How to Start an LLC in New Mexico (Step-by-Step Guide)

If you’re considering forming a New Mexico LLC, you’re choosing to protect your assets while enjoying flexibility in business operations. This is one of the best states in which to form an LLC as a foreigner.

To establish your NM LLC successfully, you must choose a unique business name, designate a registered agent, file Articles of Organization, and obtain a New Mexico Tax ID.

But there’s more.

Forming your LLC in New Mexico costs about $50; approval takes 1 -3 business days.

This guide compiles all the information you need to start an LLC in New Mexico today.

What Are the Steps to Start an LLC in New Mexico?

To start an LLC in New Mexico, you need to:

• Step 1. Choose a unique name for your LLC
• Step 2. Designate a registered agent in New Mexico
• Step 3. File LLC Articles of Organization with the state
• Step 4. Create an Operating Agreement
• Step 5. Get an EIN from the IRS
• Step 6. Register for a Tax ID Number in New Mexico
• Step 7. File BOI report

Let us dive more in-depth into these steps so I can show you how to get them:

Step 1: Choose a Unique Name for Your New Mexico LLC

Choosing a name for your LLC is the first and most crucial step. It’s a big deal because it’s how people will recognize your business. Your name must clearly state that you’re a limited liability company.

You can use terms like:

• Limited Liability Company
• Limited Company
• L.L.C.
• LLC
• L.C.
• LC

You can also abbreviate “limited” to “Ltd.” and “company” to “Co.”

Your chosen name must be unique and not too similar to any other business name in New Mexico. Search the Secretary of State’s website to check if your name is available.

If you’re not ready to register your LLC but want to secure your name, you can reserve it for 120 days for $20.

You can reserve it online or by filing an Application for Reservation of a Domestic Limited Liability Company Name with the SOS. Online reservations are available through the online portal.

Some businesses use an assumed name or a DBA (“doing business as”) other than their legal name. Unfortunately, New Mexico does not allow businesses to register an additional name as a DBA. Choosing a good name for your LLC is, therefore, very important.

Also, ensure your business name is available for a website or other unique internet presence. You can check website domain names online for free.

Consider checking for a matching URL for a website to boost your online presence. This will also help with marketing efforts.

Step 2: Designate a Registered Agent in New Mexico

A registered agent is someone who gets critical legal documents for your LLC. This includes things like court papers and official notices. It’s essential to have a reliable person or business handling this for you.

Who Can Be a Registered Agent?

You have a few options for who can be your Registered Agent in New Mexico:

• You: You can act as your registered agent, but remember you must be available during business hours to receive documents.
• A Family Member: A trusted family member can be your registered agent.
• An LLC Formation Service: Professional services offer expertise in handling official correspondence and ensuring compliance with state regulations.
• A Lawyer: A legal service firm can also serve as your registered agent, providing additional legal support if needed.

Requirements for New Mexico Registered Agents

New Mexico law requires registered agents to have a physical street address, not just a P.O. Box. The address must be where the agent can consistently receive legal documents and official mail during regular business hours.

Additionally, the registered agent must be at least 18 years old and available to accept service of process. This means they must be present to handle any legal notices or court documents delivered to the LLC.

What You Need to Know

Before you appoint a registered agent, they must sign the Statement of Acceptance of Appointment document. This shows they agree to take on this role for your LLC.

You have flexibility with your registered agent. If you need to change them later, notify the Secretary of State (SOS). This makes it easy to keep your business compliant with state regulations.

Choose a registered agent wisely. They play a crucial role in keeping your LLC informed about essential matters.

What registered agents do I recommend for New Mexico?

I highly recommend Northwest registered agent services for obvious reasons.

They offer a range of benefits that set them apart, including a free year of registered agent service, which helps you save (about $300) on initial costs.

You’ll receive a complimentary operating agreement essential for outlining your LLC’s internal structure. My favorite part? Northwest also allows you to use their office address for your LLC filing, keeping your address off public records and enhancing your privacy.

Their free email forwarding service ensures you stay on top of important correspondence, and their exceptional customer support is always available to assist you whenever needed.

Step 3: File New Mexico LLC Certificate of Organization

To start your LLC officially in New Mexico, you must file the Certificate of Organization. This document provides the state with essential information about your business.

The only way to form a New Mexico LLC is by filing online. The state no longer accepts mail filings.

To file your Articles of Organization in New Mexico, follow these steps:

Step #1. Complete the file the Form: Complete and file the Articles of Organization from the New Mexico Secretary of State: Corporations and Business Services page.

Include the following:

• LLC Name: Ensure it complies with naming rules.
• Registered Office Address: This is where official papers can be sent.
• Registered Agent’s Name: The person or business responsible for receiving legal documents.
• A statement of acceptance from your registered agent
• Principal Place of Business: The primary location where your business operates.
• Duration: Indicate if your LLC has a fixed end date.
• Management Structure: Decide if it’s member-managed or manager-managed.
• Single-Member Statement: If applicable, mention that it will operate as a single-member LLC.

Step #2: Pay the Filing Fee: The filing fee is $50.

Your New Mexico LLC will be approved in 1-3 business days. Once your LLC is approved, the New Mexico Secretary of State will send you an email with the following documents:

• Acceptance Letter
• Articles of Organization (stamped and approved)
• Certificate of Organization (official approval certificate)

Step 4: Prepare an Operating Agreement for Your New Mexico LLC

An operating agreement is a document that outlines how your LLC will operate. It includes details about ownership, management, and duties.

While New Mexico does not require an operating agreement, having one is wise. It helps prevent misunderstandings among members and protects your limited liability status.

Here are some key components to include in your operating agreement if you choose to prepare one:

• Ownership Structure: Listing all members and their ownership percentages.
• Management Roles: Specify who will manage the LLC. This can be member-managed or manager-managed.
• Voting Rights: Define how decisions will be made. Will all members have equal votes?
• Profit Distribution: Explain how profits and losses will be shared among members.
• Meeting Procedures: Outline how often meetings will occur and how members will be notified.
• Amendment Process: Describe how changes can be made to the agreement in the future.

Creating an operating agreement may feel complex, but it’s essential for clarity.

It serves as your LLC’s rulebook, guiding operations and avoiding conflicts down the line. Keeping everyone on the same page is even more vital if you have partners.

Keep a signed original or a copy of your operating agreement at your main office. Having the document handy can help resolve issues quickly if a dispute arises.

Step 5: Obtain EIN for Your LLC

An Employer Identification Number (EIN) is a unique nine-digit number the IRS assigns. It identifies your business for tax purposes.

You will need an EIN to open a bank account, hire employees, file taxes, and apply for business licenses and permits.

How to Apply for an EIN:

• Online: Visit the IRS website. This is the fastest way to get your EIN.
• By Mail: Fill out Form SS-4 and send it to the IRS. This option takes longer.
• By Fax: You can also fax the completed Form SS-4.
• Phone: U.S. residents can call the IRS at 1-800-829-4933 to apply.

How Much Does It Cost To Get EIN?

Obtaining an EIN is free. However, some services charge $100 or more to help you with the entire process.

How Does it Take to Obtain my EIN?

• Online: Get it immediately.
• By Mail: Expect 4 to 6 weeks.
• By Fax: Usually within 1-2 weeks.

Step 6: Register for a Tax ID Number in New Mexico

To operate your LLC in New Mexico, you must register with the Taxation & Revenue Department to obtain a New Mexico Business Tax Identification Number. This number is essential for conducting business in the state.

You can register online using the Taxpayer Access Point. During the application process, make sure to provide all necessary information.

You may also submit an ACD-31015 Business Tax Registration to any district tax office with an appointment. Applications submitted by mail are processed in the order received, and processing times may vary.

Then, you are mailed the Registration certificate for your Business Tax Identification Number. Applications for Business Tax Identification Numbers are also available at many city, village, and town halls around the state.

Once registered, you will receive a New Mexico Business Tax Identification Number. Depending on your business activities, you might also get separate tax ID numbers for various accounts, including:

• Compensating Tax
• Gross Receipts Tax
• Non-wage Withholding Tax
• Wage Withholding Tax
• Cannabis Excise Tax (if applicable)

Each of these tax IDs helps you report and pay the required taxes based on your business operations. Be aware that different types of businesses may have additional tax obligations.

The good news is that there is no fee to register or obtain a Business Tax Identification Number. Ensure you keep track of all your tax IDs for proper reporting and compliance.

This step is crucial to avoid legal issues while running your LLC in New Mexico.

Step 7: File a BOI Report

After setting up your LLC in New Mexico, you must file a Beneficial Ownership Information (BOI) report. This is a federal requirement for new LLCs.

You must submit this report to FinCEN within 90 days of forming your LLC. Filing is free and can be done online at the FinCEN website.

Here’s what you need to prepare:

• Company Information: Name, address, and formation date.
• Beneficial Owners: Full names, addresses, dates of birth, and identification numbers.

Gather this information along with your LLC formation documents. This will help streamline the filing process.

Completing the BOI report is essential for maintaining compliance with federal regulations. It ensures transparency about who owns and controls your LLC. Take the time to do this correctly to avoid any potential penalties.

What are the Different Methods To Start a New Mexico LLC?

You have several options for starting an LLC in New Mexico. Each method offers different levels of involvement, cost, and assistance. Based on your needs and preferences, consider the following approaches.

DIY LLC Formation in New Mexico

Forming an LLC by yourself is a straightforward option. You will fill out and submit the New Mexico Articles of Organization and pay the required filing fee.

All by yourself, no third party!

Pros:

• Cost-Effective: You save money by not hiring anyone.
• Control: You have complete oversight of each step.
• Learning Opportunity: You gain knowledge about the process.

Cons:

• Time-Consuming: It may take longer if you are unfamiliar with the process.
• Complexity: You must ensure all forms are correctly filled out.
• Privacy issue: If you serve as your registered agent, you risk having your address out there.
• Lack of Guidance: You might miss the necessary steps.

Using a Professional/Online LLC Formation Services

Many online services can help you form your LLC. These platforms guide you through the entire process, handling most paperwork.

Pros:

• Convenient: They manage the filing, saving you time.
• User-Friendly: Most platforms have easy-to-understand instructions.
• Support Available: Many offer customer service for questions.
• Privacy benefits: Most services allow you to use their address for free, so your address doesn’t get compromised

Cons:

• Costs: You’ll pay a service fee.
• Variable Quality: Some services may not be as reliable as others.

Hiring an Attorney

Working with an attorney is another option for forming your LLC. This method ensures you have professional legal guidance throughout the process.

Pros:

• Expertise: An attorney knows the legal requirements and can avoid pitfalls.
• Customization: Your LLC can be tailored to your specific business needs.
• Support with Complex Situations: Ideal for businesses with unique circumstances.

Cons:

• Higher Costs: Legal fees can be expensive.
• Dependence on Others: You may rely heavily on the attorney’s schedule.
• Potential Delays: The process may take longer due to attorney workloads.

What is The Cheapest Alternative Way to Form an LLC in New Mexico?

If you want to start an LLC in New Mexico on a budget, the most affordable option is to do it online. By filing the Articles of Organization directly with the New Mexico Secretary of State, you can keep costs between $50 and $100, depending on your needs.

This DIY approach helps you avoid the extra fees of hiring a service or lawyer, saving you money for other business expenses.

However, while DIY is cost-effective, it requires some effort. You’ll need to understand all the forms and regulations, and missing a detail could delay your application or create problems later.

Consider using a registered agent if you prefer not to handle everything yourself.

They can make the process smoother by ensuring you receive important documents and helping you stay compliant with state requirements. Although this adds a bit to the cost, it can provide valuable support and peace of mind.

Who Provides the Best LLC Services in New Mexico?

There are a myriad of New Mexico LLC services from which to choose. Choosing the wrong one can affect your New Mexico LLC formation timeline—I know this from my experience using a few and researching a dozen over the years.

Here are some top-rated options you should consider:

Best New Mexico LLC Service	Google Rating	LLC Formation Cost	Registered Agent Fee
Northwest Registered Agent	4.7/5	$39	Free for 1 year
Doola	4.6/5	$0 (plus state fees)	$297/year
Tailor Brands	4.4/5	$0 (plus state fees)	$199/year
ZenBusiness	N/A	$0 (plus state fees)	$199/year

Besides, the fact that other services bill you for their registered agent in the first year, and Northwest offers it for free, is a HUGE plus for me.

Northwest Registered Agent stands out in New Mexico LLC formation due to its commitment to transparency, customer service, and privacy. Using their address helps protect your personal information, making them a reliable choice.

How Much Does It Cost To Form an LLC in New Mexico?

Forming an LLC in New Mexico involves several costs. The primary expense is the $50 filing fee for the Articles of Organization, which is essential to officially creating your LLC.

Here’s a breakdown of the costs you can expect:

Requirement	Cost
Articles of Organization Filing	$50
Name Reservation	$20
LLC Formation Service	$39 (via Northwest)
Registered Agent Fee (optional)	$0 (via Northwest)
Business Tax Identification Number	Free
Total Estimated Cost	$50 – $110

When forming a new company in New Mexico, budgeting about $50-$110 for the first year is ideal. Then, if you want to go further, you can get other bells and whistles like a virtual mailbox, custom website, trademark services, premium EIN services, etc.

The most significant (and essential) expense for every New Mexico business owner is filing the Articles of Organization, which costs $50.

Pros and Cons of Forming an LLC in New Mexico

5 Important Things To Do After Forming Your New Mexico LLC

After forming your New Mexico LLC, several essential steps must be taken. These steps will help ensure your business is set up correctly and operates smoothly. Each task is vital for your LLC’s success, from obtaining necessary licenses to managing taxes.

1. Research the Best Licenses and Permits for Your Business

Depending on your type of business, you may need specific licenses and permits. New Mexico has federal, state, and local requirements that vary by industry.

For example, if you plan to operate a retail store, you might need a building permit from the city. If your business involves food service, you will need a health permit.

Businesses in specific industries might need permits or licenses from the state or local government. Your area’s city or county clerk can give you more information about what you need to do.

If you’re a licensed professional or employ licensed professionals, make sure your business licenses are up to date.

To start, check with the New Mexico Regulation and Licensing Department and local government offices. They can guide you on what is required for your specific business.

2. Create Business Accounts for Your LLC

Opening a separate bank account for your LLC is essential for keeping your business finances organized and distinct from your funds. This separation simplifies your accounting and helps safeguard your assets by clearly distinguishing between personal and business transactions.

When choosing a bank, look for one that offers business-friendly services, such as waived fees, free online banking, and other features that can benefit your business. To open the account, be prepared to provide your EIN and a copy of your Articles of Organization.

A dedicated business account streamlines your financial management and simplifies tax preparation.

Having all your business transactions in one place lets you easily track your income and expenses, ensuring everything is well-organized and accessible when tax season rolls around.

3. Understanding New Mexico Tax Requirements and Managing Your Taxes

Your LLC has specific tax obligations in New Mexico.

Businesses in New Mexico pay a gross receipts tax instead of a sales tax. This tax differs from a sales tax because the business pays the tax, not the customer.

In states with sales tax, businesses add sales tax to the price charged to customers and then remit that amount to the state. In contrast, New Mexico assesses the gross receipts against the businesses themselves.

That said, many businesses charge extra to pass the cost of the gross receipts tax onto customers. From the customer’s perspective, the two taxes look the same.

The minimum gross receipts tax rate is 5.125%. It may be higher in some areas, up to a maximum of 8.8675%.

As a business owner, you may pay yourself wages or a salary or receive all or a share of the business’ income.

If you do not pay yourself through a formal payroll system that deducts federal income tax and payroll taxes, you might have to pay self-employment tax on your income.

Self-employment tax and payroll taxes contribute to Social Security and Medicare. With payroll taxes, the employer matches the amounts withheld from employee paychecks.

Self-employment tax is the same rate as payroll tax, but you are responsible for it. The current rate is 15.3% of your net earnings. This consists of a 12.4% rate for Social Security and 2.9% for Medicare.

If your LLC has employees, possibly including yourself, you may be required to withhold federal income tax and other taxes from their paychecks and pay additional payroll taxes.

You must withhold 7.65% of each employee’s pay — 6.3% of this is for Social Security, and 1.45% is for Medicare. As the employer, you are responsible for matching this amount.

The IRS refers to amounts withheld from employee paychecks as “trust funds” since you hold that money in trust for your employees’ tax obligations. Failure to promptly send trust fund amounts to the IRS is something the IRS does not take lightly.

Typically, employers send withheld amounts to the IRS monthly and file Form 941 every calendar quarter.

If you choose to have your LLC taxed as a corporation, you may be required to pay a corporate franchise tax, which is typically $50 per year.

4. Get Business Insurance for Your LLC

Just as you wouldn’t leave your home without coverage, your LLC also needs the right business insurance to guard against potential risks and liabilities. Insurance protects your company’s assets and ensures financial stability in case of unforeseen issues or legal claims.

Your insurance needs will vary based on your business operations.

For example, general liability insurance covers risks such as slip-and-fall accidents or property damage if your LLC operates from a physical storefront.

Conversely, if you run your business as a consultant and work remotely, you might only need professional liability insurance to cover potential service errors or omissions. Assessing your business needs helps you choose the appropriate coverage to protect your LLC.

5. Setup Your Business Online Presence (optional)

Creating an online presence for your LLC can significantly boost your visibility. Start by building a professional website with information about your products or services. Make sure the site is user-friendly and mobile-responsive.

Consider using social media to engage your audience. Platforms like Facebook, Instagram, and LinkedIn can enhance your visibility.

New Mexico LLC vs. S Corp vs. Partnerships vs. Sole Proprietorship vs. Corporations

When starting a business in New Mexico, you have several choices for its structure. Each has its features, benefits, and drawbacks.

Sole Proprietorship

A sole proprietorship in New Mexico is the most straightforward way to start a business. Imagine you’re running a lemonade stand on your own. You make all the decisions and keep all the profits.

However, there’s no legal separation between you and your business. If your lemonade stand faces financial trouble or legal issues, your assets, like your car or home, could be at risk. It’s easy to set up and manage, but it does leave you personally responsible for any business debts.

Partnership

A New Mexico partnership involves teaming up with one or more people to run a business together.

Think of it as joining forces with a friend to open a café. You share the profits and responsibilities, and you both make business decisions.

However, like a sole proprietorship, each partner is personally liable for any business debts or legal issues. If the business encounters financial trouble, your assets could be at risk, too. Partnerships are relatively easy to set up but require clear agreements between partners to avoid conflicts.

LLC (Limited Liability Company)

An LLC offers a blend of flexibility and protection.

Picture it as a protective umbrella over your lemonade stand. This structure separates your assets from your business, so if your LLC faces legal issues or debts, your personal belongings are generally safe.

LLCs are more formal than sole proprietorships or partnerships but offer flexibility in management and tax treatment. They are ideal for small—to medium-sized businesses that want liability protection without the complexity of a corporation.

S-Corporation

An S Corporation is a more structured business form.

Think of it as a business where owners are shareholders, much like a small-scale company with multiple investors. It protects liability and allows profits to pass through to your tax return, avoiding double taxation.

This means you report the income and losses on your tax return, which can be beneficial for tax purposes. However, S Corps have stricter operational requirements and formalities compared to LLCs.

Corporation

A New Mexico corporation is the most complex structure, suitable for larger businesses aiming for significant growth. Imagine a big company with many shareholders.

A corporation offers robust liability protection and is a separate legal entity from its owners, meaning your assets are protected.

Corporations can raise capital more efficiently by issuing stock and can offer employee benefits. However, they come with extensive regulatory requirements, formalities, and paperwork, making them more suitable for businesses with significant resources and expansion plans.

My Final Thoughts: Forming an LLC in New Mexico

Starting an LLC in New Mexico is an exciting step toward bringing your business idea to life. Although it might seem like many steps initially, breaking them down makes the process more manageable and ensures you cover all the essential bases.

Starting an LLC in New Mexico involves several key steps:

• Choose a unique name for your LLC.
• Select a registered agent to handle legal documents.
• File the Articles of Organization with the state.
• Draft an operating agreement, though it is not required.
• Obtain an EIN from the IRS
• Obtain New Mexico Business Tax Identification Number for your LLC
• File a BOI Report with FinCEN

The filing fee for the Articles of Organization is $50. You are not required to file an annual report in New Mexico.

Learn More About Starting an LLC in New Mexico

If you need additional help to start an LLC in New Mexico, check out these valuable resources:

Frequently Asked Questions

Can I change my registered agent in New Mexico?

Yes, you can change your registered agent in New Mexico. You need to file a form with the Secretary of State and provide the details of the new agent.

How do I change my New Mexico LLC’s name?

To change the name of your LLC, you must file a fee-based amendment with the New Mexico Secretary of State.

How do I renew my New Mexico LLC?

You do not need to file an annual report for your LLC in New Mexico.

How do I dissolve an LLC in New Mexico?

To dissolve your LLC, you must file a Certificate of Cancellation with the Secretary of State. Before filing, make sure all debts and obligations are resolved.

How do I add a member to a New Mexico LLC?

To add a member, you must update your operating agreement and file any necessary updates with the Secretary of State. Ensure that all members agree to the changes.

How do I add a DBA to an LLC in New Mexico?

Unfortunately, New Mexico does not allow businesses to register an additional name as a DBA. Choosing a good name for your LLC is, therefore, very important.

Can a minor own an LLC in New Mexico?

Yes, a minor can technically own an LLC in New Mexico. However, legal representation is often required to manage business affairs.

What is the Cost of the New Mexico Annual Report?

New Mexico is one of the few states that doesn’t require LLCs to file (or pay) an Annual Report.

Does LLC expire in New Mexico?

An LLC does not expire if you keep filing the required documents and pay the annual fees. Failure to do so can lead to dissolution.

Can a non-resident open an LLC in New Mexico?

Yes, non-residents can open an LLC in New Mexico. There are no residency requirements for LLC owners.

Can I buy a house or car with my LLC in New Mexico?

Yes, you can buy a house or car in the name of your LLC. This can provide liability protection and potential tax benefits.

Can you have multiple businesses under one LLC in New Mexico?

Yes, you can operate multiple businesses under one LLC in New Mexico. However, this can complicate liability and finances.

Is New Mexico a good state to form an LLC? Is it worth it?

Many business owners find New Mexico a favorable state because of its lower fees and flexible regulations. Depending on your needs, it may be worth considering.

Can one person form an LLC in New Mexico?

Yes, one person can form an LLC in New Mexico. This is known as a single-member LLC, which is a common choice for small business owners.