- Step 1. Naming Your New Mexico LLC
- Step 2. Appoint a Registered Agent
- Step 3. File Your Articles of Organization
- Step 4. Create an Operating Agreement
- Step 5. Get an EIN/Tax ID Number
- Step 6. Keeping Your LLC Running
- New Mexico LLC Resources
- New Mexico LLC FAQs
Step 1. Naming Your New Mexico LLC
One of the most important first steps in setting up your LLC is to decide on a name for it. The name that you select for your business must be distinct from all other businesses in New Mexico, in addition to following certain naming rules.
Legally Required Designation
In line with New Mexico LLC regulations, the name of your LLC must have the phrase “limited liability company” in it or contain one of the following approved abbreviations:
- Limited Company
As we mentioned above, it is essential that whichever name you choose for your LLC is unique and distinct from all other businesses in the state. You can ensure this by performing a search of available business names on the New Mexico Secretary of State’s website.
If you see a name that you love and is available, you can reserve it for up to 120 days before officially establishing your LLC by filing the Application for Reservation of a Limited Liability Company name. There is a $20 filing fee associated with this form, and you will need to mail it to the address listed at the bottom of the document.
While looking for your LLC name, you may also want to perform an available domain name search. It can be a good idea to purchase a matching domain name ahead of time, even if you don’t plan on setting up a business website immediately, as it can save future hassle in finding a useable domain name.
When choosing your LLC name, you should avoid including any words that may risk confusing your business with a state or federal government entity. This can include, but is not limited to, words like “FBI,” “Treasury,” “IRS,” or “State Department.”
You also need to keep in mind that using words such as “bank,” “chiropractor,” “attorney,” or other professional indicators may require the presence of a properly licensed individual in your LLC. New Mexico does not provide for the formation of professional LLCs, but you will need to ensure that all state licensing requirements are met when using these terms in your business.
Using a Trade Name
New Mexico LLC law does allow you to use a trade, or DBA (doing business as), name for your LLC in the state. This means that while you can continue using your legally registered LLC name on all official state and federal documents, you can use your DBA name when interacting directly with the public.
Unlike most other states, you will not need to file anything or register your DBA with the New Mexico Secretary of State before using your name. Instead, you can simply start using it to identify your business to the public. However, you should be sure that the DBA name you choose does not infringe on any other business and that it won’t bring legal complications for your LLC. Consider a consultation with an attorney specializing in LLC law for more information on using a DBA name.
Step 2. Appoint a Registered Agent
In New Mexico, all legally established LLCs must have a registered agent (also called an agent for service of process) appointed. Your registered agent will be responsible for receiving all legal documents, government communications, and tax documents for your LLC, acting as a contact between your business and state or federal agencies. They will also be the responsible party that is contacted in the event of a lawsuit against your LLC.
You can appoint any New Mexico resident, including a member of your LLC, or a business that is authorized to conduct operations in the state as your registered agent. As long as your appointee has a valid New Mexico street address and is available during regular business hours, they are eligible to be your registered agent.
Step 3. File Your Articles of Organization
In order to officially establish your LLC in New Mexico, you will need to file your Articles of Organization with the Secretary of State’s office. This document will need to include important information about your LLC and its organization; a sample of some of the items required on this document are listed below.
- Your LLC’s name
- Your LLC’s start date, if not immediate
- Your LLC’s duration (either perpetual or a time period)
- Your LLC’s business purpose
- Your LLC’s registered agent’s name and address, in addition to a signed Statement of Acceptance
- The contact information of your LLC
- Your LLC’s principal office and mailing address
- If your LLC will be member-managed or manager-managed
- If your LLC only has one member
- The LLC’s organizer’s name and address
There is a $50 filing fee required with your Articles of Organization, and you must file the form online. You can do this by accessing the Corporations and Business Services portal through the Secretary of State’s website. From there, you will be able to create an account and follow the instructions to file your document.
If you need help understanding how to file your Articles, you can check out this tutorial video posted by the Secretary of State that walks you through the online filing steps.
Step 4. Create an Operating Agreement
New Mexico does not require LLCs in the state to create an operating agreement, but you may want to consider establishing one for your business anyway. Your operating agreement will set clear guidelines for exactly how your LLC is managed, define the rights of members and managers, and will give instructions on how to conduct any dissolution operations. It can also give guidance for what to do if your LLC experiences a lawsuit.
Keep in mind that if you don’t set these guidelines ahead of time, New Mexico LLC law will determine how your business is handled in the case of disputes, and this might not be in your best interest.
Additionally, if you are applying for LLC financing, you will find that most business bank accounts, loan applications, and other business services will require you to send a copy of your operating agreement along with your application in order to demonstrate your LLC as a separately operating business entity.
Step 5. Get an EIN/Tax ID Number
Once your Articles of Organization have been filed and processed, any LLC that has more than one member or any single-member LLC that wants to either hire employees or be taxed as a corporation needs to apply for a Tax ID number, also known as an EIN (employer identification number). This number is obtained through the IRS, and it is completely free to apply for.
You will use your EIN to identify your business to the IRS on all tax documents and necessary government filings; the number acts much like a social security number for your LLC. If you want to hire employees, file federal taxes, open business bank or credit accounts or apply for business funding, you will need an EIN.
You can file the EIN application either online or by mailing it in. Keep in mind that if you are a foreign filer or do not have a social security number, you will need to file for your EIN through the mail.
The quickest and easiest way to apply for your EIN is online; you will receive your number once your application is completed. Visit the IRS website to apply for your EIN for free.
You will need to fill out this form when applying for your LLC by mail. If you are a foreign filer or do not have a social security number, leave section 7b blank. Mail the completed form to the address below. You can follow up on any questions with the IRS at (267) 941-1099.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Step 6. Keeping Your LLC Running
Even after LLC is legally established in New Mexico, there are some things you need to keep up with to ensure that your business stays running without issue.
File Annual Returns
LLCs in New Mexico are not required to file annual reports, but your business may be liable to file the state’s Income and Information Return for Pass-Through Entities (PTE) on an annual basis. This report must be filed on or before the due date of your federal income return each year.
However, this form does not apply to single-member LLCs that are being treated as pass-through entities (you will pay annual taxes on any business profits on your individual state income tax return). It also does not apply to LLCs that are being taxed as a corporation on a federal level.
The PTE return must be filed with the New Mexico Taxation and Revenue Department. More instructions about filing this form can be found here.
Separate Your Business Finances
New Mexico does not require that your LLC possesses a separate bank account, but it is a good idea to start one anyway. A business credit or debit account can help keep your LLC’s finances separate from any personal ones, fully establishing your LLC as an independently operating business. This is especially helpful in the case of lawsuits or other legal issues surrounding your LLC.
When opening a debit or credit account for your LLC, you will most likely need to show your Articles of Organization, Operating Agreement, EIN, or other LLC documents. You should also make an effort to compare all of your banking options before making a choice on where to open an account; different banks will have varying minimum required balances or credit spending limits, and you want to be sure that you select something that is the best for your LLC’s needs.
Keep Up With Federal and State Taxes
Keeping up with both federal and state taxation requirements is essential in avoiding any major penalties and fines for your LLC.
Federal Tax Requirements
There are several different tax structures you can choose from for your LLC that can meet different company needs, as each tax structure comes with its own unique type of federal taxation requirements. This article can help you gain an in-depth understanding of the differences between each type of tax structure and help you decide which is best for you.
In general, most LLCs are taxed as sole proprietorships or partnerships. This means that you will be expected to file Schedule C and your individual income tax return to declare any income you receive through your LLC (your LLC is acting as a pass-through entity in this situation).
When using this tax structure, you should keep in mind that you will most likely need to pay self-employment tax (which has a rate of 15.3%), in addition to any income tax. You may also need to make quarterly estimated tax payments to avoid IRS fines; the IRS website gives more details on this.
If you want, you can choose to have your LLC taxed as a corporation, like an S Corporation or a C Corporation. You will need to fill out IRS Form 8832 and IRS Form 2553 to declare this. After these forms have been processed, your LLC will be treated as a corporation and expected to file a separate corporate tax return with the IRS.
New Mexico Business Taxes
While there is no general business tax for LLCs operating in New Mexico, all businesses in the state must register for a Combined Reporting System (CRS) identification number through the Department of Taxation and Revenue. This number will be used to identify your business to the state on any and all tax forms of license applications that you file; the application for a CRS is online and free to file.
Additionally, if your LLC will be taxed as a C corporation, you may be liable to pay both Corporate Income Tax and Corporate Franchise Tax. These taxes are also paid through the Department of Taxation and Revenue, and more information about who is eligible to pay them can be found here.
Gross Receipts Tax
In general, if your LLC is selling some type of good or service, you will need to pay gross receipts tax to the state; this tax is essentially a sales tax. You will need to register for the gross receipts tax online with the New Mexico Department of Taxation and Revenue. After you register, you will be sent a Certificate of Registration and can then pay your taxes each year online through the Department website.
State Employer Taxes
If your LLC will have employees, you will likely be liable to pay both withholding taxes and unemployment insurance tax. Withholding tax should be registered for and paid through the New Mexico Department of Taxation and Revenue, while unemployment insurance tax must be registered for and paid through the New Mexico Department of Workforce Solutions.
Acquire Necessary Permits and Licenses
There is not a general business license required for LLCs in New Mexico. Still, depending on the type of business you are running, you may need to obtain certain permits or meet professional licensing requirements. Typically, permits and licenses are received locally, so you should check with the city or town clerk in that area where your LLC is located for more information; you will need your LLC’s CRS to register for most types of state licenses.
You can also visit the New Mexico Business Portal for specific information regarding professional licenses and local permit acquisition. This website also has a section for you to have any questions about obtaining business licensing answered for free.
Additionally, your LLC may need to obtain permits or licenses on a federal level, though whether this is needed or not depends on the type of business you are running. For help determining if you need to meet additional federal requirements, you can use the licensing directory on the U.S. Small Business Administration’s website.
New Mexico LLC Resources
The below list of resources is a great place to turn to if you need guidance through every step of the LLC set up process in New Mexico.
- Available LLC name search
- Available domain name search
- Reserve an LLC name
- Articles of Organization online file
- IRS EIN free online application
- Annual PTE return information
- CRS identification number registration
- New Mexico Department of Taxation and Revenue
- New Mexico Department of Workforce Solutions
- New Mexico Business Portal
- S. Small Business Administration
New Mexico LLC FAQs
The answers to these frequently asked questions can help put to rest any remaining worries that you may have regarding the establishment of your LLC in New Mexico.
It will cost you $50 to file your Articles of Organization in New Mexico and officially establish your LLC. You may also end up paying a $20 fee to reserve your LLC name ahead of time.
The cheapest way to start your LLC in New Mexico is to file your Articles of Organization online without first reserving an LLC name. Doing this will only cost you $50 to get your business set up in the state.
How much your LLC pays in taxes in New Mexico depends on the individual tax structure that your business has set up. You may find that you also need to pay taxes on your PTE return or various corporation taxes in the state, in addition to gross receipts taxes, state employer taxes, and federal taxes.
If you are confused about which taxes you owe or your overall federal and state tax burden, you may want to consult with a professional accountant or financial advisor to ensure that you meet all taxation requirements.
New Mexico LLCs are not required to file state annual reports, but most will be required to file the Income and Information Return for Pass-Through Entities (PTE) on an annual basis. Exceptions to this requirement are single-member LLCs taxed as sole proprietorships in the state, and LLCs taxed as corporations (namely as C corporations).
If you are finished conducting operations under your New Mexico LLC, you will need to file your Articles of Dissolution with the Secretary of State’s office and with the Public Regulation Commission. You can find more information about this on the Secretary of State’s website.