How to Start an LLC in New Mexico | Guide on New Mexico LLC

Forming an LLC (Limited Liability Company) in New Mexico is easy and affordable. The following are few procedural steps on how to start an LLC in New Mexico. LLCs can be formed in two ways, domestic and/or foreign. If you are planning to set up an LLC in states other than New Mexico, visit How to Start an LLC.

New Mexico LLC

Why an LLC in New Mexico

Those who are opting for starting a New Mexico LLC will have massive incentive programs and tax benefits for operating in the state. Many industries are benefited from the incentives as they are creating jobs and investing capital in New Mexico. The detail to which is discussed in detail below.

No franchise taxation 

When a person is thinking of expanding their business, then they get two options. Either they choose to form a new branch or series of LLC to expand, or they sell the franchise rights to some other person who is willing to do the same business as yours. In New Mexico LLC, there is a tremendous benefit of selling franchise rights that is no taxes are leveraged over the franchise. One can start the franchise LLC in the state of New Mexico without paying taxes as they need to pay in other states.

Privacy of LLC 

The reason why so many LLCs are showing interest in the state of New Mexico is the privacy policies of LLC in New Mexico. There are no questions asked regarding who are the members and managers in the LLC when a person takes the first step of starting an LLC. This gives them the flexibility to choose the members and make changes whenever they want to, in accordance with the working and contribution of a member to the LLC.

Entrepreneurs prefer this option as they don’t want their names to be in the public records of the company.

Competitive costs

The cost to Start an LLC in New Mexico is very low. The price that is required to be paid to the government is only $50. If you are hiring a professional (registered agent) for the work of filing, then you will be astonished to know that in the value of below $300, you will be paying fees to the government as well as to the agent also for one year.

Incentives offered

Forming an LLC in New Mexico can be a fruitful deal for businesses if we consider from the point of view of incentives that are offered to the businesses. The incentives are total industry based in which the Agro-based industries are at the top. Some benefits that are given to the value-added agricultural sectors are:-

  • The tax credit is given to provide jobs in rural areas.
  • For manufacturers, a receipt deduction is made based on gross consumables.
  • There are preferential taxation rates for beer and wine producers.
  • There is a tax exemption for Texas/New Mexico residents also for LLC startups.

How to Start a New Mexico LLC

Suppose you’re planning to invest in some profitable business or maybe about to set up your business in New Mexico. In that case, forming an LLC in New Mexico is the simplest option for you.

An LLC or a Limited Liability Company a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in New Mexico. 

Step 1: Decide a Name for Your LLC

If you are to start an LLC in New Mexico, the first thing you do is decide on a business or company name, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with the New Mexico business naming requirements. It must also be easily searchable for potential clients. Here is a step-by-step guide to follow when naming your New Mexico LLC. 

Why do you need a proper business name?

If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.

Because of this, here are some of the major benefits of choosing the best LLC corporate names.

  • To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
  • After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
  • You can only get the EIN number when you have your name registration certificate with you.

What are the requirements when deciding a name for your LLC? 

name search is vital to make sure your business’ name is unique. Check the availability of your name with Business Entity Search on the New Mexico Secretary of State’s website. Reserve the name by completing the Name Reservation Request Form for Domestic Entities.  

  • Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
  • You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
  • As for a business website and your URL name, check if your name is still available for domain use with NameCheap.

Reserve a business domain

Even if you don’t have plans to set up a website today, it will help if you buy a domain to avoid others from using your name for their website, so do visit NameCheap for your domain name and Kinsta for web hosting.

If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.  

Step 2: Assign a Registered Agent in New Mexico

A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal documents, a notice of lawsuits, and other official government correspondence in New Mexico. Choosing New Mexico-registered agents for your LLC is required. 

Make sure your registered agents are residents of Alabama. It could also be a business. Here are the recommended agents and employees for you:

These five LLC formation services are recommended agents’ registered services as they are authorized to conduct business in New Mexico. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years. 

Step 3: File Articles of Organization in New Mexico

A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the New Mexico Secretary of State, which costs $50. You may file them online or by mail. 

This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in New Mexico, like if it is a member-managed or managers-managed

Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your New Mexico LLC will offer.

How to File Online

Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county.

Step 4: Create Your New Mexico LLC Operating Agreement

An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts. 

Starting an LLC in New Mexico does not require you to have an operating agreement, but it is ideal to have one that contains all your details of business operation.

Step 5: Filing a New Mexico LLC EIN

The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes. It is like a Social Security number dedicated to a business. 

It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for tax filing and to determine tax classification options.

Mail to:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

After Starting your New Mexico LLC 

After forming your LLC, there are still some things that you will need. Take note of the following:

  • Get a company business account
  • File New Mexico business permits & licenses
  • Get liability for business insurance with coverage for employees
  • File a New Mexico LLC annual report or biennial report
  • Already existing LLCs that wish to operate in New Mexico must register as a foreign New Mexico LLC.  

This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.  

Biggest Industries of New Mexico State

Are you interested in being an entrepreneur and want to start an LLC in New Mexico? If yes, then this can be a life-changing decision for your life but wait a minute. Have you researched the top businesses of New Mexico? If not, you should do it now with the help of the below-mentioned information as it can help your journey.

Oil and Energy Sector

There is a massive deposit of fuel and natural gas resources in the soil of New Mexico. The Permian Basin and the San Juan Basin in the state are the biggest oil deposit, with the help of which the USA is getting 3% of crude and 10% natural gas. Also, there is sunshine in the state all year round, which has made it a competitor in the list of solar energy production also. The energy sector’s overall contribution to the New Mexico GDP is $17.17 billion that also includes coal mining.

Defense and Aerospace

The environment of New Mexico State is best for the defense industry, especially aerospace. The land that is present in the state is dry, which helped the state to form large-sized testing places which are restricted for common usage. Also, many military installation bases and research facilities in the state account for generating 1/10th of the state jobs.

Tourism and Entertainment Business

Due to the favorable environment, a vast population of new Mexico loves to spend their weekends and holidays in New Mexico. Also, it is cheaper for common people to come to the state and perform various recreational and fun activities offered in the state. The industry’s contribution in previous years was $7 billion of the state’s annual GDP.

Some of the small businesses that are thriving well in the state are:-

  • Medical waste disposal
  • Pawnshops
  • Tourism package and planners

New Mexico LLC Formation Review

Time needed: 1 hour and 5 minutes.

Just to recap, here are the easy steps again when forming an LLC in New Mexico. Click on the steps in this list to read the full detail.

  1. Name your New Mexico LLC

    The first thing you must do is to choose a company name, which should include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
    name llc

  2. Choose a registered agent

    In New Mexico, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
    get registered agent

  3. File a formation certificate

    Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
    file formation certificate

  4. Create operating agreement

    An operating agreement is not a strict requirement but something encouraged when you start an LLC.
    create operating agreement

  5. Get an EIN

    The Employer Identification Number (EIN), also called  Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
    get an ein

F.A.Qs

What is the difference between ‘domestic LLC’ and ‘foreign LLC’?

A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.

What do I need for Domestic and Foreign LLCs?

For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.

Is the cost to form an LLC the same across states?

The cost to form an LLC varies per state.

Does an LLC need to use a DBA?

Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here

Why are operating agreements important?

This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.

Is there anything else I should keep in mind when naming my LLC?

>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.” 
>Do not include words that could create confusion between your LLC and any government business. 
>Words like ‘bank, attorney, university’ are restricted as well. 
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.

Where can I file my LLC name?

Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.  

How can I know if my URL name is available?

As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website. 

Can I mail the LLC Certificate of Formation to the Secretary of State?

No. Never mail these documents or payments to the Secretary of State directly. 

Why do I need an EIN?

The reason you might need an E.I.N. is that it would help for three reasons:
>Opening a business bank account
>Filing and managing federal and state taxes
>Hiring employees or agents

How do I get an EIN when I do not have a Social Security number?

You are not required a Social Security number when getting an EIN You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.

I already have an EIN for a sole proprietorship; what now? 

Note that an LLC is different from a sole proprietorship. If you already have an EIN for your sole proprietorship, the IRS will require you to get a new one when your convert to an LLC. 

Do foreign applicants need an SSN to get an EIN?

International EIN applicants do not need an SSN to get an EIN.

What is an IRS?

The IRS is the one that will issue your EIN. You can request an EIN from the IRS ONLINE or download the FORM, fill it out, and send it by mail or fax.

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