LLC in New Mexico

When embarking on a new business venture, selecting the appropriate business structure is a crucial decision for founders. For companies with multiple founding members, forming as an LLC is often the most favorable choice for various reasons.

LLCs offer a straightforward business structure that provides legal protection by separating personal assets from business debts. Additionally, LLCs often have lower tax rates compared to corporations. However, forming an LLC can be complicated depending on the state, with variations in the formation process, filing fees, and legal requirements.

Fortunately, forming an LLC in New Mexico follows a standard process and is less cumbersome, as LLCs in the state are not required to file annual reports or pay the associated fees, unlike in most other states. To avoid errors during the filing process, follow the steps outlined below to start an LLC in New Mexico.

To name your LLC in New Mexico, it is important to follow the two main guidelines:

1. The name must be different from the names of existing businesses registered with the New Mexico Secretary of State.
2. The name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “LLC”, “L.L.C.”, “L.C.”, or “LC.” You may use the abbreviations “Ltd.” and “Co.” instead of “Limited” and “Company”, respectively.

To ensure that your chosen name is available, you can perform a search with the New Mexico Secretary of State Business Search.

It is recommended to reserve your LLC name with the Secretary of State to prevent another business from using it before you file your Articles of Organization.

To operate an LLC in New Mexico, a Registered Agent is mandatory to receive official legal and tax correspondence and to file reports with the Secretary of State (SOS). You may select yourself, a manager from your company, or use a specialized Registered Agent service to fulfill this requirement.

In case of an individual being the Registered Agent, they must have a physical address in New Mexico and be available during business hours to receive critical documents for your business.

When forming your LLC in New Mexico by filing your Certificate of Formation, you must appoint your Registered Agent formally.

To form an LLC in New Mexico, the New Mexico Secretary of State requires the filing of Articles of Organization.

The filing process can be done online through the Secretary of State's website, and a filing fee of $50 must be paid with a credit card.

The Articles of Organization should include the LLC's name, address, email address, and phone number (optional), the name and address of the registered agent, the effective date of the Articles, the LLC's duration (if not perpetual), the LLC's business purpose, and whether the LLC is member-managed, manager-managed, or has a single member.

The name and contact information of the LLC organizer must also be provided.

Foreign LLC Formation

For foreign LLCs that want to do business in New Mexico, the LLC must comply with New Mexico naming guidelines and confirm name availability through the Secretary of State Business Search.

The LLC must appoint a New Mexico registered agent and file a Foreign Limited Liability Company Application for Registration with the New Mexico Secretary of State, which can only be done through mail.

The filing fee is $100, and the certificate must be accompanied by a Certificate of Good Standing or a Certificate of Existence from the LLC's state of origin.

An Operating Agreement can be a valuable tool for any LLC formed in the state of New Mexico. Although it is not a legal requirement, having an Operating Agreement in place can help avoid conflicts and give you more control over your business. Without one, your LLC will be subject to default rules set out in New Mexico law.

If these rules are not suitable for your business, an Operating Agreement can be used to modify them to better meet your needs.

Some benefits of having an Operating Agreement for your New Mexico LLC include:

• Providing a framework for easier dispute resolution
• Allowing for customized procedures for transferring ownership
• Giving you the ability to determine how profits and losses are shared
• Outlining specific criteria for dissolving the business
• Establishing standards for member and manager rights and obligations

By taking the time to draft an Operating Agreement, you can ensure that your business is set up to operate in a way that aligns with your vision and goals.

Every newly formed LLC in the United States, except for single-member LLCs, must obtain an Employer Identification Number (EIN) from the Internal Revenue Service.

The EIN, which is a unique nine-digit number, serves as a business's social security number and is required for a variety of important tasks, including paying income tax, filing tax returns, and opening business bank accounts.

Fortunately, you can easily apply for an EIN online through the IRS website without having to pay any filing fees.

After registering an LLC, it is important for members to comply with ongoing legal requirements throughout the existence of the company. The following steps must be taken:

Register with the New Mexico Taxation and Revenue Department

All LLCs operating in New Mexico, even those formed outside of the state, must register with the New Mexico Taxation and Revenue Department to obtain a Combined Reporting System identification number.

To register, you can either use New Mexico’s Taxpayer Access Point (TAP) online or submit a paper copy of Form ACD-31015 to a local tax office.

File a New Mexico Income and Information Return for Pass-Through Entities form (Multi-member LLCs only)

Multi-member LLCs in New Mexico are required to file an Income and Information Return for Pass-Through Entities form prior to the federal tax return due date.

Non-resident LLC members' net income should be withheld and deducted when filing the form. Single-member LLCs are considered sole proprietorships for tax purposes and are therefore exempt from filing this form. Visit the New Mexico Taxation and Revenue website for instructions on filing the PTE form.

Obtain business licenses and permits

Certain types of New Mexico LLCs may need to obtain one or more state or local business licenses, permits, or certifications based on their location and the nature of their business.

The State of New Mexico Business Portal: Obtain Licenses and Permits page can provide guidance on obtaining the necessary licenses and permits. The website also includes a section dedicated to helping businesses meet local and municipal licensing requirements.