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, pay a $50 filing fee, and get an EIN from the IRS. The complete steps to forming a New Mexico LLC are as follows:
- File New Mexico LLC Articles of Organization
- Pay the New Mexico Business Services Division $50
- Wait to receive your Certificate of Organization
- Get a Federal EIN tax ID for the LLC
- Create a New Mexico LLC Operating Agreement
- Take these documents to the bank and get a New Mexico LLC bank account
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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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How to File New Mexico LLC Articles of OrganizationTo form a New Mexico LLC, you file the LLC Articles of Organization in the following steps:
What is the Cost of 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.Get Started
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.
Is a New Mexico LLC Registered Agent Required?
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.Get Started
New Mexico LLC Versus New Mexico Corporation:
There are distinct advantages a New Mexico LLC has over a New Mexico corporation (and frankly, over most LLCs throughout the US):
New Mexico LLCs are easy to start and maintain. LLCs have simple Articles of Organization requirements—and after you form your New Mexico LLC, the state doesn’t require any other maintenance. While corporations have to file annual reports, New Mexico LLCs do not. New Mexico LLCs make starting and maintaining a business a simple, one-time task.
- Inexpensive Fees
New Mexico LLCs only cost $50 to form compared to the minimum formation fee of $100 for corporations—and of course, there are no annual business entity fees.
- Asset Protection
While LLCs and corporations both have asset protection, New Mexico has some of the best limited liability coverage of any LLC in the United States (explained in depth earlier), especially when it comes to protecting LLCs from other members.
Do I Need a Tax ID Number (EIN) for a New Mexico?
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.
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.
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.
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 issues with members and managers.
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 in 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), a New Mexico registered agent, a principal office, and a duration (which can be perpetual) for your 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 Articles of Organization Requirements:
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.
Registered Agent Address
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.
Principal Place of Business
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.
New Mexico LLC Organizer
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.