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The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in New Mexico. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in New Mexico without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.

Related: How Does an LLC Protect You?

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration and management flexibility.

Forming an LLC in New Mexico is fairly straightforward, but it’s nice to have some support in case you have questions or get stuck.  IncFile and Inc Authority provide LLC formation guidance for only the cost of the state fees!

Related: Should you use a Formation Service, Hire an Attorney or Do it Yourself?

To form a Limited Liability Company in New Mexico, file the Articles of Organization with the New Mexico Secretary of State.  The LLC filing fee is $50.

Approval for the LLC typically takes between 2-3 weeks when filing by mail and 2-3 days when filing online.

HOW TO FILE THE ARTICLES OF ORGANIZATION AND FORM A NEW MEXICO LLC

Step 1: Create an Account

Begin by creating a user account with the New Mexico Secretary of State’s Corporations and Business Service’s website.

How to form an LLC in New Mexico

 

Step 2: File for an LLC

Place your cursor over “Corporations” in the top menu and then select “Domestic (NM) LLC Formation.

New Mexico LLC Registration

 

Step 3: Select Entity

Entity Type -Make sure “Domestic Limited Liability Company” is still selected in the drop-down box.

Entity Name – Enter the proposed name you want for the LLC.  The name of the LLC also has to differ from other entity names registered with the Secretary of State.  You can check on available New Mexico LLC names before filing to be sure the one you want is available or if you in the process of filing, use the “Entity Name” field to search the database.

Additionally, the name of the LLC must include one of the following designators at the end of the business name:

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

A comma may be used after the business name and before the designator.  “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.

Enter the name you would like to use, along with the designator in the “Proposed Limited Liability Company Name and Name Ending” field. Before settling on a name, you may want to see if a domain name is also available in order to match your business name and website address.

Register an LLC Name in New Mexico

Step 4: Purpose & Duration

Effective Date Request – If you want the LLC to start immediately, choose today’s date.  If you want to LLC to start later, enter a date less than 90 days in the future to start.  The main reason for delaying the LLC start date is when the filing is being done close to the end of a calendar year and the business isn’t going to have any activity until the start of the year.  By delaying until the following year they will reduce the number of end of year filings.

Period of Duration – If you intend the business to exist forever, which most businesses do, leave “Perpetual” selected.  If you have a specific end date in mind (typically used for investment-related businesses) choose how long the LLC will operate after selecting “The period of duration is”.

Purpose

NAICS – This section is optional and asks for information regarding the activities of the business.  To do that, there is a number called NAICS (North American Industry Grouping Code).  This code is a six-digit number that classifies and categorize the different businesses.  This information is used in reporting statistical data for each of the industries in the U.S.  Remember this number as you will need it when filing annual tax returns.  Find your NAICS number here.

If the activities of your business aren’t specifically listed, choose one that is close.  The filing allows for up to three codes to be entered.

Business Purpose – Another optional section, the Secretary of State is asking for some basic information about what the business does.  Some will use a statement that keeps the business purpose open-ended that says “The LLC will and engage in any lawful business activity for which a Limited Liability Company may be organized in New Mexico”.

Related: How to Answer the Business Purpose Statement.

New Mexico LLC Purpose and Duration

Step 5: Registered Agent & Address Information

Initial Registered Agent – A New Mexico Registered Agent must be identified before forming an LLC.  The Registered Agent can either be a resident of New Mexico (Select “Individual”) or a Resident Agent service (Select “Entity”)  The agent cannot be its own agent, must have a physical address in the state (PO Boxes are not allowed) and act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of the LLC.

Even though the business owner can be the registered agent, their name and address become public record and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.

Entity Address and Contact Information – Enter your preferred email address and phone number (can be personal or business) for the Secretary of State to contact you.

Principal Place of Business – In this section, enter the street address, city, state and zip code of the initial principal office.  This address can be the physical address of the LLC or it can be the address where the business records are stored.  You may not use a PO Box for the principal place of business.  This address can be the same as the Registered Agent.

Mailing Address – If the mailing address is different from the primary place of business, enter that address in this section.  If the mailing address is the same as the principal place of business, click on the “Same as” box to copy an address that was earlier used.

New Mexico LLC Registered Agent

 

Step 6: Manager / Member Info

This section asks for the information for managers and members.

Managers, also known as a Manager-Managed LLCs are people hired by the members to run the LLC, similar to a CEO of a corporation.
Members are the owner(s) of an LLC.  An LLC managed by the members is known as a Member-Managed LLC.  In this setup, the members have an active involvement in the management of the LLC.

Most LLCs are member-managed and at least one member must be entered.  Learn more about the differences between a member-managed and manager managed LLC.

Member Managed Manager LLC

 

Step 7: Organizer Information

An LLC Organizer is someone involved with the formation of the Articles of Organization.  The Organizer may or may not become a member, such as a mentor, attorney or accountant, but any of the initial members could be listed as organizers.  Click the “Add Organizer” button and enter the Organizer’s information.

Additional Articles  – This is an optional section and not used by most LLCs.  Here you would include additional rules for the operation of the LLC.

Certify – One of the Organizers will certify the Articles of Organization.  Select the Organizer who will be certifying the Articles by checking the checkbox “Authorized by” in the earlier “Organizer Information”).

Organizer Information NM LLC

 

Step 8: Review

Review that all of the information is correct.  If there are no corrections, click “Accept”

Step 9: Pay and File

Pay and file the Articles of Organization.

In approximately 2-3 business days, the LLC will be approved.

Tasks After Forming Your LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare an Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, member responsibilities, how profits and losses are distributed and more.

Most states do not require an LLC to have an operating agreement but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit
  • Member’s personal liability protection may be diminished
  • Members may not have a full understanding of their roles and responsibilities which could lead to costly disputes in the future

Related: New Mexico operating agreement template

Obtain an EIN

The EIN or Employer Identification Number is a unique 9-digit number for a business. Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.  

The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes and more. 

Related: How to Apply for an EIN

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original formation paperwork from the state showing the creation of the LLC.
  • Driver’s licenses of the members.
  • Depending on the age of the LLC, a New Mexico Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC 

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be a variety of business licenses and permits to register for before starting. Some common registrations include:

  • Business License – Some cities require businesses to obtain licensing before they can start. In some cases, even home-based businesses must have licensing in order to legally operate. 
  • Professional License – Certain services such as barbershops, accountants, salons and others must be licensed.
  • Combined Reporting System Number (CRS) – All businesses in New Mexico must register with the Taxation and Revenue Department.

Related: What Business Licenses are Needed in New Mexico?