When you want to start a business in New Mexico, one of the first decisions you’ll need to make is what type of business entity to form. One option is to form a limited liability company or LLC. An LLC offers several benefits, including personal asset protection and flexible management structures. Here’s a step-by-step guide on how to start an LLC in New Mexico.
Before we dive in, here’s a really good explanation video on starting an LLC in New Mexico for those who prefer a video guide.
Benefits of starting an LLC in New Mexico
There are many benefits to starting your LLC in New Mexico. As expert start-up guides will advise you, it has the advantage of limited liability protection for its members. It’s more compact than a Corporation or S Corporation.
Limited Liability Protection
One of the most significant benefits of starting your New Mexico business as an LLC is that it offers limited liability protection, which means that if a lawsuit arises from a customer or client for something you did while operating your business – it won’t follow you home. Rather than the people who own it, the business itself is liable for paying out any damages.
Your personal assets, such as your car or house, are separated from your New Mexico business assets and aren’t at risk of being taken away if someone sues your business for something you did wrong. Many entrepreneurs start their businesses as LLCs because of this benefit.
An LLC in New Mexico has the choice of being taxed as a Sole Proprietorship, Partnership, or Corporation. It’s a good deal for start-ups since they don’t have to worry about finding an accountant or anything like that just yet.
Note: Single-Member LLCs are treated as Sole Proprietorships by default.
Minutes of meetings not required
Lastly, one of the benefits of starting your LLC in New Mexico is that no minutes are required for meetings. People don’t have to travel for monthly meetings or anything like that. They need to follow the operating agreement, which doesn’t take too many hours out of the day.
New Mexico LLC Rules & Requirements
This is a quick summary of the most important rules and requirements that this article will go through in-depth.
To apply for permission to form an LLC in New Mexico, the company must have a in New Mexico. Your LLC’s name must include “Limited Liability Company,” or their abbreviation, “LLC.” It can’t be something that resembles another already existing business. Ensure you as a business owner keep accurate records and reports of your business transactions.
Best New Mexico LLC Formation Services
If you’re thinking about starting your LLC in New Mexico, it’s a good idea to use a professional service that can handle the process for you. These services will ensure you get all the necessary paperwork filed correctly and timely so that you don’t have to worry about anything going wrong with your business registration.
Finding the Best LLC Formation Services in New Mexico
Choosing the best LLC formation services in New Mexico is an essential first step for anyone looking to start their own. Here are some of the most critical factors you’ll want to consider:
- Customer service/communication
- Integration with accounting software (if necessary)
These factors will help you narrow down your list of potential providers to find the one that provides you with the professional service you need at an affordable price. We have reviewed some of New Mexico’s best LLC formation services here: Best LLC Formation Services.
As mentioned above, it’s usually recommended that if you’re unfamiliar with this kind of thing, then you should consider allowing LLC formation service providers to help you start your own business here in New Mexico. These services will ensure that you comply with state law and all the rules and requirements. If anything goes wrong, they’ll have your back so that you don’t have to worry about it.
However, if you’re looking to do it on your own, then you can continue reading our guide on how to start an LLC in the state of New Mexico.
The following is a step-by-step guide of what you can expect when forming an LLC in New Mexico:
5 Steps to Starting an LLC in New Mexico
- Name your New Mexico LLC
- Choose your New Mexico Registered Agent
- File your New Mexico LLC Articles of Organization
- Create your New Mexico LLC Operating Agreement
- Get an EIN for your New Mexico LLC
Step 1: Name your New Mexico LLC
Choosing your name can be one of the most challenging parts of starting your New Mexico LLC. You’ll have to choose a name that’s not already in use by another New Mexico LLC or restricted by the state.
The rules for naming your New Mexico limited liability company are as follows:
- Your name cannot mislead people into thinking the New Mexico LLC was set up by the government or is a federal government agency.
- The name can’t be too similar to another New Mexico company’s
- Your name has to end with an LLC designator (LLC, LTD., etc.)
- You may need to fill out additional paperwork if you want to use certain words in your New Mexico LLC name, including bank, trust, trustee, incorporated, Inc., and corporation.
- If you want to see if a specific LLC name is available, you can run a business name search on the Business Entity Search page of the New Mexico state website.
After choosing the perfect name for your new New Mexico business, you can also secure a good domain name. A domain name is also helpful if you want a business email address @yourllc.com.We recommend using Namecheap to register your domain. They have great prices, fast service, and an easy-to-use website.
Step 2: Choose your New Mexico Registered Agent
Before you form your LLC in New Mexico, you’ll need to appoint a registered agent with a physical street address in the state of New Mexico. This person or entity would be responsible for receiving essential documents on your behalf if anything happened that would require that sort of thing (lawsuits, etc.). You can name yourself as your New Mexico registered agent, but that isn’t advisable because you would not be able to claim any anonymity.
What is a Registered Agent?
A New Mexico registered agent is an individual or business entity that agrees to accept the service of process on behalf of a Limited Liability Company.
When you create a Limited Liability Company in New Mexico, the State of New Mexico requires that this registered agent be appointed for your LLC to become effective. The New Mexico Secretary of State’s Office will not file your Articles of Organization unless you designate a registered agent on your application form.
Who can be a Registered Agent in New Mexico?
For a registered agent, you can select a person or an organization. The individual can be a New Mexico resident, a New Mexico corporation, or a non-New Mexico corporation with a business presence in New Mexico.
You can also use a New Mexico registered agent service to appoint a registered agent and obtain a business address. Services such as Zenbusiness and Northwest Registered Agent offer this service as a feature of some of their packages when you register a New Mexico company with them.
What does a Registered Agent in New Mexico do?
A registered agent in New Mexico is available during normal business hours to accept important documents and notices on behalf of your LLC. These can be official court papers such as lawsuits or service of process documents that will require the registered agent’s signature.
A registered agent is not responsible for the management of your New Mexico LLC, nor are they required to do anything with the documents once they are received at their business address except for filing them under New Mexico law.
Step 3: File your New Mexico LLC Articles of Organization
You’ve chosen your New Mexico name and appointed a registered agent, and now it’s time to create your LLC and become a recognized legal entity.
Before filing, you will need to decide between a member-managed and manager-managed LLC. The members run a member-managed LLC, while a designated manager runs a manager-managed LLC.
Note: Your registered agent is required to sign a Statement of Acceptance of Appointment, and you must upload it at the time of filing.
To start an LLC in New Mexico, you’ll need to file your Articles of Organization with the New Mexico Secretary of State, which can be done online. The online filing fee is $50, and a person must file this with authority to do so on behalf of the New Mexico LLC.
File your New Mexico LLC Articles of Organization Online
You’ll need the following documents to submit your papers:
- The official name of your New Mexico LLC
- A brief description of the purpose of your New Mexico LLC
- Your New Mexico LLC’s street address
- Your New Mexico registered agent’s name and address
- The signature of your registered agent
- Your LLC’s authorized person’s signature
- Your return address
You can submit your Articles of Organization through New Mexico’s online business filing system.
Step 4: Create your New Mexico LLC Operating Agreement
After filing your New Mexico LLC Articles of Organization, you will want to create an Operating Agreement.
An operating agreement is an internal document that sets out the internal rules of your New Mexico LLC. These rules address issues such as how LLC owners will spend the money, whether voting takes place within your business, what happens if someone wants to sell their interest in the company etc.
New Mexico does not require an LLC to have an operating agreement, but it is recommended that you create one. An operating agreement ensures that all members know and understand their roles within the company. If they ever need to take legal action, they will show a court of law that the company functions as more than just an unincorporated association.
This operating agreement should be thorough but concise, outlining everything you want to include regarding the membership responsibilities of your New Mexico LLC, so there are no misunderstandings down the line.
The operating agreement will also be necessary when you open a business bank account in New Mexico.
Step 5: Get an EIN for your New Mexico LLC
An EIN, or Employer Identification Number, is a unique number that the IRS issues to businesses for tax purposes. An EIN is like your business’s social security number. You can use it to file state or federal-level tax returns and financial statements with different government agencies or open a business bank account.
An EIN is required for several reasons. First, as mentioned above, it is needed to open a business bank account for your New Mexico LLC. You will also need an EIN to hire employees, as it is used on employment tax forms. Finally, an EIN is often required when filing your business taxes.
After you receive your EIN, you will be informed of your New Mexico LLC’s various tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Applying for an EIN for your business is free of charge.
New Mexico LLC Processing Time
Online filings take 1-3 business days for the state of New Mexico to process your Articles of Organization and approve your LLC.
New Mexico LLC Frequently Asked Questions
How much does it cost to start an LLC in New Mexico?
The online filing fee is $50 in New Mexico.
How do I set up an LLC in New Mexico?
Step 1: Choose a name for your New Mexico LLC
Step 2: Choose a New Mexico Registered Agent
Step 3: File the Articles of Organization
Step 4: Create an Operating Agreement
Step 5: Get an EIN
Is there an annual fee for LLC in New Mexico?
No, there is no annual filing fee in the state of New Mexico.
How long does it take to start an LLC in New Mexico?
It takes 1-3 business days to start an LLC in New Mexico when filing online.