How to Start a Business and Form Your LLC in New Mexico
- New Mexico Business Facts and Environment
- Step 1: Decide on a Business Structure
- Step 2: Pick a Business Name
- Step 3: Register the Business
- Step 4: Obtain Your Federal Employer Identification Number
- Step 5: Open Company Bank and Credit Accounts
- Step 6: Set-up An Accounting System
- Step 7: Obtain Licenses and Permits
- Step 8: Hire Employees (if applicable)
- Step 9: Obtain Business Insurance
- Step 10: Systemize and Organize
- Step 11: Branding and Marketing
- Step 12: Annual and Ongoing Requirements
- Important New Mexico Contacts
New Mexico Business Facts and Environment
NM Business Facts
The one-of-a-kind state of New Mexico is the most competitive state in the southwest for manufacturing and one of the nation’s leading energy producers. Operating costs, real estate, and labor costs are all highly competitive in the Land of Enchantment.
Major Companies in New Mexico
New Mexico is the home of many major corporations, such as Akal Security,
Sandia National Laboratories, Los Alamos National Laboratory, Ernest Health and GCC Dacotha.
Startup Environment
New Mexico entrepreneurs benefit from low taxes and operating costs in addition to small business resources such as the New Mexico Small Business Assistance Program and Finance New Mexico. For entrepreneurs seeking anonymity, New Mexico is also home to the most private entity in the country.
Step 1: Decide on a Business Structure
There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.
- A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
- A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
- An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.
Step 2: Pick a Business Name
Choosing a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that the better). In Step 3 we’ll show you how to search for the name in New Mexico, but we highly recommend you do the following before searching New Mexico state databases:
- Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
- Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
- Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself.
TIP: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
- Make sure your company name choice is available by searching the New Mexico Business Entity Database. NOTE: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).
NOTE: Familiarize yourself with the New Mexico naming guidelines. LLC entity names need to contain the abbreviation LLC or L.L.C., and certain words are restricted or prohibited.
Step 3: Register the Business
Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in New Mexico.
How to form an LLC in New Mexico
- File the “Articles of Organization” with the New Mexico Secretary of State Corporations Bureau.
- Once the articles are filed and approved you will then need to properly organize the LLC (this also applies to “1-person LLCs”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.
How to Incorporate in New Mexico
- File the “Articles of Incorporation” with the New Mexico Secretary of State Corporations Bureau.
- Hold an “Organizational Meeting” to determine the percentage of ownership for each shareholder as well as resolve to do tasks like open a company bank account, pay back pre-incorporation expenses, elect S-Corporation status and more.
- Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.
How to File a DBA in New Mexico
- New Mexico does not have DBA registration requirements at the state or local level.
Considerations when incorporating or forming an LLC in New Mexico
Tip: Check our order form to see how long New Mexico is currently taking to process regular and expedited orders. A New Mexico LLC can be processed in 5 business days but a New Mexico corporation can take up to 4 months to be filed and returned, so expedited filing is highly recommended.
Hire a professional Registered Agent. Many people list their home or business address on the Articles of Organization or Incorporation. This can cause issues because it becomes public record (you’ll get lots of junk mail). A professional Registered Agent will provide their address and forward any important documents to you. This is also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).
Ready to register a business in New Mexico?
- We specialize in registering businesses in New Mexico.
Ready to Start Now? Let Us Do The Work
Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.
- Learn more about our business formation service
- Read our verified reviews and 100% Satisfaction Guarantee
- Contact our friendly support team if you have any questions
Step 4: Obtain Your Federal Employer Identification Number
Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.
To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.
TIP: We will obtain your EIN for you if you we form your company.
Step 5: Open Company Bank and Credit Accounts
To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork b) your EIN c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).
TIP: Our business formation service includes a free banking resolution for your use.
Step 6: Set-up An Accounting System
Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.
Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.
Step 7: Obtain Licenses and Permits
Now that you’ve registered your business name you may need to obtain a business license for your company – this authorizes your company to do business in your city or county depending on the kind of service you provide. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).
TIP: We can help you identify the necessary forms to obtain your business license.
Step 8: Hire Employees (if applicable)
If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.
Step 9: Obtain Business Insurance
There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection. Click here to view our preferred provider of business insurance online.
Step 10: Systemize and Organize
Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.
Step 11: Branding and Marketing
Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.
Step 12: Annual and Ongoing Requirements
DBA: New Mexico does not have DBA registration statutes.
LLC: New Mexico LLCs are not required to file an annual report.
Corporation: New Mexico corporations must file a report biennially on or before the fifteenth day of the third months following the end of the taxable year. The filing fee is $25.
Important New Mexico Contacts
Corporations Bureau (for Corporation and LLC filings)
New Mexico Capitol Annex North
325 Don Gaspar, Suite 300
Santa Fe, NM 87501
505-827-4508
New Mexico Taxation Departments
New Mexico Labor and Employment Departments
New Mexico Startup Resources
Small Business Administration (SBA) New Mexico District Office
New Mexico Legal Statutes
- Business Corporation Act – includes various other topics including partnerships and associations.
- New Mexico Business Laws – seeks to protect consumers by fostering a competitive business environment, and laws prohibiting certain deceptive business practices, such as false advertising.
New Mexico Chambers of Commerce
Angel.co New Mexico Startups
- A list of New Mexico startups and investors registered with Angel.co.
New Mexico Business News
The Office of Business Advocacy
City of Albuquerque Small Business Grow It!
New Mexico Small Business Development Center
- New Mexico SBDC – the NMSBDC is able to help New Mexico small business owners at no charge, which means many New Mexico residents who would otherwise be unable to afford this valuable assistance are able to access the professional expertise they need to succeed.
New Mexico Green Business Resources
