Having a New Mexico LLC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in New Mexico.
On this page, you’ll learn about the following:
- How to Start an LLC in New Mexico
- After Starting your New Mexico LLC
- New Mexico Foreign LLC
- Why an LLC in New Mexico
- Biggest Industries of New Mexico State
- New Mexico LLC Formation Review
How to Start an LLC in New Mexico
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. 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
Deciding on a business name is the first step to start an LLC. In New Mexico, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the New Mexico business naming requirements. Once you pass through them, you can successfully name your business.
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.
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, New Mexico. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in New Mexico. The cost of a name reservation is $20.
Important Quick Links:
325 Don Gaspar,
Santa FE, New Mexico 87501
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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:
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Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent 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. LLC cost in New Mexico includes other fees and taxes. You may file them online or by mail.
This New Mexico 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. To know more about online filing, visit the New Mexico Certificate of Formation.
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.
When it comes to an LLC operating agreement New Mexico does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve New Mexico LLC later.
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 and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Note: You don’t need 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.
And that’s all! Congratulation, you are now done with all the necessary steps to form your New Mexico LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
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 bank account
- File New Mexico business permits & licenses
- Get liability for business and professional liability 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 New Mexico foreign 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.
New Mexico Foreign LLC
To register a New Mexico foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, New Mexico. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check New Mexico Foreign LLC to know more about having a foreign LLC.
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: 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.
- Name your New Mexico LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- 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.
If you are a resident of New Mexico, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $50 (domestic LLC) and $100 (foreign LLC), LLC costs in New Mexico include sales tax of 5.125% every year
It takes 2 business days to get a New Mexico LLC if you file it online.
Every year all the LLC have to submit an Annual Report to the New Mexico Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
Having an LLC is easier than other forms of business. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. On the other side, the formation of LLCs requires less paperwork and fewer legal complexities. If you have any questions, leave a comment below.