Key Takeaways

  • A New Mexico LLC is cost-effective to form, with only a $50 filing fee and no annual reporting requirement.
  • A New Mexico operating agreement outlines ownership, management structure, voting rights, profit distribution, and dissolution procedures for the LLC.
  • While not legally required, an operating agreement is highly recommended to protect limited liability status and prevent member disputes.
  • The document can be tailored for single-member or multi-member LLCs, covering decision-making authority, capital contributions, and rules for admitting new members.
  • Foreign LLCs must register with the state and maintain a registered agent in New Mexico before conducting business.

An LLC NM is a limited liability company formed in New Mexico. LLCs are easy to form and cost-effective for new business owners. In New Mexico, LLCs are run by Chapter 53, Article 19 in the State Code. A New Mexico LLC must meet certain requirements to do business legally and to offer its members limited liability to protect their assets.

Important facts about NM LLCs include the following:

  • An LLC can be formed for only $50.
  • Annual reports aren't required.
  • LLC formation isn't difficult.

LLC Advantages in New Mexico

  • Single filing. The LLC only needs to be formed once in NM.
  • Low-cost. Forming an LLC in NM only takes $50 plus no annual fees.
  • Simple. NM LLCs are the easiest to maintain.
  • Protected assets. NM's limited liability laws offer the best protection to an LLC's members.

Forming an LLC in New Mexico

Follow these steps to form an LLC in New Mexico:

  1. Name your LLC.
  2. File Articles of Organization
  3. Assign a registered agent.
  4. Create an operating agreement.
  5. Meet tax and license requirements.

Naming Your LLC

The end of your business's name must have one of the following: “Limited Liability Company,” “LLC," “Limited Company,” or “LC.” You will also be able to abbreviate “Limited” to “Ltd.” and “Company” to “Co.” To use restricted words, more paperwork must be filed. A prohibited word may confuse your LLC with a state or federal agency.

The Secretary of State's database can be used to find registered names. Also consider buying the domain name to stop someone else from getting it. An email address made with a system like Google G Suite allows you to use business features and tools for creating documents.

You can file a Reservation of Limited Liability Company Name with the state secretary to protect the name for 120 days. This must filed by mail with a $20 fee.

Filing Articles of Organization

NM requires an Articles of Organization to be filed, either online or by mail. The form requires various pieces of information on the business. A Statement of Acceptance of Appointment by Designated Registered Agent must be signed by a registered agent. You can mail all these forms to the Public Regulation Commission of NM with a $50 fee.

Assigning a Registered Agent

An agent for service of process, also known as a registered agent, is required for every NM LLC.

  • This agent is a person or business that can send and receive any legal papers for the LLC.
  • Your agent must be a NM resident or, alternatively, a company registered with the state, including a member of the LLC.

Creating an Operating Agreement

Although not required by NM, if your LLC has more than one member, an operating agreement for your LLC can be made. It's a legal document that states who owns the LLC and how it's run. You do not need to file this document with your Articles of Organization.

Key Provisions to Include in a New Mexico Operating Agreement

A comprehensive New Mexico operating agreement should address the LLC’s internal governance and clearly outline the rights and responsibilities of its members or managers. Common provisions include:

  • Ownership Structure: Specify the percentage of ownership for each member, based on capital contributions or other factors.
  • Management and Voting: Clarify whether the LLC is member-managed or manager-managed, the scope of each role’s authority, and how voting rights are allocated.
  • Capital Contributions: Define the initial contributions of each member and the process for future contributions.
  • Profit and Loss Distribution: Establish how profits and losses are divided among members, which may differ from ownership percentages if agreed upon.
  • Meetings and Decision-Making: Outline procedures for regular and special meetings, quorum requirements, and voting thresholds for major decisions.
  • Transfer of Interests: Set rules for selling or transferring ownership interests, including any buy-sell provisions.
  • Dissolution and Winding Up: Detail how the LLC will be dissolved and assets distributed.
  • Amendment Procedures: State how the operating agreement can be modified in the future.

While the state does not require filing the operating agreement with the Articles of Organization, keeping it in your records provides legal clarity and helps preserve limited liability status.

Required Taxes and Regulations 

  • EIN: An LLC with more than one member must get an EIN (Employer Identification Number) from the IRS. This identifies the business like a social security number and is used for filing state and federal taxes. If your LLC has one member, an EIN is required to hire employees or to open a business checking account. The IRS can give the LLC one for free through an online application, or the LLC can mail in a completed physical form.
  • Business Licenses: NM may require you to get a license, certificate, or registration.
  • Registration for State Taxes: Any entity doing business in the state needs to register with the NM Taxation and Revenue Department to get an ID number for the state's CRS (Combined Reporting System). This can be done online or by filing an ACD-31015 form with a local tax office. More information is found on the department's website.
  • State Taxes: The New Mexico Income and Information Return for Pass-Through Entities must be filled out by LLCs with two or more members. You must file before your federal tax return is due.

Single-Member vs. Multi-Member Operating Agreements

New Mexico LLC operating agreements can be tailored based on whether your company has one member or multiple members:

  • Single-Member LLCs: The agreement should still define the business’s operational framework, including decision-making authority, capital contributions, and succession planning in case of incapacity or death.
  • Multi-Member LLCs: The agreement should be more detailed, covering dispute resolution processes, voting procedures, and rules for admitting or removing members.

Having a tailored agreement for your LLC type ensures smoother operations and minimizes potential legal disputes.

Foreign LLCs

All LLCs that are registered in another state but desire to conduct business in NM must register. You must have a registered agent who lives in NM. A Foreign Limited Liability Company Application for Registration can be filed by mail. More information can be found on the NM state secretary website.

Frequently Asked Questions

1. Is a New Mexico operating agreement required by law?

No, New Mexico does not legally require an LLC to have an operating agreement, but it is strongly recommended for clarity and liability protection.

2. Can I use a template for my New Mexico operating agreement?

Yes, templates can be useful, but you should customize them to reflect your LLC’s specific ownership, management, and operational needs.

3. Do single-member LLCs in New Mexico need an operating agreement?

Yes, even single-member LLCs benefit from having one to reinforce limited liability status and outline succession or transfer plans.

4. Can an operating agreement be changed after the LLC is formed?

Yes, members can amend the operating agreement at any time following the procedures set forth in the document.

5. Should the operating agreement be filed with the state?

No, the operating agreement is an internal document and does not need to be filed with the New Mexico Secretary of State.

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