How to Form a New Mexico LLC in 10 Steps
A Limited Liability Company (LLC) is a common business structure that allows one or more persons to own a portion of a company. Profits earned by the LLC are passed through to its members, and the LLC does not file a separate tax return the way a corporation does. An LLC also reduces the owner(s) exposure to liability from company activities.
Forming a Limited Liability Company is a straightforward process, but there are several steps you'll want to follow.
1. Choose Your Company Name.
Your first job is to choose a unique company name. You must have the rights to use this name, and it cannot be taken by any other business, especially in the state of New Mexico.
You can run your own name search if you like. Or, for a reasonable fee, SunDoc would also be happy to run your name search or reserve your LLC name.
It is also recommended that you check to see if your preferred name has a registered trademark on it.
2. Understand the LLC Organizer Requirement.
You can choose anyone to be your LLC organizer. An organizer is the person or company that drafts your LLC. By preparing on-line with us, SunDoc Filings will be your organizer. If you choose to prepare and upload your filing with SunDoc, you can name your own organizer.
3. Designate a Registered Agent.
You must designate a registered agent, either a person or a firm. This is required for the Articles of Organization form (see #6). For more information on registered agents and why your company must have one, see our article on Registered Agent Service.
4. Decide Your Ownership and Management Structure.
Within your Articles of Organization, you will have to pick one of the following choices, which will state how your LLC will be managed:
- Managed by all members
- Managed by multiple or one single manager
5. Create an Operating Agreement.
Most entity types like yours will need to create what's called an operating agreement. This document will drive your business legally and outline regulations, provisions, and overall rules for the governance of your business.
The operating agreement is extremely important as it handles things like fiduciary constraints, voting, the management of working capital, liability, profit payouts, legal matters, and other functional and financial business decisions.
You may also wish to consult an attorney for advice.
6. File the Articles of Organization.
Filing your Articles of Organization is your next step. If time is an issue for you or you prefer to hand this task off to a filing service, SunDoc can file your Articles on your behalf.
Your Articles of Organization provide essential company details to the state of New Mexico. Once they are accepted by New Mexico, your company will be officially created. Articles of Organization are required by most states.
Within your articles, you'll need to list your company's name, address, registered agent, LLC organizer, and management method. Sometimes, member names are necessary as well.
7. Obtain an EIN and Open a Business Bank Account.
Congratulations! You now have an LLC officially registered with the state of New Mexico. If you have more than a single member of your LLC (whether you employ anyone or not), you now need to get an EIN from the IRS.
An EIN is an Employer Identification Number. To get one, you can file with the IRS yourself, or SunDoc can file for you.
An EIN is also required by most banks in order to open a business account. If you've been paying business expenses out of a personal account up until now, this is a good time to set up your company's fiscal management. Make sure you keep all receipts for reimbursement no matter the account you’ve used for payments. At this point you may also want to find an accountant for help with business matters.
8. Pay New Mexico State Taxes.
Most likely, your state will require that you pay taxes and required fees every year, including your LLC’s first year. Sales tax is another likely tax you'll need to pay (if you plan to sell goods in the state of New Mexico). Additional information can be found here: State of New Mexico’s tax web site.
9. Determine Necessary Licenses and Permits.
Most states require companies to have one or more business licenses or permits to operate at the city or county level. Use your state's business website to find the requirements for your business. It’s important to check this website even if you think your business is exempt. You may be surprised to discover what’s required. Operating without the proper license or permit can result in expensive fines.
10. File an Annual Report (Biennial Report or Initial List).
Once your LLC has been formed, a document called the Biennial Report (or Annual Report) needs to be filed fairly soon. There is a deadline for filing this report, and if you do not meet it, you face a hefty fine. The role of the Biennial Report is simply to update the state of New Mexico on the status and details of your company. You’ll continue filing this report once every one or two years. You’ll also need to file after making any significant changes to your company.
You can find the Biennial Report form and other important LLC forms on the New Mexico business web site. If you’re short on time, get a reliable filing company like SunDoc to file your Biennial Report on your behalf. We offer this filing service and other routine filings.
Important Notice: It is beyond the scope of this article to discuss your potential insurance needs, or matters relating to employees. You should consult an attorney or accountant with any questions about legal or financial matters. Please note that nothing in this article can be construed as legal, tax or accounting advice.
For additional learning, please visit our LLC FAQs.
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