Think about your LLC a year from now: raking in profits and taking New Mexico by storm. You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in New Mexico.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common New Mexico startup fees here.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in New Mexico
Optional: LLC Name Reservation Fee
- $25 for a paper submission
Required: Articles of Organization Fee
- $50 for online or paper submissions. Expedited processing available for and extra $100 (two-day) or $150 (same-day)
Overall New Mexico LLC Formation Costs
LLC Name Reservation Fee
This step is a totally optional part of the LLC formation process. You don’t need to reserve a name before starting your business. However, it’s a great option if you have a stellar name but aren’t ready to file your Articles of Organization quite yet.
Submitting an Application for Reservation and paying the requisite $25 fee will give you sole ownership of a name for 120 days, after which the hold can be renewed for another $25. But if you’re prepared to start your business, go straight to the Articles of Organization, as this will automatically register your name, saving you time and money.
Articles of Organization Fee
This is the big one, the most important form that you’ll file to start your New Mexico LLC. Before you file the Articles of Organization, your business doesn’t exist in the eyes of the state. So you’ll want to file it online or by mail as soon as you’re ready to start doing business. The filing fee is $50, which isn’t too expensive compared to other states. Plus, you only file the Articles of Organization once, so as long as it’s accepted, this is the only time you’ll pay that fee.
Business and Professional Licenses
Your Articles of Organization was accepted, so you’re ready to start doing business, right? Hold up just one second. First, you’ll want to check to see if your LLC requires any additional licensure. Certain industries have mandated licenses to be obtained before commencing business. Plus, cities and/or counties enforce their own licensure requirements. Check with the New Mexico Regulations and Licensing Department website as well as your local government to find out which licenses (if any) you might need.
LLC Formation Service
Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like ZenBusiness and Northwest) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
Registered Agent Service
Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with New Mexico business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000.
Cost variations depend on the experience and location of the lawyer. The sheer number of business lawyers out there might seem intimidating when you’re trying to choose just one, but using a site like Avvo can help. It provides a whole database of New Mexico business attorneys – sortable by rates, location, specialties, and more – so you can research, compare, and find a great fit for your LLC.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into New Mexico. Is this your business? Then instead of the Articles of Organization, you’ll file an Application for Registration.
All foreign business entities are required to foreign qualify in New Mexico, or they could incur some pretty severe penalties. Avoid these by filing your Application for Registration before you start doing business. At $100, it’s a bit pricier than the Articles of Organization, but it’s similarly a one-time filing, so you won’t have to pay this fee after the first time.
LLC Annual Fees
While many states require businesses to complete annual or biennial reports to update their information, New Mexico is one of the few that does not. Even though you won’t need to submit a recurring filing, you’ll want to make sure that you keep the Secretary of State updated on any changes to your registered agent, principal office address, etc. Otherwise, you might end up incurring penalties down the line.
New Mexico doesn’t impose a franchise tax on its LLCs, or any other tax solely for the privilege of doing business in the state. And at the federal level, LLCs are classified as “pass-through” entities, so they don’t have to file corporate tax returns. But before you start thinking that you won’t have to pay any business taxes in New Mexico, keep in mind that every business is required to obtain a CRS tax identification number, and certain circumstances will make your LLC liable for specific business-related taxes.
If your LLC maintains employees, you will need to pay a withholding tax and an unemployment insurance tax. Or, your business may need to pay a Gross Receipts Tax (see requirements here).
See New Mexico’s Taxation & Revenue website for more information on business taxes.
What If I Don’t Pay?
Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
You might not need to keep up with annual reports, but there are still penalties for failing to submit required documents and fees. Right off the bat, if you don’t file an Articles of Organization or Application for Registration, you won’t be able to begin conducting business in New Mexico. And if you fail to update the Secretary of State on registered agent or office changes, your LLC will lose its good standing and risks being administratively dissolved. Any business that loses its good standing can no longer foreign qualify in most states, apply for certain business loans, renew professional licenses, and more.
Miss a tax payment and it will accrue some hefty late fees and interest, although the type of penalties depends on the amount, the quarterly interest rate, and how late it is. Take a look at this Penalty & Interest page to learn more about specific penalty amounts.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in New Mexico.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to file your business changes and any necessary taxes so your business doesn’t fall out of good standing.