business Insurance

Even if an LLC provides you with personal liability protection, it’s important to obtain business insurance to protect the LLC. The major types of insurance comprise

• General liability insurance. This type of insurance covers any damages and medical expenses for any accident that could occur at the business premises.
• Business vehicle insurance. This insurance covers all LLC vehicles and could also cover personal cars that are used for LLC-related activities.
• Business property insurance. This insurance replaces stolen, damaged, or lost business property. It covers the business location itself, business equipment, supplies, and any other things used to run the business.
• Workers compensation insurance. This type of insurance is mostly mandated by many US states if you have workers. The insurance takes care of any medical expenses that happen to employees at the workplace due to accidents or injuries.

Obtain Business Licenses And Permits

Depending on what your LLC does and its location, you may need to have several business licenses before you can start running the business. Some of the most notable ones include:

• Business license – it’s required by many states before you can operate the LLC
• Combined Reporting System (CRS) Number – Every business in the state of New Mexico is required to register with the New Mexico Taxation and Revenue Department or your local tax office
• Professional license – a specific professional service such as accountants, barbershops, salons, and the like requires this license to operate

Final Thoughts

New Mexico is now standing as the 9th state in the country in terms of labor cost which makes it an attractive destination for many ambitious entrepreneurs. To form your limited liability company in this state, follow this guide and your business formation process could be smoother than you anticipated.

You can choose whether to form your LLC by yourself in New Mexico, but it could take more time and effort from your side. However, you can delegate the business formation activities to renowned business formation services such as Northwest and ZenBusiness. These online services are specialized in forming businesses, which means that it’ll take significantly less time and less amount of money to form a business of your liking.

Frequently Asked Questions (FAQs)