How to start a New Mexico corporation

It might seem like a lot at first, but once you understand the steps, it’s very doable. This guide will walk you through everything you need to know to start your New Mexico corporation.

How to start a corporation in New Mexico

Incorporating means registering your business as a corporation so the law sees it as its own entity, separate from you. Each state has its own rules for how to do this, so the process can seem confusing. Let’s go through each step: 

1. Choose a name for your New Mexico corporation

Your corporation’s name should be unique and 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.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation.

2. Decide between a New Mexico S-Corp and C-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, however, 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.

3. Appoint directors and shareholders for your New Mexico corporation

Each state has its own personnel requirements for incorporating. In New Mexico, corporations must have at least one director, and there must be a president, secretary, and treasurer. The names and addresses of directors must be listed in your Articles of Incorporation.

There is no minimum age requirement for directors. There is also no requirement that directors must live in New Mexico. 

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have a New Mexico address) or choose one to do that service for you (if you are not located in New Mexico or would like an extra layer of privacy).

5. File your Articles of Incorporation with the state of New Mexico

Once you have a business name and registered agent, you can register your business as a New Mexico corporation with the state by filing your Articles of Incorporation. This document may be referred to in other states as "Certificate of Organization," "Certificate of Filing," or "Articles of Organization."

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.

6. Get an Employer Identification Number (EIN)

Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. All corporations with employees in New Mexico must have an EIN. An EIN is similar to your Social Security number, but it's for businesses. You'll also need an EIN to open your corporate bank account.

Congratulations! After you have completed all these steps, you have formed your New Mexico corporation.

What to do after incorporating in New Mexico

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 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.

Still have questions? Learn more about how to start your own business with Rocket Lawyer and get started today!
 

Key takeaways Starting a corporation in New Mexico means following state rules, like choosing a unique name, filling out paperwork, and paying fees to make it official. One important choice is deciding how your corporation will be taxed in New Mexico, either as an S-Corp or a C-Corp. This affects how the business and owners pay taxes, and the differences between the two change from state to state. After forming the corporation, it’s required to keep records – like Bylaws and Meeting Notes – to stay in good standing with the state and prove your business is real and operating correctly.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is a corporation?
• What is an S-corporation?
• How are corporations taxed?
• How to start a corporation
• How to register a corporation by state