How to start a New Mexico LLC

An LLC is a type of business that helps protect its owners (called members). This means that if the business owes money or gets sued, the members' personal assets, like their house or car, are usually safe. 

In the state of New Mexico, an LLC is defined as “an organization formed pursuant to the provisions of the Limited Liability Company Act” (53-19-2(I)). That means an LLC in New Mexico is a company created within the state or a company that becomes subject to New Mexico's state regulations surrounding LLCs (Article 19).

If that sounds like a lot of legal jargon - that's because it is! What you need to know is that LLCs are popular with business owners because they are simple and flexible to run. They have fewer rules compared to comportations and the owners can choose if they want to manage the business themselves or appoint managers to do it. 

Another benefit is how taxes work: LLC owners can pay taxes through their own personal tax returns, or they can choose to have the business pay taxes separately, like a corporation. This gives owners more choices in how they handle taxes as their business grows.

Why should I register for an LLC in New Mexico?

You may want to register for an LLC in New Mexico when:

• You own or want to start a business in New Mexico, or want to expand an existing business into New Mexico, and want to stay legally compliant. 
• You own or want to start a business, and want more flexibility on how you will manage the business or pay taxes than a corporation would provide.
• You want to protect your personal assets from potential liability resulting from business you conduct in the state of New Mexico. 
• You own or want to start a business, and want to register in New Mexico to open accounts, lease or buy property, secure funding, or hire employees.

Do I need to file my LLC in New Mexico if I live in another state?

Any LLC that does business in New Mexico must register with the State of New Mexico. New Mexico does not outline any specific actions that constitute transacting business, however, these actions, among others, are not considered to be doing business in New Mexico:

• Maintaining, defending or settling any proceeding.
• Holding meetings of its members or carrying on any other activities concerning its internal affairs.
• Maintaining bank accounts.
• Maintaining offices or agencies for the transfer, exchange and registration of the foreign limited liability company's own securities or interests or appointing and maintaining trustees or depositories with respect to those securities or interests.
• Selling through independent contractors.
• Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside New Mexico before they become contracts.
• Creating as borrower or lender or acquiring indebtedness or mortgages or other security interests in real or personal property.
• Securing or collecting debts or enforcing rights in property securing debts.
• Investing in or acquiring, in transactions outside New Mexico, royalties and other non operating mineral interests; executing division orders, contracts of sale and other instruments incidental to the ownership of such nonoperating mineral interests; and, in general, owning, without more, real or personal property.
• Conducting an isolated transaction that is completed within thirty days and that is not one in the course of repeated transactions of a like nature.
• Transacting business in interstate commerce.

LLCs based in New Mexico are called "domestic LLCs," and out-of-state LLCs are called "foreign LLCs." Foreign LLCs and domestic LLCs may have different filing and compliance requirements -- Rocket Lawyer can help you navigate foreign LLC registration, regardless of where you live.

How to start an LLC in New Mexico

1. Find a unique name for your New Mexico LLC

The state of New Mexico says that the names of all LLCs in the state:

• Shall contain the words "limited liability company" or "limited company" or the abbreviation "L.L.C.," "LLC," "L.C.," or "LC." The word "limited" may be abbreviated as "ltd." and the word "company" may be abbreviated as "co."
• Are not too similar to existing LLCs in the state. You can search the state of New Mexico's database of business entities in the state to ensure your business' name is unique.

Rocket Lawyer can help you determine whether your business' name is eligible for registration in New Mexico and may be able to help you reserve the name before you file your LLC.

2. Include your other LLC members (if any)

In New Mexico, you can in fact form as a one-person LLC. In this case, the LLC would be referred to as a single-member LLC (SMLLC), whereas if there is more than one owner, the LLC may be called a multi-member LLC. 

The main difference between single-member and multi-member LLCs lies in ownership structure and management. With a single-member LLC, you have full control over the business. In contrast, a multi-member LLC has multiple owners, each with a specific percentage of ownership as defined in the operating agreement. This means that in a multi-member LLC, owners share profits, losses, and tax responsibilities based on their ownership percentage.

3. Provide a New Mexico address

This will be used as your official LLC address. The address that you list may either be your home, an office, or another physical location, but it cannot be a PO box.

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. Register your LLC with the state of New Mexico

Once you have a business name and registered agent, you can register your business as a New Mexico LLC with the state of New Mexico by filing your Articles of Organization. This document may be referred to informally as an LLC's "Articles," or in other states, it may be called a "Certificate of Organization," "Certificate of Filing," or "Certificate of Formation."

6. Get an Employer Identification Number (EIN)

New Mexico LLCs are required to have a Federal EIN tax number. Think of your tax ID as the social security number for your company. It will be important for business contracts, tax filings, and all manner of documents down the line. Every company should have one to remain in good standing.

7. Pay the state filing fee

Every state has different fees for forming an LLC, which can also vary from one year to another.

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

What to do after forming a New Mexico LLC

There are a few steps you need to take to maintain your New Mexico LLC:

1. Create an Operating Agreement: we can help you create your New Mexico LLC Operating Agreement online.
2. Hold a meeting: a first meeting with members of an LLC is not required by law, but it is highly suggested in order to get organized. Also, unlike corporations, LLCs are also not required to maintain Meeting Minutes, but these documents are also recommended as they provide records for important decisions made.
3. Pay taxes according to how you chose to be taxed: traditionally, LLCs are "pass-through entities." This means that you pay your business taxes on your personal tax form. That said, you can elect to be taxed like a corporation, if you choose to do so.

New Mexico does not require LLCs to file annual reports, so there is no regular maintenance in the form of annual reports required.

What is needed to keep records for my New Mexico LLC

The State of New Mexico requires the following information to be kept at the LLC's primary place of business:

• A list of the names and last known mailing addresses of all present and former members and managers.
• A copy of the company's articles of organization and all amendments put forth.
• Copies of the company's federal, state and local income tax returns for the last three years.
• Copies of the company's financial statements from the last three years.
• Copies of all current and former Operating Agreements, including any amendments made to these agreements.
• Unless included in your Operating Agreement or articles of organization, you'll need to keep the following records:
  • A current statement of any capital contributions members have made.
  • A statement of the services, cash and property that each member has agreed to contribute or contribute in the future. This should also include the outstanding principal balance of any promissory note attributed to a capital contribution as well as the amount of the capital contribution the member should be credited upon receiving said property or services.
  • A statement that specifies under which circumstances members will make additional contributions or withdrawals from capital.
  • Any other documents or writings that are required to be made available to members under the company's articles of organization or Operating Agreement.

You'll also need to notify all members of the location of your records.

Still have questions? Rocket Lawyer can help you with the process of forming a New Mexico LLC. Get started today!

  

Key takeaways Registering an LLC in New Mexico can give you a lot more flexibility than a corporation, as well as protection for your personal assets from potential liabilities. Even if you live in another state, you must register your LLC in New Mexico if you do regular business there, like selling things or having employees. After starting your LLC, it's advisable to create an Operating Agreement and hold a first meeting.  Keep records of your New Mexico LLC, like the names of all members, tax documents, and your business rules. These help you stay organized and follow the law.

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 an LLC
• How are LLCs taxed
• How to start an LLC
• Do I Need a Registered Agent?
• How and when to file an Annual Report