New Mexico LLC: Everything You Need to Know
Forming a New Mexico LLC, or limited liability company, will require you to engage with the processes and procedures listed below.9 min read
Establishing a New Mexico LLC
Forming a New Mexico LLC, or limited liability company, will require you to engage with the processes and procedures listed below. Be aware that these guidelines are for New Mexico LLC’s only and can vary from state to state.
Choose a Name for Your LLC
When operating an LLC in New Mexico, you must choose a name that includes the following words or abbreviations
- Limited Liability Company
- Limited Company
The words “Limited,” and “Company” can also be abbreviated to Ltd. or Co., respectively.
Your name needs to be unique, so once you’ve selected a title, register for an account with the New Mexico Secretary of State and search their business name database to make sure it isn’t taken. If it’s free for taking, reserve your name by filing a Reservation of Limited Liability Company Name with the New Mexico Secretary of State application. The application, which you must send by mail with a $20 fee, will allow you to hold onto your name for 120 days.
Appoint a Registered Agent
As in most states, New Mexico requires all LLCs to have a Registered Agent. Your Registered Agent will be in charge of all of your LLC’s legal matters, and will be the person, or company, that sends and receives all legal documents concerning your LLC, including lawsuits and state filings.
If you want to choose a single person as your Registered Agent, that person can be yourself or one of the individual owners of your company as long as you or they are a New Mexico resident with proof of a New Mexico street address. You can also find a business or agency with the authorization to do business in New Mexico to handle all Registered Agent duties. You cannot, however, have your LLC itself be the Registered Agent.
Once you’ve selected a name, it’s time to start your New Mexico LLC. Your first step will be filing Articles of Organization with the New Mexico Secretary of State. These articles will require you to fill out the following information about your LLC:
- Name and address
- Your Registered Agent’s name and address
- Any possible dissolution date
- Whether your LLC is manager-run; or
- Has one member.
Send these articles, along with a Statement of Acceptance of Appointment by Designated Registered Agent (signed by the Registered Agent you’ve chosen), by mail along with a $50 filing fee.
Prepare an Operating Agreement
You may not need an Operating Agreement in the state of New Mexico, but it’s worth noting that having a record of members’ rights and obligations will be helpful in the long run. You can file an Operating Agreement separately from the Articles of Organization.
Comply With Other Tax and Regulatory Requirements
You should be aware of what other taxes and requirements you may be legally obligated to file, including:
Even if you have zero employees, your LLC will need an IRS Employer Identification Number, or EIN, if it has more than one member in its ranks. You can find and complete the necessary EIN paperwork, at no charge, on the IRS website. No EIN is required for an LLC that has only one member and no employees, unless that LLC chooses to be taxed as a corporation.
Different businesses demand different business licenses, certifications or registrations depending on what state they plan on operating in. See what licenses you will need, on a Federal or State or Local level, in order to operate your LLC in New Mexico.
- Federal: Any federal business licenses, certifications and registrations required by your business can be found by searching the U.S. Small Business Administration (SBA) guide.
- State: For searching and completing statewide license, certification or registration requirements that may affect your business, consult with The State of New Mexico's Regulation & Licensing Department.
- Local: Your local Chamber of Commerce should have all the information you need when it comes to local licenses, certifications and registrations. Fees will differ depending on the nature of your business.
State Tax Registration
The state of New Mexico lets LLC’s get their CRS Identification Number by applying online. If you prefer to do things in person, head to any local tax office and submit an ACD-31015, Application for Business Tax Identification Number. You can find and print the form from the New Mexico Taxation & Revenue website.
If you are a pass-through entity in New Mexico, like a multi-member LLC, you will need to file a New Mexico Income and Information Return for Pass-Through Entities (PTE). A pass-through entity is, simply, a company where the owners are subject to business related taxes individually and aren’t required to file income taxes for the entire LLC. One-member LLC’s are not pass-through entities, and are considered sole proprietorships for tax reasons.
The due date for filing the New Mexico Income and Information Return for Pass-Through Entities is the same as the one for filing your federal tax returns. It’s best to file the forms in tandem, withholding and deducting taxes from the shares of non-resident co-owners in the LLC. You can find out more about state tax requirements on the New Mexico Taxation & Revenue website.
While many states require the filing of annual reports from LLCs, New Mexico does not.
Separate Personal Assets from the LLC
When separating personal assets from your LLC is a priority, there are some steps worth taking in the early going of your business. Making the following choices will put you ahead of the game when it comes to organizing your finances.
- Open a business bank account: By taking this crucial step, you’ve created a place for storing your business assets that will keep them from mingling with your personal assets in a confusing way. This will also simplify the accounting and tax filing processes, especially in the long term.
- Get a business credit card: If you’re separating your business assets and personal assets, why not do the same for your expenses. This can save you a headache down the road when it comes to tracking payments, and can build your LLC’s credit—something you’ll want if you plan on fundraising and growing your company.
Start an LLC, or any type of business, in New Mexico, and you’ll most likely need the following types of insurance to protect you, your employees, and your customers.
- Workers Compensation Insurance: Protects your employees and owners from any sudden illness or injury.
- General Liability Insurance: Protects you from any damage inflicted by either your business or your employees, while covering you for third party personal injuries and property damage on your work site.
Rates on both types of insurance will vary depending on the size and nature of your LLC.
Employee Hiring Compliance
To be compliant with standard New Mexico LLC hiring practices, you must:
- Be certain your employees can legally work in the US.
- Report each employee to the State as a new hire.
- Offer employees Workers Compensation Insurance.
- Withhold income taxes.
- Have posters displaying company rules in clear view for employees.
- Pay your employees in state-mandated installments.
- Consult the New Mexico Department of Workforce Solutions if you have any doubts about compliance guidelines.
Foreign LLC in New Mexico
Thinking of taking your already existing LLC to New Mexico for an exciting new business opportunity? In order to register with the state, you’ll need to:
- As in forming any LLC in New Mexico, find a Registered Agent that either resides or is authorized to operate in New Mexico.
- File a Foreign Limited Liability Company Application for Registration, which can be found on the New Mexico Secretary of State website.
- Send in the application with a $100 fee, by mail only.
- A Certificate of Good Standing, Certificate of Authorization, or similar state-issued document from the LLC’s state of origin should be attached to the application as proof that the LLC followed all of that state’s business requirements.
Protections and Benefits When Forming a New Mexico LLC
When forming an LLC in New Mexico, you’ll be pleased to learn about all of the protections and benefits allowed to you by the state.
- An affordable $50 fee for forming an LLC in the state.
- At this time, LLC’s do not need to file annual reports with the state.
- New Mexico LLC paperwork is easy to fill out, making the journey to forming your LLC that much faster.
- Requirements are standard and simple for LLCs, including LLC naming requirements, the need for a principal office, and the appointment of an organizer and Registered Agent.
Special Benefits include:
- One-time filings: Simply form your LLC in New Mexico, file your Articles of Organization, and never worry again about follow-up paperwork and annual reports.
- Inexpensive: Some states force small business owners to pay up with steep formation fees and pesky annual fees. With only a $50 formation fee, New Mexico is not one of those states.
- Simplicity: Along with fewer fees, you’ll find fewer obligations go along with forming an LLC in New Mexico. Not only are the initial steps in forming your LLC simple, they’re final—meaning you can get right to work on your new business without worrying about potential bureaucratic roadblocks.
- Asset Protection: Forming your LLC in New Mexico also comes with numerous external and internal protections, meaning your assets are particularly safe from outside threats or other members.
How Do I Fund a New Mexico LLC With Assets?
Using your assets to acquire a loan and fund your New Mexico LLC is a totally liable financing option. Whatever assets you do use to finance your new company, it’s worth making sure that they are titled properly under the name of your LLC. According to Section 53-19-29 of the New Mexico Statutes, “Property may be owned by a limited liability company, even though the property is not acquired or held in its name.”
Is it My LLC if I Don’t See My Name on the Articles?
If you don’t see your name on important LLC articles, don’t fret. Listing members’ names and addresses isn’t required by the state of New Mexico, which can cause concern for those looking over these articles. You can, however, make it so these documents properly reflect your standing in the LLC by making a request.
What Do I Do When Facing a Personal Judgment?
Given the chance that you may face some sort of personal conflict with other members, managers and employees, it’s good to know where you stand when it comes to possibly facing a personal judgment. Thankfully, the State of New Mexico has a number of statutes meant to protect assets belonging to you and the LLC, including:
This section of the New Mexico Statutes says:
- You can assign membership interest.
- A creditor does not automatically become a member of your New Mexico LLC if they win a court case against you that forces your interest to be reassigned.
- That creditor would only receive potential payments of interest from your membership in the LLC.
- The creditors of a member of the LLC, even in the face of personal judgments, would be awarded by the court only an assignment of membership interests.
This section states:
- All members need to consent to a creditor becoming a member even after the creditor wins the assignment of member interests in court.
- After assignment, that creditor is liable to continually fund the LLC if that is something members have agreed to do.
- A member’s interest can be factored into the post-judgment payment total.
- The creditor has the same rights, and no more, as someone assigned the member’s LLC interest.
In New Mexico, Personal Net Income Tax Rates Are:
- Between $0 and 5,500: 1.70 percent
- Between $5,500 and 11,000: 3.20 percent
- Between $11,000 and 16,000: 4.70 percent
- $16,000 and more: 4.90 percent
By combining the state’s 5 percent tax and the typical local tax of 1.4 percent, you can calculate an average sales tax rate of 6.4 percent for the state of New Mexico.
What Other LLC Forms Will I Need?
There are other forms not required for filing with the Secretary of State, meant to help better guide you and your LLC as you move forward.
These LLC Forms will provide assistance with your business management:
- LLC Meeting Minutes
- LLC Membership Certificate
- LLC Membership Interest Bill of Sale
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