State Processing Times and Fees
Nearly every state has standard processing times for corporate formations, but not all provide expedited processing times. Check with us for the average wait times for both standard and expedited filings in New Mexico.
New Mexico charges a filing fee for incorporating. Visit "compare pricing" in our incorporation center to see all New Mexico's state fees.
Deciding Between a New Mexico C-Corp or S-Corp Tax Designation
There are similarities between a New Mexico S Corp and a C Corp regarding personal liability, management, structure and compliance. The differences come down to the following:
- Ownership Rules: A C Corp is taxed as a separate entity from its shareholders. Shareholders report and pay taxes on what the corporation pays them. An S Corp is taxed like a partnership with a "pass-through" tax structure. It's not doubly taxed because it can pass corporate income, losses, deductions and credits to its shareholders. Corporate owners pay taxes on their shares of the corporation's profits, and they're taxed at their individual rates. To qualify as an S Corp, your business must be a domestic corporation, provide only one class of shares, have no more than 100 shareholders, and your shareholders can include only individuals, certain trusts, and estates.
- Documents: If you want to form an S Corp, you must file IRS Form 2553 to elect this status.
Personnel Requirements
Each state has its own personnel requirements for incorporating. In New Mexico, your corporation must meet the following requirements:
- Age requirement: There is no minimum age requirement for directors.
- Number of directors: At least one director is required.
- Officers: There must be a president, secretary and treasurer.
- Residency: There is no requirement that directors must live in New Mexico.
- Inclusion: The names and addresses of directors must be listed in your Articles of Incorporation.
Other Requirements for Your Articles of Incorporation
Along with personnel requirements, your New Mexico Articles of Incorporation must meet a few other requirements.
New Mexico requires that you appoint a registered agent. A registered agent is the person or business who receives important tax, government and legal documents for your corporation, including service of process of lawsuits. Your agent must be available during normal business hours.The name of your registered agent must be included in your Articles of Incorporation, and your agent must have a physical address in the state. Your corporation cannot act as its own registered agent. We can help you designate your registered agent when you incorporate with us.
You must also include the following in your Articles of Incorporation:
- The number of shares authorized to be issued
- The designation of each class and series of shares
- Statements as to the relative rights and authority of the board of directors to divide or change the designation of such shares
- Any shareholder preemptive rights
Your Articles of Incorporation must be filed with the New Mexico Public Regulation Commission, Corporations Bureau.
Other Required Paperwork
New Mexico requires that you file an initial profit corporate report within 30 days of incorporation. A biennial report must also be filed with the New Mexico Department of State on or before the fifteenth day of the third month following the end of your tax year. A franchise tax must also be paid by this date, along with any corporate income tax. Your corporation must also provide its shareholders with an annual financial statement.
Guidelines for Your Name
Your corporate name must be unique, and it should make a statement about your business. Make sure it complies with the following New Mexico requirements:
- Your name must be distinguishable from that of any other registered business in New Mexico. It must end with an approved designation, such as "Corporation," "Company," "Incorporated," "Limited," or an abbreviation of one of these terms.
- Your name can't be deceptive. If you're selling jewelry, don't name your company "Del Gato's Internet Cafe."
- Ensure that your name is distinguishable from that of any other existing corporation.
New Mexico Corporate Taxes & Reports
Unfortunately, you do have to pay taxes for your new corporation. Before getting started, apply to the IRS for an employer identification number, or EIN. An EIN is similar to a Social Security number, but it's for businesses. All corporations with employees must have an EIN. You'll also need an EIN to open a corporate bank account.
Many business owners choose S Corps because they're generally exempt from federal corporate income tax. C Corps offer more flexibility because you can have several classes of shareholders with different voting rights, but there are tax implications.
Keeping Corporate Records and Ongoing Filing Requirements
New Mexico requires that you create certain corporate records to maintain your corporate status. Bylaws set forth your company's operating rules, and they define the responsibilities of your directors, the rights and powers of your shareholders, and address all other corporate matters. You'd don't have to file your bylaws with the state, but you'll need them to demonstrate to banks, lending institutions, creditors, the IRS and the courts that your corporation is valid and legitimate. Bylaws also help to establish rules so you can keep corporate assets and debts separate from your personal ones.
New Mexico also requires that corporations keep minutes of director and shareholder meetings, as well as their most recent annual reports, a list of names and addresses of the directors and officers, the Articles of Incorporation along with any amendments, and their bylaws at their corporate offices. Corporate minutes keep track of all votes on important business decisions and help secure your corporate status. We have more specific information regarding New Mexico's requirements for bylaws and corporate meeting minutes.
Best of luck with your New Mexico corporation! We have all the legal documents and information you'll need to get started.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.
