LLCs are governed by New Mexico Code – Chapter 53, Article 19 Limited Liability Companies.

New Mexico LLCs

The New Mexico LLC is one of our favorite LLCs. A New Mexico LLC has great asset protection laws that govern it, protecting the LLC from the members.

The details of a New Mexico LLC for asset protection:

  • New Mexico only charges $50 to form a New Mexico LLC. Very reasonable.
  • New Mexico currently does not have annual reports for New Mexico LLCs.
  • New Mexico LLC formations are simple and require little information on the Articles of Organization. New Mexico LLCs are under the New Mexico Code, Chapter 53, Article 19, Limited Liability Companies. It states that you must have a business name with an LLC ending, an organizer (Which doesn’t have to be you), New Mexico Registered Agent, a principal office, the duration of the LLC.

We encourage you to read through our entire page if you’re thinking about an asset protection LLC in New Mexico.

New Mexico LLC Advantages

New Mexico LLCs offer distinct benefits:

  • One-time filings
    You only need to form the LLC in New Mexico. There is no other maintenance or licenses to file after you complete the Articles of Organization. New Mexico LLCs do not have annual reports.
  • Inexpensive
    Unlike other states with high formation and annual report fees, New Mexico LLCs only cost $50 to form, and there are no annual business entity fees.
  • Simplicity
    Of all the state LLCs to choose, New Mexico LLCs are by far the easiest to maintain. No annual reports and simple Articles of Organization requirements. New Mexico LLCs make starting and maintaining a business a simple, one-time task.
  • Asset Protection
    New Mexico has some of the best limited liability coverage for an LLC (explained in depth below), especially when it comes to protecting LLCs from other members.

When we form New Mexico LLCs, we include:

  • Custom drafted articles of organization specific to creating a New Mexico LLC
  • We sign as the organizer
  • 1 year registered agent service from us, not a random name listed as your agent
  • Initial resolutions
  • A New Mexico LLC operating agreement customized for asset protection
  • The $50 New Mexico State filing fees
  • We only charge $100 for our services. Your total package is $275 and we get New Mexico LLCs filed within 3 days.
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How do I fund a New Mexico LLC with assets?

Typically, you would fund the LLC with something when you form it. Assets, property, cash, etc… It would be best if everything is titled in the New Mexico LLC name as well. There is specific code under Section 53-19-29 of the New Mexico Statutes that states, “Property may be owned by a limited liability company, even though the property is not acquired or held in its name.”

It is always best to either fund the LLC now with your assets or cash. And then purchase any future assets with the LLC’s money. If you need to get money into the LLC, you can always personally make an additional contribution at any time.

If you’re trying to get cash into the New Mexico LLC, you fund it by the member(s) putting money into the company in exchange for a membership interest. Everything put into the company initially should be documented in your operating agreement. If you don’t have the business checking account set up yet to physically put the money in a different account, simply making written note of this on the operating agreement is legally binding you to this agreement. Eventually you will need to get the money into a separate checking account.

If you have actual physical assets that are titled and deeded, you’ll have to go through the various processes to get those assets recorded under the new New Mexico LLC name.

If you have assets that aren’t titled or recorded somewhere, you can simply make note of that and assign a value of those dollars in your initial contributions to the LLC. You can add to the assets of the New Mexico LLC at any time. To maintain asset protection, it is important to maintain strict separation of personal assets and business assets. Having your New Mexico LLC own your home and the belongings inside it is fine, but you must actually rent or lease these things from the New Mexico LLC. This can be as simple as a once a year payment. But there truly needs to be money exchanged, and do not spend money out of a New Mexico LLC “Business” account on truly personal needs. Intermingling funds and resources is what causes corporate veils to be pierced.

Do I need an EIN for my New Mexico LLC?

That depends. If you want to just hold some assets in this company, you won’t need one unless you make profits on them. If you make money with the New Mexico LLC, you’ll have to get a tax ID number.

We can get federal tax id numbers for you for an additional $50. You can add that in the special services section at the bottom of the sign up form. We can establish the federal tax id number for you within days of getting your New Mexico LLC processed by the State.

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Does my LLC have to pay taxes to New Mexico?

If you do not derive money from New Mexico and are not a New Mexico resident, you won’t have nexus in New Mexico and owe New Mexico income tax. (Disclaimer!! We’re not tax or legal professionals and this should be taken generally and not specific to your situation.)

New Mexico does have a personal income tax of 4.9% on net taxable income over $12,000. But this is only if you live in New Mexico. You’ll pay local income tax to wherever you live. Not New Mexico. Establishing a holding company in New Mexico does not create nexus just for forming a company. You or your company would actually have to live or make money there to pay tax to NM.

Article 2, Section 7-2-1 of the general income tax provisions discusses who pays income tax in New Mexico. The general link to all the New Mexico taxation laws is here: New Mexico Statutes.

How do I know it’s my LLC if my name isn’t on the articles?

New Mexico doesn’t require organizers to list LLC members’ names or addresses when forming an LLC, so many people wonder if they have a filing service form their company, how does anyone know who actually owns it. When we form your New Mexico LLC, we custom draft the New Mexico LLC articles of organization. We then include the initial resolutions showing a chain of signing authority to you, the members or managers. We also include a New Mexico LLC operating agreement where you document all members and managers, as well as the contributions and membership interest percentages of each member.

What if I get a personal judgment against me as a member?

One of the benefits of the New Mexico LLC is the asset protection it allows the LLC from the members and managers as well as the preservation of assets inside the LLC, to protect the LLC from the members and managers personal problems.

The standard LLC operating agreement and articles of organization will not protect the LLC from its members to the fullest extent available under the New Mexico LLC law. Our custom drafted New Mexico LLC articles of organization and New Mexico LLC operating agreement are specifically drafted to protect you as much as possible within the law.

If you get a judgment against you personally and you own a membership interest in a New Mexico LLC, the creditor will try to compel the Court to award it your membership interests.

Section 53-19-32 of the New Mexico Statutes states a few things of interest:

  • A membership interest is assignable.
  • A creditor that wins a Court judgment on a member of the New Mexico LLC and the Court approves an assignment of that member’s interest does not automatically make the creditor a member.
  • An assignment entitles the assignee only to the distributions that may have come to that member’s membership interests.
  • A lien, security interest, or other encumbrance against a member is not an assignment! This means that just because the member may personally have all kinds of judgments against the member, a Court would have to specifically award the members creditors an assignment of membership interests.

Section 53-19-33 discusses the rights of an assignee to become a member:

  • The Creditor that wins an assignment of member interests from a Court may not become a member unless all members unanimously consent
  • There are provisions allowing the assignee to be liable for any agreements a member has to continually fund the LLC. This may be a bargaining point, because the member is not required to turn over membership in the LLC. If you are bound to continually fund your New Mexico LLC every year with money, the creditor may not want to take over the member interests. The downside of this would be that you would have it in writing that you would fund the New Mexico LLC according to your agreement, creating a set of rules for you to keep up with.

Section 53-19-35 discusses the rights of a judgment creditor of a member:

  • The court may charge the interest of the member with payment of the amount of the judgment, with interest. It limits the rights The judgment creditor’s only rights are the same as an assignee of the member’s interest.

Basically, you’re pretty well covered. The only LLC with better Statutes is Wyoming. The thing that is missing from New Mexico law is hammering down a few more specific details. The thing that is great about Wyoming LLC law is that it specifically states that the “ONLY” remedy of a creditor is to get a Court to award a judgment against the member’s distributions. New Mexico does not specifically state this, so some could argue that someday a Court could interpret these laws differently and pierce the corporate veil in an extreme fraudulent case. In written laws, the more specific they are, the less room for random interpretations there are. Overall, the New Mexico LLC is a little cheaper on an annual basis and has REALLY good asset protection laws that govern it.

How much does an NM LLC cost each year?

LLCs do NOT have to file NM biennial reports with the state.

What are the taxes for an LLC in New Mexico?

NM LLCs have to pay New Mexico taxes. There is a minimum franchise tax due of $50.

The New Mexico personal net income tax rates are:

$0-5,500 1.7%
$5,500-11,000 3.2%
$11,000-16,000 4.7%
$16,000 + 4.9%

The average New Mexico sales tax rate is 6.4%. The state has a 5% tax, but the average local tax is 1.4% making a total of 6.4%.

Do I need a New Mexico registered agent?

You will need  to list a registered agent in your NM articles of organization

Is there anything else I should know about the New Mexico LLC?

The following information can be helpful if you need to make additional New Mexico LLC filings in the future:

What other LLC forms will I need?

The forms and information above are helpful if you need to file documents with the Secretary of State, but what about internal business of the LLC? The following LLC Forms will be useful in managing your business.

Should I form a New Mexico LLC?

If you still aren’t sure about forming a New Mexico LLC, we suggest comparing it with the  New Mexico Corporation.

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