A New Mexico LLC operating agreement is a legal record explaining an LLC’s company ownership plans, business policies, and operational procedures. If you don’t create one, all legal proceedings related to your company will fall under New Mexico’s state laws.
If you create an operating agreement for your LLC, all company members must agree on its terms. You don’t have to present your operating agreement to any authoritative body. Instead, your company members can keep copies of it themselves, and you can set aside a copy for your business’s records.
Is an LLC Operating Agreement Required in New Mexico?
No, New Mexico does not require LLCs to create an operating agreement.
Chapter 53, Article 19 of New Mexico’s Statutes details all the state laws related to LLCs. The only statute that covers operating agreements is § 53-19-19, which explains the records and information that company members can keep regarding their LLCs. This section highlights the importance of maintaining copies of all current and prior operating agreements and all their amendments.
Costs and Fees
Some of the costs and fees associated with forming an LLC in New Mexico are:
- $50 filing fee for a domestic LLC
- $100 filing fee for a foreign LLC
- $20 fee to reserve a business name for 120 days
How to Form an LLC in New Mexico
When you are ready to create your LLC, use the list below to ensure that you complete all the requirements to get your company up and running:
Step 1 – Choose Your Name
The first step in the process is to select your company’s name. You must ensure the name is unique enough to avoid confusion with existing businesses. Use the Secretary of State’s business name database to see if your chosen name is available.
New Mexico also requires you to include one of the following at the end of the name:
- Limited Liability Company
- Limited Company
You can reserve your name for 120 days before you file your articles of organization to ensure no one else uses it. Note that after this period passes, you can’t renew your reservation.
Step 2 – Appoint a Registered Agent
Every LLC must appoint a registered agent. A registered agent acts as a point of contact for your business. They can receive legal documents and other important information about your LLC. For example, if your business is sued, your registered agent must be available to be served.
A registered agent can be a person or a company, but they must have an address in New Mexico. A P.O. box is not sufficient.
Most LLCs pay a registered agent service to handle this for them. The nominal cost ensures that you comply with state business regulations.
Step 3 – File Your Articles of Organization
Your articles of organization are what you file with the Secretary of State to create your business. Your application for your LLC’s articles of organization should include the following information:
- LLC name
- The effective date of the LLC
- The period of duration (whether perpetual or for a specified number of years)
- Purpose of the LLC
- Name, address, and other contact information of the registered agent
- Contact information for the LLC
- Who will run the LLC
- Names of the members of the LLC
- Name and contact information for the person completing the article of organization
Step 4 – Create an LLC Operating Agreement
Just because New Mexico doesn’t require your business to have an LLC operating agreement, you can still benefit from creating one. For example, this document can help your business when facing legal action or disputes among members.
Things to include in your operating agreement include:
- The purpose of the LLC
- The members
- Voting rights
- Who will manage the LLC daily
- The division of profits and debts among the members
- How to admit new members or handle departing members
- Dissolution procedures
- All rights and responsibilities of each member of the LLC
Step 5 – Obtain an Employer Identification Number (EIN)
An employer identification number (EIN) establishes your company as a separate entity for tax purposes.
It’s necessary to obtain one if you plan to hire employees or if there are multiple members in your LLC. You can apply for an EIN online through the IRS or apply via mail. There’s no fee to get an EIN.