Nearly 96% of businesses in New Mexico are small businesses, and they employ 55% of the employees in the state. Like many other states, small businesses are an integral part of New Mexico’s economy.
If you’re considering creating your own, read on to learn how to form an LLC in New Mexico. We also include a New Mexico LLC operating agreement template to help make the process easier for you.
Is an LLC Operating Agreement Required in New Mexico?
New Mexico does not require an operating agreement.
New Mexico Operating Agreement Laws
Although you are not required by law to have an operating agreement for your LLC in New Mexico, it is a wise business decision to create one. It can protect you in the event of a lawsuit or disagreement between partners and also ensures that all members of the LLC are in agreement on the purpose and structure of the LLC.
You still need to follow the state laws in New Mexico if you decide to create an operating agreement for your LLC. You can read the laws in § 53-19-19.
How Much Does It Cost to Form an LLC in New Mexico?
You will need to pay $50 to form your LLC in New Mexico. There are some optional costs as well. If you want to reserve your name for up to 120 days before filing your articles of organization, you can do so for a $20 filing fee.
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 of the necessary requirements to get your company up and running.
Step 1 – Choose Your Name
The first step in the process is to select your name. There are some rules for the name you choose. If there is another business already using that name, you cannot use it.
You must also make sure your name is unique enough that it isn’t confused with another business with a similar name. 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 may use “Ltd.” or “Co.” as abbreviations for limited and company.
You can use the Application for Reservation of a Domestic Limited Liability Company Name to reserve your name for 120 days before you file your articles of organization.
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 and is available to receive legal documents and other important information. If your business is sued, for example, 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 the state of New Mexico. A P.O. box is not sufficient.
Most LLCs pay a registered agent service to handle this for them. The cost is nominal and ensures that you are complying with state business regulations.
Step 3 – File Your Articles of Organization
This is one of the most important steps in creating your LLC. The articles of organization is what is filed with the Secretary of State to actually create your business. The articles are required to 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
This can be filed online through the Secretary of State’s website and accompanied by a $50 processing fee.
Step 4 – Create an LLC Operating Agreement
Just because New Mexico doesn’t require your business to have an LLC operating agreement, you should still create one. If your business is facing legal action, if there are disputes among the members on voting rights, distribution of profits or debts, or other issues pertaining to the LLC, you will be in a much better position if you’ve already thought about them and addressed them in an operating agreement.
Things to include are:
- The purpose of the LLC
- The members
- Voting rights
- Who will manage the LLC on a daily basis
- How profits and debts will be split among the members
- How to admit new members or handle departing members
- Dissolution procedures
- All rights and responsibilities of each member of the LLC
If you do not have an operating agreement, any state law will dictate how your LLC operates, which may not always be in your best interest.
Step 5 – Obtain an Employer Identification Number (EIN)
An employer identification number (EIN) is necessary if you are going to hire employees or if there are multiple members in the LLC. If you are the only member of your LLC, you won’t need an EIN unless you plan to hire employees.
You can apply for an EIN online through the IRS or apply via mail. There is no fee to get an EIN.
New Mexico LLC Operating Agreement Template
If the thought of creating an operating agreement from scratch sounds like more than you care to take on, we can help with our New Mexico LLC operating agreement template that you can access below: