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.
On this page, you’ll learn about the following:
- How to Start a New Mexico LLC
- After Starting your New Mexico LLC
- Why an LLC in New Mexico
- Biggest Industries of New Mexico State
- New Mexico LLC Formation Review
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 form of business for you. For any entrepreneur is it good to have an LLC as it reduces personal liability for company or business debt.
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?
A 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 forms, formation documents, any internal document, a notice of lawsuits, and other official government correspondence in New Mexico. Choosing a New Mexico-registered agent for service of process for your LLC is required.
Make sure your registered agents are residents of New Mexico or having a physical street address. It could also be a business with an office address. Here are the recommended agents and employees for you:
Our Rating & Pricing
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$49 + State Fees
$299 + State Fees
$399 + State Fees
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, these professional service providers can guarantee you the best filing services to their potential customers 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. LLCs with employees need to check the New Mexico government portal for the guidelines to hire employees.
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 a limited liability 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 like employer taxes, federal taxes and to determine tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
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 the upcoming filing deadline and filing fee, annual costs, or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Why an LLC in New Mexico
Those who opt for starting a New Mexico LLC will have massive incentive programs and tax benefits like a reduction in tax liabilities for operating in the state. Also, various business funding options for domestic business entities are available. Many industries are benefited from the incentives as they are creating jobs and investing capital in New Mexico. Following are the long-lasting benefits in detail discussed 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 sell the franchise rights to some other person willing to do the same business as yours. In New Mexico LLC, there is a tremendous benefit of selling franchise rights: no taxes are leveraged over the franchise. One can start the franchise LLC in New Mexico without paying taxes as they need to pay in other states.
Privacy of LLC
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, by 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 company’s public records.
The cost to Start an LLC in New Mexico is meager. 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, you will be astonished to know that in the value of below $300, you will be paying fees to the government and the agent also for one year.
Forming an LLC in New Mexico can be a fruitful deal for businesses if we consider from the point of view of incentives 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.
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 to 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, making it a competitor in the list of solar energy production. The energy sector’s overall contribution to the New Mexico GDP is $17.17 billion, including 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 form large-sized testing places 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 new Mexico population 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
- Tourism package and planners
New Mexico LLC Formation Review
Time needed: 30 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.
- 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.).
- 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.
- 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.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- 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.
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.
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.
The cost to form an LLC varies per state.
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.
This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
>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.
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.
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.
No. Never mail these documents or payments to the Secretary of State directly.
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
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.
International EIN applicants do not need an SSN to get an EIN.