A limited liability company (LLC) is a business structure that is popular because of its combination of the benefits of a partnership and a corporation. These benefits include limited personal liability for the owners, known as members, and pass-through taxation, which means that the LLC’s profits are only taxed as part of members’ income and not as a separate entity. An LLC also permits for the company to be governed by either members or managers.
You must satisfy certain requirements if you wish to have an LLC in New Mexico. For instance, you need to file certain forms with the Corporations Bureau at the New Mexico Secretary of State. Your LLC’s name must contain either “limited company” or “limited liability company,” or an abbreviation of one of those two phrases. Depending what type of business in which your LLC is involved, you may also need to obtain certain licenses and/or permits in order to offer professional services. Your LLC will also need to obtain a registered agent who lives or works in New Mexico. The registered agent is the person or company that will receive any legal documents on behalf of the LLC.
In New Mexico, you have the option of filing the necessary paperwork in person, via mail, or online. Keep in mind that if you choose to file in person or through the mail, you will need to provide both the original and a duplicate of your paperwork. There are separate required forms for in-state, or domestic, LLCs and out-of-state, or foreign, LLCs. If you want to establish a domestic LLC, then you will need to file Articles of Organization. You will need to provide the following information to complete the form for Articles of Organization:
- The name of the LLC
- A New Mexico office address for the LLC, which cannot be a post office box
- An end date for the LLC if you do not want it to last in perpetuity
- The organizer’s name, address, and dated signature
- Whether the LLC will have more than one member
- The registered agent’s name and address
- The date you wish the Articles of Organization to become effective if you do not want them to become effective right away
- Whether the LLC will be run by a manager
A foreign LLC that wants to engage in business in New Mexico is required to file an Application for Registration. While the form for a foreign LLC requires much of the same information required by the form for a domestic LLC, the Application for Registration does not require you to disclose whether the LLC is run by a manager and whether or not the LLC is a single-member LLC. However, you will need to state where the foreign LLC was originally formed, the name(s) of whoever is managing the LLC, and the office address for LLC in its location of origin.
Regardless of whether you are filing Articles of Organization or if you are filing Application for Registration, you will also need to file a completed Statement of Acceptance of Appointment by Designated Initial Registered Agent. Also, depending what kind of business you are filing for, you may need to file additional paperwork for your EIN (tax ID), Sales Tax Registration, and/or Payroll Registration and Business Licensing.
New Mexico is the only state that does not require members of an LLC to provide their names. Under New Mexico law, the members do not even have to be the ones who are registering the company. This means that the members of an LLC can remain completely anonymous if they want.
An LLC is required under New Mexican law to withhold the income taxes for any of its members who live out of state and pay these taxes on the members’ behalf as part of filing the Annual Withholding of Net Income From a Pass-Through Entity Detail Report, rather than simply passing on the profits to its members and allowing them to figure out how much income tax they owe to the state. A member can circumvent this requirement and opt to pay their own taxes by filing an Owner’s or Remittee’s Agreement to Pay Withholding On Behalf of a Pass-Through Entity or Remitter. However, this form will need to be filed every year that the member wants to be the one responsible for paying their own taxes, or the LLC will be require to withhold their taxes from the profits to which that member is entitled.
Deciding on the right business structure can be a difficult decision to make, and the best choice for you really depends on your short-term and long-term business goals. Consulting with a New Mexico business lawyer can help you determine the risks, benefits, and process associated with forming an LLC.