How to Start an LLC in New Mexico
To start an LLC in New Mexico, you must file Articles of Organization with the Business Services Division. You can file the document online or by mail. The Articles of Organization cost $50 to file. Once filed with the state, this document formally creates your New Mexico LLC. However, to actually ready the LLC to do business, you must complete several additional steps.
Starting a New Mexico LLC Guide:
- Choose your New Mexico LLC filing option
- Submit the New Mexico Articles of Organization
- Create a New Mexico LLC Operating Agreement
- Get a Federal EIN from the IRS
- Open a New Mexico LLC bank account
- Obtain any required business licenses
- Fund your New Mexico LLC with assets
- Pay taxes on the LLC income
New Mexico LLC Filing Options
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New Mexico LLC Articles of Organization free download. When you're done filling out the form, submit it to your state.
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New Mexico Articles of Organization Requirements
To form a New Mexico LLC, you must complete and file the Articles of Organization with the Business Services Division. See the document below and click on any number to see what information is required in the corresponding section.
Your name must end with “Limited Liability Company” or an abbreviation. Tip: Most businesses keep it short and sweet with “LLC.”
Want your business to continue indefinitely? Choose “perpetual.” Prefer to put a self-destruct timer on your business? Enter either an end date or how many years you want to exist. Tip: Most LLCs are perpetual.
You can either list an individual NM resident (such as yourself) or an authorized NM business that provides registered agent service (such as Northwest Registered Agent). Tip: We’re fans of Northwest.
This New Mexico street address will become part of the permanent public record of your LLC. Tip: Hire Northwest and our address will go here.
Your principal place of business must be a street address. Tip: If you don’t enter anything, the state will use your registered agent’s address as your principal place of business.
Indicate if your New Mexico LLC is managed by members or managers. In a member-managed LLC, members make all the decisions. In a manager-managed LLC, decision-making power is turned over to one or more managers (which is great if you don’t run the day-to-day operations but not so great if you want to have a say in decisions). Tip: Most LLCs are member-managed.
Skip this section and your LLC will begin upon filing. Want to push out your start date (maybe the next tax period is on the horizon)? You can list an effective date up to 90 days in the future. Tip: Most LLCs skip this section.
Someone has to sign and submit your Articles of Organization, and that person is your organizer. Your organizer doesn’t have to be a member, manager or anyone connected to your LLC. Tip: When you hire Northwest, we’ll be your organizer.
For paper filings, you’ll submit two documents in addition to your Articles of Organization: a Registered Agent Consent form and a Document Delivery Instructions form. The consent form must be signed by your registered agent. The document delivery instruction form lets the state know how you’d like to receive your approved documents.
How much does it cost to start a New Mexico LLC?
The Business Services Division charges $50 to file Articles of Organization.
When you hire Northwest, your total, out-the-door cost is $275, including state filing fees, key business forms, and a full year of registered agent service.
How much does an LLC in New Mexico cost each year?
$0 in state filing fees. Unlike corporations, New Mexico LLCs do NOT have to file NM biennial reports with the state.
How long does it take to start a New Mexico LLC?
If you file your Articles online, you’ll receive your Certificate of Organization in your email in a day or two. Have some time to kill? Forgo online filing and mail your Articles of Organization. In a few weeks, the Business Services Division will eventually input and process your filing.
If you hire Northwest to start your LLC, we file online and typically have your New Mexico LLC formed within 2 business days.
Does a New Mexico LLC need a registered agent?
Yes, the name and address of your New Mexico registered agent must be included in your Articles of Organization and will become part of the permanent public record of your New Mexico LLC. Your registered agent is responsible for being available at the address listed during business hours.
Keep your privacy and avoid being tied to your desk when you hire Northwest. We’ll list our name and address in your Articles instead of yours. We’ll also accept, scan and send any legal notifications the same day.
Create the New Mexico LLC Operating Agreement
Do I need an Operating Agreement?
Absolutely. While operating agreements are important for every LLC, they’re critical for New Mexico LLCs. New Mexico LLCs are remarkably private—public filings, like Articles of Organization, don’t require you to list members or managers as part of the record of your LLC. This makes it all the more important that members and managers (along with their contributions and membership interests) are recorded in your LLC’s internal documents.
And we can’t hammer this home enough—New Mexico has some of the greatest asset protection laws for LLCs in all of the United States. And where are all of your assets recorded? In your operating agreement. The specifics of your operating agreement can play a huge role in your level of protection.
Do I have to write the Operating Agreement?
Not from scratch. When you hire Northwest to form your New Mexico LLC, we give you a custom-drafted operating agreement specifically designed to ensure your LLC has as much protection as is available under New Mexico LLC law. We also give you other free forms to help you manage your business. Take a look:
Get a New Mexico LLC EIN
Do I have to get a tax ID number (EIN)?
That depends. If you want to just hold some assets in this company, you won’t need an EIN unless you make profits on the assets. If you make money with the New Mexico LLC, you’ll have to get a tax ID number.
We can get a federal tax ID number for you for an additional $50. You can add that in the special services section at the bottom of our 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.
Open a Bank Account for Your New Mexico LLC
To open a bank account for your New Mexico LLC, you will need to bring the following with you to the bank:
- A copy of the New Mexico LLC Articles of Organization
- The LLC operating agreement
- The New Mexico LLC’s EIN
If there are multiple members in the LLC, you may also want to bring an LLC resolution to open a bank account that states that the person going to the bank is authorized by the members to open the account in the name of the LLC.
We recommend calling your bank ahead of time before going in and asking what their requirements are. Most banks don’t open business accounts nearly as frequently as personal accounts, so some bankers may be unfamiliar with their own bank’s requirements. As frustrating as that may be for you, calling ahead will help save you from being super annoyed when you walk into the bank.
Obtain a Business License
Does a New Mexico LLC need a business license?
New Mexico doesn’t require a general, statewide business license, but you may need a local license for cities and counties where you engage in business. For example, if you conduct business in Bernalillo County, you’ll need either a commercial or residential business license.
Fund Your New Mexico LLC with Assets
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 a specific code under Section 53-19-29 of the New Mexico Code 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 fund the LLC at the beginning 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 your business checking account set up yet (so you can physically put the money in a different account), simply making written note of this in the operating agreement is legally binding. 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.
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.
- If a creditor wins a Court judgment on a member of the New Mexico LLC, and the Court approves an assignment of that member’s interest, it 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 member’s 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. This limits the rights of the creditor. 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 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.
Pay the LLC Taxes
What are the New Mexico LLC taxes?
The New Mexico personal net income tax rates for single filers are:
1.7%: $0 to $5,499
3.2%: $5,500 to $10,999
4.7%: $11,000 to $15,999
4.9%: $16,000 +
New Mexico also has a corporate franchise tax—a tax for the privilege of doing business in the state. If your LLC is taxed as a corporation (including an S corporation), you’ll have to pay the state’s franchise tax. The minimum franchise tax fee is $50.
The New Mexico state sales tax rate is 5.125%, but the addition of local sales taxes makes the average total sales tax rate 7.081%.
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 information should be taken generally as it’s not specific to your situation.)
New Mexico does have a personal income tax of 4.9% on net taxable income over $16,000. 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 New Mexico.
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.