How to Form an LLC in New Mexico

Co-authored by Clinton M. Sandvick, JD, PhD

Last Updated: January 31, 2023 References

LLC stands for Limited Liability Company. If you're thinking of forming an LLC in New Mexico, there are a variety of guidelines regarding your name, operating agreement, and the various forms you'll need to fill out. Be patient and take your time with the process.

Part 1

Part 1 of 3:

Making Initial Decisions

1
Choose your name. The first step to forming an LLC is choosing your name. Make sure you follow all requirements when selecting a name for your company.
- Your company must contain the words "limited liability company" or the abbreviation LLC. Certain are restricted (such as variations of the word "bank" and license titles like "doctor" and "engineer") require further paperwork to secure. Prohibited words are words that could result in your company being confused with a federal agency, such as Secret Service, FBI, etc.^{[1]
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- Do a name search of existing businesses in New Mexico. You need to select a name that is available. If you want a website, make sure your desired URL is available so you can secure the domain name.^{[2]
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2
Find a registered agent. A registered agent is an individual your business has authorized to conduct business in New Mexico. Registered agents usually accept legal documents on behalf of your LLC and keep members of the business notified about operations.^{[3]
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- Your registered agent must be legally allowed to conduct business in the state of New Mexico.^{[4]
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- Select someone you trust and preferably someone you've worked with previously. Your registered agent will be an active part of your business so make sure you take time when selecting an agent.^{[5]
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3
Create an operating agreement. An operating agreement is an agreement that establishes owner rights and obligations for an LLC. An operating agreement is not required by the state of New Mexico. However, it is highly recommended to draft an operating agreement to avoid arguments and misunderstandings as you conduct your business. An operating agreement should:^{[6]
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- Outline your limited liability in regards to accidents or other situations regarding your business
- Define the financial and management structures you will use as a business
- Financial information such as member interest rates, how profits and losses are allocated, member voting power, and member rights and obligations^{[7]
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- If you're unsure how to draft an operating agreement, consult an attorney.^{[8]
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Your employment identification number is a number issued by the IRS for tax purposes. If your LLC has more than one member, you will all need separate EIN's. You can obtain an EIN by completing an online application through the IRS website that asks you for basic identifying information.^{[9]
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Part 2

Part 2 of 3:

Dealing with Paperwork

1
File the articles of organization. In order to from an LLC, you'll have to file the articles of organization to with your local office of the Public Regulation Commission of New Mexico. The form is only 2 pages long but make sure you fill out all information properly to avoid having to make any corrections down the road.^{[10]
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- The forms will ask for the name of your company, the address of your business, the name of your registered agent, as well as your name and signature.^{[11]
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- You can find the right office to leave the paperwork by stopping by your local courthouse. You may also be able to find out this information online through the New Mexico state government's website.^{[12]
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2
Register for taxes. Make sure you register for taxes before starting your LLC. You will need to register for New Mexico state taxes by filling out some forms.
- If you have employees and are selling a physical product that requires a sales tax, you will need to register for taxes.^{[13]
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- Go to SBA.gov to figure out the precise regulations for taxes in New Mexico. You can also find any necessary paperwork there. Consult an attorney during this process as you may need to fill out special forms depending on your business type.^{[14]
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3
Obtain a business license and permits. To conduct business as an LLC, you will need a business license. Depending on your business type, you may also need special permits.
- Go to your local courthouse to ask about a business permit. Regulations vary from county-to-county. The application will vary depending on your area, but it will likely ask for much of the same information as the articles or organization.^{[15]
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- Any other permits depend on your business type. A restaurant, for example, will need a health permit. To figure out any additional permits you might need, go to sba.gov and fill out US Small Business Administration Comprehensive guide. This should give you a list of other permits you need to apply for before conducting business.^{[16]
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Part 3

Part 3 of 3:

Starting Out

It's important to have business insurance. While your liability is limited in an LLC, it is not completely absent. In an LLC, look into worker's compensation insurance as well as limited liability insurance. It's a good idea to talk to a lawyer throughout the process of obtaining insurance to make sure you're getting a policy that works for you and your business.^{[17]
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2
Hire employees. Most businesses require at least some employees. During the hiring process, keep the following in mind:
- Are all your employees legally allowed to work in the US?
- Report all employers to the state as new hires.
- Pay employees in specific increments, following any state regulations.
- Withhold income taxes from employee paychecks.^{[18]
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Once your LLC is formed, you'll have continuing legal obligations as you continue to operate. Make sure you know the requirements for state taxes, annual and biennial reports, and other legal forms you'll need to fill out through the year. Go over your legal obligations with a lawyer before forming your LLC.^{[19]
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