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.
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.
Bare Minimum Cost to Start an LLC in New Mexico
Optional: LLC Name Reservation Fee
- $20 for a paper submission
Optional: LLC Formation Service
- $49 for an LLC service like ZenBusiness and $79 for LegalZoom
Required: Articles of Organization Fee
- $50 for online or paper submissions. Expedited processing available for an extra $100 (two-day) or $150 (same-day)
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|LegalZoom||$79 + state fee||Brand||Fair||Yes|
|🥇 ZenBusiness||$49 + state fee||Overall Value||Excellent||Yes|
As a business owner, you have so much to think about. Let an LLC service take care of the formation paperwork so you can sleep easy knowing everything is totally taken care of.
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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 $20 fee will give you sole ownership of a name for 120 days, after which the hold can be renewed for another $20. 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.
To clarify, most states don’t require name reservations, and they’re rarely necessary. If you’re concerned about someone else registering the name you want, you could opt to simply form your LLC instead of reserving the name.
Whether you reserve your business name or not, you should always perform a New Mexico business name search to make sure the name you want is available.
Business Domain Name & Website
To properly brand your business, you’ll want to acquire the domain name so nobody else can use it. Search for and find the perfect one through GoDaddy for just $4.99.
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 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.
The information you’ll need to file your Articles of Organization includes the official business name of your LLC, the duration of your LLC, the name and address of your registered agent, your LLC’s business address and mailing address, an indication that your business is managed by a manager (if applicable), an indication that your business is a single-member LLC (if applicable), the effective date of your LLC formation (if applicable), the date, and your signature.
Business and Professional Licenses
Your Articles of Organization were 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.
What are some of the most commonly required business licenses for New Mexico LLCs? If your business operates in a regulated industry, you will probably need some sort of professional license to operate in compliance with state law. On the municipal level, things like alarm permits, building permits, and zoning permits are all very common.
LLC Formation Service
Starting an LLC in New Mexico 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 website. These services take care of the registration process for you, so you don’t have to spend time on research, paperwork, and filings.
Most of these services (like ZenBusiness or Northwest Registered Agent) offer basic LLC formation services 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 New Mexico 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, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
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 $500-2,000.
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.
If you don’t want to go digging for your own attorney, we compiled the following list of highly rated business lawyers in New Mexico. All of these attorneys are primarily focused on the business world, they all receive five-star ratings from clients, and they all have excellent Avvo ratings.
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 annual reports aren’t necessary. 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.
Key Steps for Starting a New Mexico LLC
- The first step to forming a New Mexico LLC is to come up with a good name for your business. You’ll want to make sure the name you want is still available and hasn’t already been claimed by another business, so you’ll need to search the state’s business database to verify its availability.
- Next, you’ll need to choose your registered agent. While you can legally serve as your own registered agent in New Mexico, this role can actually be more of a hassle than you might expect. That’s why we always recommend hiring a reputable registered agent service that can handle the responsibility of this position on your behalf.
- The third step involves the preparation and filing of your Articles of Organization. You’ll need to fill out the paperwork and pay a $50 fee. Once the state processes this document, your LLC will be officially open for business!
- That’s not the end of the road for the startup process though, as you’ll also need to create an operating agreement for your LLC. There is no legal requirement for New Mexico LLCs to have written operating agreements, but it’s still an extremely important element of any LLC. The operating agreement is an internal document that outlines how your LLC will operate, and there are several aspects of this document that can prevent messy ownership disputes down the line.
- You will also need to acquire a federal tax ID number (also known as an EIN, or employer identification number). This is essentially a Social Security number for your business, as it is a nine-digit code used to file taxes, hire employees, open business banking accounts, and more.
- Next, you’ll need to register for any relevant taxes with the New Mexico Taxation and Revenue Department, and also obtain all licenses and permits that apply to your business type. Keep in mind that, depending on the nature of your business, you might require licenses from the federal, state, county, and municipal governments.
Once you’ve finished all of these steps, you’re ready to operate a compliant business entity with the state of New Mexico!
Key Steps for Maintaining a New Mexico LLC
After you’ve completed all of the items in the previous section, you’ll need to focus on maintaining your LLC. The first step in this process is to open a business bank account. This will help you keep your business and personal expenses entirely separate, and it will also help immensely with your accounting and taxation responsibilities.
You should also keep detailed records of every financial transaction that takes place with your LLC. This means maintaining a file of invoices for every purchase and sale you make, along with information regarding your employees or contractors and the work they perform for your business.
As we already mentioned, annual reports are not a component of LLC maintenance in this state. However, you might want to hold an annual meeting to discuss goals and priorities for your LLC, although this is an optional step.
Frequently Asked Questions
Before we wrap things up, let’s take a look at some of the most common questions we hear from readers regarding the LLC formation process in New Mexico.
What are the state business tax rates in New Mexico?
If your LLC is taxed like a sole proprietorship or general partnership, you’ll need to pay taxes on your business income at the state’s personal income tax rates (between 1.7% and 4.9%, depending on your income level). If your LLC is taxed like a corporation, you’re required to pay New Mexico’s 4.8-5.9% corporate income tax on your business revenue.
How quickly does New Mexico process LLC formations?
The Secretary of State should be able to process your LLC’s formation within 1-3 business days.
How many small businesses are there in New Mexico today?
The state of New Mexico is home to more than 160,000 small businesses. Entrepreneurs of all backgrounds and business types find that New Mexico is a great place to own and operate a small business.
What are the top small business resources and websites in New Mexico?
The New Mexico chapter of the Small Business Development Center is a great place to start, as they offer a wide variety of tools and resources for New Mexico LLCs. The U.S. Small Business Administration’s New Mexico District Office is another valuable resource, and the state’s Economic Development Department also has plenty of good info.
Should I form my LLC in New Mexico, or choose a state like Delaware or Wyoming?
Some people like to form their LLCs in states with favorable legal settings. For instance, Delaware is often seen as the most business-friendly state, as it has an entire court system that’s dedicated solely to business matters. As for Wyoming, this state has some of the most generous anonymity laws for LLC ownership.
However, for most people, your best option is to simply form your business in your home state. Forming in a different state can be a tremendous hassle, and it can add some unnecessary complexity to tax issues as well.