New Mexico LLC Formation Guide

Low-Cost, Low-Maintenance Business Structure

$50

Formation Fee

Annual Report Fee

1-3

Days Processing

5.9%

Corp Tax Rate (if elected)

Why Form a New Mexico LLC?

New Mexico LLC at a Glance

Statute: NMSA 1978 §§ 53-19-1 to 53-19-74

Agency: NM Secretary of State

Formation Fee: $50

Annual Report: NONE

Filing Method: Online Only

New Mexico offers one of the most low-maintenance LLC structures in the United States. With a rock-bottom $50 formation fee and no annual reports required, NM LLCs are ideal for holding companies, real estate investors, side businesses, and privacy-conscious owners.

The New Mexico Advantage:

Unlike most states that charge $50-$300+ annually for reports, New Mexico LLCs have zero ongoing state filing requirements. Once formed, your only obligations are tax filings and maintaining a registered agent.

Key Advantages of New Mexico LLCs

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Lowest Total Cost

$50 formation fee with no annual reports means minimal ongoing state costs. Perfect for bootstrapped startups and holding entities.

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Zero Annual Reports

Unlike Wyoming ($60/yr) or Delaware ($300/yr), New Mexico LLCs have no SoS annual filing requirement. One less compliance task to forget.

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Privacy-Friendly

No annual reports means no recurring public disclosure of members or managers. Use a commercial registered agent for maximum privacy.

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Fast Online Filing

New Mexico requires online-only filing through the SoS portal. Most formations process in 1-3 business days.

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Flexible Management

Choose member-managed (owners run it) or manager-managed (hire managers). No director requirements like corporations.

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No BOI Reporting

As of March 26, 2025, domestic U.S. LLCs are exempt from BOI reporting under FinCEN's interim final rule. No federal beneficial ownership filings required.

Who Should Choose New Mexico?

✅ Best For:

Holding companies: Real estate, IP, or investment portfolios with minimal activity
Side businesses & solo entrepreneurs: Low overhead for testing ideas or freelance work
Privacy-focused owners: No recurring public disclosure of ownership
Multi-state operations: Form in NM, foreign-qualify where you actually do business
Asset protection structures: Series LLCs for real estate (NM allows series LLCs under § 53-19-62 to 53-19-70)

❌ Maybe Not Ideal For:

VC-backed startups: Investors typically expect Delaware C-Corps for familiarity and court precedent
Large operating companies in NM: If all activity is in-state, you'll owe NM taxes anyway; no advantage over forming locally
Businesses needing Series LLC in every state: Not all states recognize NM series LLCs

Tax Reality Check:

Forming in New Mexico doesn't avoid taxes where you actually do business. If you operate in California, you still owe CA taxes and will need to foreign-qualify your NM LLC in CA (which triggers CA's $800 minimum franchise tax).

The NM advantage is administrative simplicity and privacy, not tax avoidance.

How to Form a New Mexico LLC – Step by Step

New Mexico requires online-only filing through the Secretary of State's business portal. Paper filings are no longer accepted for routine formations.

Choose Your LLC Name

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Name Requirements

Your LLC name must:

Be distinguishable from existing business names on file with the NM Secretary of State
Include "Limited Liability Company," "LLC," or "L.L.C."
Not contain restricted words (Bank, Insurance, University, etc.) without proper authorization

Name Availability Search

Search the New Mexico SoS Business Filings Portal to check if your desired name is available.

Name Reservation (Optional)

If you're not ready to file immediately, you can reserve your name for approximately $20 for 120 days.

Pro Tip: Consider checking trademark availability at USPTO.gov and domain availability before committing to a name.

Appoint a Registered Agent

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What is a Registered Agent?

A registered agent is a person or company designated to receive legal documents, tax notices, and official correspondence on behalf of your LLC.

Requirements

Must have a physical street address in New Mexico (no P.O. boxes)
Must be available during normal business hours
Can be yourself (if you have a NM address), a member, or a commercial registered agent service

DIY vs. Commercial Service

Option	Cost	Pros	Cons
Self (Member as RA)	Free	No cost; full control	Public address disclosure; must be available 9-5; can be served legal papers at home/office
Commercial RA Service	$50-$300/year	Privacy; professional handling; mail scanning; multi-state availability	Annual cost

Privacy Recommendation: Use a commercial registered agent to keep your home address off public records. Services like Northwest, Incfile, or local NM providers charge $50-$150/year.

File Articles of Organization Online

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Required Information

The New Mexico Articles of Organization require:

LLC Name (including "LLC" or variant)
Duration: Perpetual (default) or a specific termination date
Registered Agent Name and Address: Street address in NM (city, county, zip)
Principal Office Address: Can be out-of-state
Management Structure:
- Member-Managed: All members make decisions (default for most small LLCs)
- Manager-Managed: Members appoint manager(s) to run day-to-day operations
Personal Liability Statement: Whether any members are personally liable for LLC debts (almost always "No")
Effective Date: Immediate or delayed effective date (if permitted)
Organizer Information: Name and address of person filing (does not need to be a member)

Filing Process

Create an account on the NM SoS Business Portal
Select "File a New Domestic LLC"
Complete the online form with information above
Pay $50 filing fee by credit/debit card (small convenience fee ~$2 added)
Submit and receive confirmation email

Processing Time

Standard processing: 1-3 business days. You'll receive a stamped Certificate of Organization and filed Articles via email.

                                What You Get:
                                Certificate of Organization (proof your LLC exists)
File-stamped Articles of Organization
Official state LLC number

                            

Draft an Operating Agreement

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Is It Required?

New Mexico does not require you to file an operating agreement with the state. However, it is functionally mandatory for:

Opening a business bank account (most banks require it)
Clarifying ownership, management, and member rights
Protecting limited liability (courts look for LLC formalities)
Avoiding default state rules that may not fit your business

What Should It Cover?

Ownership & Capital: Who owns what percentage; initial capital contributions
Profit & Loss Allocation: How profits and losses are divided (doesn't have to match ownership %)
Management: Member-managed vs manager-managed; voting thresholds; duties and authority
Distributions: When and how profits are distributed to members
Transfer Restrictions: Can members sell/transfer their interests? Right of first refusal? Drag-along/tag-along?
Buyout Provisions: What happens if a member dies, becomes disabled, wants out, or is expelled?
Dissolution: Under what conditions does the LLC dissolve?
Tax Elections: Default tax treatment (partnership, disregarded entity, S-corp, C-corp)

Single-Member LLCs: Even if you're the only owner, an operating agreement helps establish the LLC as a separate legal entity and can be crucial for asset protection and banking relationships.

Obtain an EIN (Employer Identification Number)

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What is an EIN?

An EIN (Employer Identification Number) is your LLC's federal tax ID, issued by the IRS. Think of it as a Social Security Number for your business.

Do You Need One?

You must get an EIN if:

Your LLC has more than one member (multi-member LLCs)
You have or will have employees
You elect corporate tax treatment (S-corp or C-corp)
You file excise tax returns

You should get one even if not required (single-member, no employees) because:

Banks usually require it to open a business account
It protects your personal SSN from exposure on W-9s and 1099s
It's free and takes 10 minutes

How to Apply

Apply online at IRS.gov EIN Assistant. You'll receive your EIN immediately upon completion.

Requirements:

Must have a valid SSN, ITIN, or EIN
Responsible party must be a U.S. person or entity (or use Form SS-4 by mail/fax for international applicants)

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NM Tax Registration

If your LLC will do business in New Mexico or have NM-source income, you must register with the New Mexico Taxation and Revenue Department (TRD).

Registration Methods

Online: Via TAP (Taxpayer Access Point)
Paper: Form ACD-31015 (Combined Business Tax Registration Application)

What You're Registering For

CRS (Combined Reporting System) ID: Your NM tax account number
Gross Receipts Tax (GRT): NM's version of sales tax (but legally a tax on the seller, not the buyer)
Withholding Tax: If you have employees
Corporate Income Tax / PTE Election: If applicable (see Taxes tab)

New Mexico Gross Receipts Tax:

Unlike most states' sales tax, NM levies a gross receipts tax on businesses, not consumers. Rates vary by location (state base + local add-ons), typically 5-9% total. Businesses usually pass this cost to customers but are legally liable for it.

Obtain Local Licenses & Permits

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City & County Requirements

Depending on your business location and type, you may need:

Business License: Many NM cities (Albuquerque, Santa Fe, Las Cruces) require a local business registration/license
Zoning Permits: If operating from a physical location
Health Permits: Food service, salons, etc.
Professional Licenses: Contractors, real estate, healthcare, legal, etc.

Check with your city clerk's office and county offices for specific requirements.

Foreign LLC Qualification (if needed)

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What is Foreign Qualification?

If you form your LLC in New Mexico but do business in another state, you must foreign-qualify (register) your NM LLC in that state.

When Do You Need It?

You typically need to foreign-qualify if you:

Have a physical office, warehouse, or retail location in another state
Have employees working in another state
Regularly conduct in-person business in another state

You typically do not need it for:

Purely online/remote business with no physical presence
Occasional meetings or conferences in other states
Passive investments (owning stocks, real estate via property manager)

Foreign Qualification in New Mexico

If you formed an LLC outside New Mexico and want to do business here, you must file an Application for Registration / Certificate of Authority with the NM Secretary of State.

Fee: Commonly $100
Required: Certificate of Good Standing from your home state, NM registered agent
Tax Implications: Foreign LLCs doing business in NM will owe NM gross receipts tax, possible franchise tax, and PTE obligations

Compliance Matters:

Failing to foreign-qualify when required can result in fines, inability to sue in state courts, back taxes, and personal liability in some cases. Always consult with a lawyer or tax advisor if you're operating across state lines.

Taxes on New Mexico LLCs

Good News: New Mexico LLCs pay no annual franchise fee or annual report fee to the Secretary of State. But tax obligations still exist at the federal and state level.

Federal Tax Treatment

Default (Check-the-Box) Rules

Single-Member LLC: Disregarded entity (sole proprietorship). Report income/loss on Schedule C of your personal 1040.
Multi-Member LLC: Partnership. File Form 1065 (partnership return) and issue K-1s to members.

Elective Tax Status

You can elect to be taxed as:

S-Corporation: File Form 2553 with the IRS. Allows salary + distributions to reduce self-employment tax. Requires "reasonable compensation" to owner-employees.
C-Corporation: File Form 8832 to elect corporate treatment. Subject to double taxation (corporate + shareholder level) but may be useful for retained earnings, qualified small business stock (QSBS), or certain international structures.

S-Corp Election Sweet Spot:

Generally makes sense when LLC profit exceeds ~$60K-$80K and you can justify a reasonable W-2 salary. Saves 15.3% self-employment tax on distributions, but adds payroll compliance costs (~$1,500-$3,000/year).

New Mexico State Tax Treatment

1. Pass-Through Entity (PTE) Election – Entity-Level Income Tax

New Mexico allows qualifying pass-through entities (partnerships, multi-member LLCs, S-corps) to elect an entity-level income tax instead of having members make estimated payments individually.

Form: RPD-41367 (Pass-Through Entity Election)
Purpose: Entity pays NM tax on behalf of members; members get a credit on their personal returns
Advantage: Simplifies compliance for multi-member/multi-state ownership; may allow state tax deduction workaround for federal SALT cap
Not Available: Single-member LLCs unless they've elected corporate tax treatment

2. Corporate Income Tax (If Electing Corporate Treatment)

If your LLC elects to be taxed as a C-Corporation or S-Corporation, it becomes subject to:

Corporate Income Tax (CIT): As of tax years beginning 1/1/2025, New Mexico imposes a flat 5.9% corporate income tax on taxable income (previously two brackets; now simplified).
Franchise Tax: $50/year franchise tax on corporations and LLCs taxed as corporations, reported on CIT-1 (C-corp) or RPD-41359 (S-corp).

S-Corp Note: Even though S-corps are pass-through for federal purposes, New Mexico still imposes the $50 annual franchise tax on S-corps. This is separate from any PTE election.

3. Gross Receipts Tax (GRT)

New Mexico's gross receipts tax is levied on businesses for the privilege of doing business in the state. It is not a sales tax (legally, the business owes it, though most pass it to customers).

Rate: Varies by location; state base rate + local rates = typically 5% to 9% total
Who Pays: Businesses with receipts from NM activity (sales of goods, services, leases, etc.)
Filing: Monthly, quarterly, or annual depending on volume; online via TAP
Deductions/Exemptions: Certain industries and transactions qualify for deductions (manufacturing, resale, govt contracts, etc.); consult TRD guidance

4. Employer Taxes (If You Have Employees)

Withholding Tax: Must withhold NM income tax from employee wages and remit via TAP
Unemployment Insurance: Register with NM Department of Workforce Solutions; pay state unemployment tax (SUTA)
Federal Payroll Taxes: FICA, Medicare, federal unemployment (FUTA)

New Mexico LLC Tax Summary Table

Tax / Fee	Who Pays	Rate / Amount
SoS Annual Report Fee	All NM LLCs	$0 (NONE)
Federal Income Tax	All LLCs (pass-through or corporate)	Varies by income & tax bracket
Self-Employment Tax	LLC members (if not S-corp)	15.3% on net earnings
NM PTE Election (Entity-Level Tax)	Multi-member LLCs/partnerships (optional)	Same rates as individual income tax
NM Corporate Income Tax	LLCs electing C-corp or S-corp treatment	5.9% flat (2025+)
NM Franchise Tax	LLCs taxed as corporations	$50/year
Gross Receipts Tax (GRT)	Businesses with NM receipts	5-9% (state + local)
Employer Withholding & Unemployment	LLCs with employees	Varies by payroll

BOI Reporting Status (Beneficial Ownership Information)

Update (March 26, 2025):

Under FinCEN's interim final rule, all entities created in the United States — including New Mexico LLCs — are now exempt from BOI reporting. U.S. persons have no BOI filing obligation for domestic entities.

Only entities formed under foreign law that register to do business in a U.S. jurisdiction remain "reporting companies" under the Corporate Transparency Act (CTA), with new 30-day filing deadlines.

If you formed your LLC in New Mexico, you have no BOI filing requirement.

Ongoing Compliance & Changes

Articles of Amendment / Change Filings

Filing Type	Fee
Articles of Amendment (name, management, etc.)	$50
Restated Articles of Organization	$50
Articles of Merger / Conversion / Consolidation	$100
Statement of Change of Registered Agent/Office	$20
Articles of Dissolution	$25
Revocation of Dissolution	$25

Dissolution Process

Member Vote: Follow your operating agreement's dissolution provisions
Wind Down: Settle debts, liquidate assets, distribute remaining capital to members
File Articles of Dissolution: With NM SoS ($25)
Cancel Tax Registrations: Close your CRS account with TRD, cancel EIN with IRS, file final tax returns
Notify Creditors: As required by law

New Mexico vs Other States

New Mexico vs Wyoming vs Delaware – LLC Comparison

Feature	New Mexico	Wyoming	Delaware
Formation Fee	$50	$100 (+$2 consent to service fee)	$90
Annual Report	NONE ✅	$60/year	$300/year
Total Year 1 Cost	$50	~$162	$390
Annual Ongoing Cost	$0	$60	$300
Privacy (Member Names)	Not required in formation docs; no annual disclosure	Not required in formation; listed on annual report	Not required in formation; no public annual list
Series LLC Allowed	✓ Yes (§ 53-19-62 to 70)	✗ No	✓ Yes
Asset Protection	Charging order; statutory protections	Strong; charging order remedy	Strong court precedent; charging order
VC/Investor Preference	Uncommon for VC-backed startups	Uncommon for VC-backed startups	Preferred for corp structure, not LLC
Court System / Legal Precedent	Less case law than DE	Less case law than DE	Chancery Court; deep LLC case law
State Taxes (if no nexus)	None if no NM-source income	None if no WY-source income	None if no DE-source income

When to Choose New Mexico

✅ Best Scenarios for NM LLC:

Lowest total cost: If minimizing state fees is top priority, NM wins ($50 once vs $60-$300/year elsewhere)
Holding companies: Real estate, IP, or investment portfolios with minimal ongoing activity
Privacy + simplicity: No recurring public filings means less annual admin burden
Series LLC needs: NM allows series LLCs (like DE); useful for multiple properties or product lines under one umbrella
Side businesses: Testing business ideas, freelance work, or moonlight projects with low overhead

❓ When Wyoming Might Be Better:

You value WY's reputation as the "OG privacy state" (though practical difference from NM is minimal)
You need a state with no corporate or personal income tax and are comfortable with $60/year
You want to leverage WY's strong statutory asset protection (though NM's is also solid)

❓ When Delaware Might Be Better:

You plan to raise VC funding (investors may prefer DE C-Corp over any LLC)
You value Delaware Chancery Court's speed and expertise in business disputes
You're forming a complex multi-class, multi-series LLC and want maximum case-law support
You don't mind paying $300/year for the "Delaware brand"

Tax Reality: "No Annual Fee" ≠ "Tax-Free"

Common Misconception:

Forming in New Mexico (or Wyoming, or Delaware) does not shield you from taxes where you actually do business.

If you live and operate in California, you'll owe CA taxes and need to foreign-qualify (triggering CA's $800 franchise tax)
If you have employees or offices in Texas, you'll owe TX franchise tax (margin tax)
Multi-state sales may trigger nexus and sales/income tax obligations in those states

The NM advantage is administrative: low formation cost, no recurring SoS reports, and privacy — not tax avoidance.

New Mexico LLC Formation Services

As an attorney, I offer comprehensive LLC formation and ongoing legal support for New Mexico businesses and non-resident entrepreneurs.

Service Packages

🎯 DIY Filing Support

$299

Step-by-step filing guide customized to NM
Name availability check
Articles of Organization template & review
Operating Agreement template (single or multi-member)
EIN application guide
NM tax registration checklist

⚡ Full-Service Formation

$799

Everything in DIY package, plus:
I file for you (includes $50 state fee)
Registered agent service (1 year included)
Custom Operating Agreement drafted by attorney
EIN obtained on your behalf
NM TRD registration assistance
Compliance calendar & reminders

🏆 Premium Formation + Tax Planning

$1,499

Everything in Full-Service package, plus:
1-hour tax strategy consultation
Multi-state nexus analysis
S-corp election evaluation & filing (if beneficial)
PTE election guidance
Foreign qualification roadmap (if needed)
3 months ongoing advisory support

Additional Services (À La Carte)

Service	Price
Registered Agent (annual renewal)	$149/year
Operating Agreement (custom)	$499+
Articles of Amendment	$299 (+ $50 state fee)
Foreign LLC Qualification (per state)	$499 (+ state fees)
S-Corp Election (Form 2553 prep & filing)	$399
Annual Compliance Review & Consultation	$499/year
Dissolution & Wind-Down	$699 (+ $25 state fee)

Why Work With Me?

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Attorney-Led Service

I'm an attorney, not a document mill. Every formation is personally reviewed with multi-state business law experience.

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Cross-Border Expertise

Specializing in non-resident founders, international entrepreneurs, and multi-state structures. I handle complex tax residency and nexus issues.

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Tech-Enabled Tools

Access my suite of legal tech tools: contract generators, compliance calendars, state comparison calculators, and AI-powered legal research.

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Ongoing Support

Formation is just the beginning. I offer annual compliance packages, tax planning, operating agreement amendments, and general counsel retainers.

Ready to Form Your New Mexico LLC?

Book dedicated attorney time to plan your New Mexico strategy, compare entity options, and outline compliance steps.

Book a strategy call

Prefer email? I respond within one business day (Mon–Fri).

Email: owner@terms.law

Get Started Now

Get Started – New Mexico LLC Intake

Complete the form below to begin your New Mexico LLC formation. I'll review your information and reach out within 24 hours with next steps.

Your Information

Full Name *

Email Address *

Phone Number

Your Current Location (City, State/Country) *

LLC Details

Proposed LLC Name *

Number of Members *

Management Structure *

Business Type / Industry *

Brief Business Description

Service Package

Which Package Are You Interested In? *

Additional Information

Do you need a New Mexico registered agent?

Are you considering S-Corp tax election?

When do you need the LLC formed?

Questions or Special Requirements

How did you hear about me?

                What Happens Next?
                I'll review your submission within 24 hours (usually much faster)
You'll receive an email with a detailed service agreement, timeline, and pricing confirmation
Once you approve and pay the deposit, I begin your formation immediately
Typical turnaround: 3-5 business days for Full-Service; 1-2 days for DIY review

            