How Much Does an LLC Cost in New Mexico (A Full Report)
Creating an LLC in New Mexico is a wise business move if you want to safeguard your assets and receive tax advantages for your business.
However, certain expenses are involved, and it's essential to be informed of them before starting the procedure.
As a Mergers and Acquisitions specialist and a Master’s Degree holder in tax law, I helped entrepreneurs form and merge businesses in various states.
To help you budget well, we consulted our team of certified LLC experts in the state and reviewed the New Mexico Secretary of State's website for the correct legal filing costs.
However, if you're new to the process, knowing which documents and taxes to file for your New Mexico LLC and what costs to pay can be confusing. This is why hiring professional LLC services in New Mexico to help you out is a good idea.
Quick Summary
- An LLC in New Mexico costs \$50 for filing the Articles of Organization.
- Additional expenses include licenses and permits, taxes, operating agreement, and other relevant business documents.
- According to the New Mexico Secretary of State, the e-filing system has enabled the creation of over 20,000 LLCs last year, showcasing its effectiveness for entrepreneurs.
- My colleagues who started an LLC in New Mexico discovered that it is possible to create an anonymous LLC in the state, which protects both their identities and assets.
Cost to Start an LLC in New Mexico
To start an LLC in New Mexico, there are basic mandatory costs that have to be shouldered by the company.
1. LLC Formation Filing Fee (\$50 - Mandatory)
In New Mexico, the filing fee for an in-state limited liability company is \$50. This amount covers filing your LLC's Articles of Organization on the New Mexico e-File online portal [1]. According to the New Mexico Secretary of State, this streamlined e-filing system has facilitated the formation of over 20,000 LLCs in the past year, demonstrating its efficiency and accessibility for business owners.
Articles of Organization must be submitted online in New Mexico and can be processed by the Secretary of State within 1-3 business days after receipt.
In my research, the state does not offer expedited service. Since this is the case, I always file my clients’ application in person because the documents are processed within 1 business day.
2. Registered Agent Service Fee (\$80-\$300 – Optional)
The state requires limited liability companies to appoint a registered agent. The fee for employing the services of one ranges from \$80 to \$300.
3. Name Reservation Fee (\$30 - Optional)
If you have an LLC name but aren't prepared to register your firm immediately, you can secure that name and prevent competitors from claiming it.
To reserve a business name in New Mexico, you must file the Application for Reservation of Limited Liability Company Name form, which costs \$30 and lasts for 120 days.
Before filing a name reservation application, I remind clients to ensure their preferred business name is available and that it follows state guidelines.
"In New Mexico, the name of your LLC must include "Limited Liability Company" or "Limited Company," or use the abbreviations "LLC," "LC," "L.L.C.," or "L.C." Additionally, "Limited" can be shortened to "Ltd." and "Company" to "Co."
- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter
Expenses Following the Approval of Your LLC
Once the limited liability company has been approved, additional expenses may include the following:
1. Business License (Depending on the Line of Business - Mandatory)
Most cities in New Mexico also demand local and municipal business permits. These local permits typically cost an annual fee of \$35.
Nevertheless, the cost of fire and safety licenses varies depending on the square footage of a site, ranging from an additional \$35 to \$400 for the smallest and largest enterprises, respectively.
I had a client in the gas sector in Silver City who was charged \$25 per year by the municipal county council.
It's best to visit your municipal clerk's website or get in touch with the office to find out which licenses your LLC will require.
2. New Mexico LLC Federal Taxes (Depending on Income Bracket - Mandatory)
With default tax categorization, LLCs in New Mexico are called "pass-through" businesses, meaning earnings flow through the LLC to the shareholders and members.
The members then list gains as earnings on their personal tax returns and pay the federal self-employment tax rate of 15.3%, according to the Internal Revenue Service (IRS) guidelines.
I always remind clients to submit the Information Return for Pass-Through Entities annually and on time to avoid penalties.
3. Doing-Business-As Name Registration (\$50 - Optional)
A DBA or an assumed name is a different name your New Mexico LLC operates under other than the official name.
If you want to register a DBA name in New Mexico, you can mail your articles of amendments to your Articles of Organization and pay a \$50 filing fee.
Before sending any of these documents, I ensure that the DBA name is not taken and follows all the naming regulations using the Business Services site.
4. LLC Operating Agreement (\$100 - \$200 - Optional, but Recommended)
According to the NM Stat 53-19-2(O) statute, a New Mexico LLC operating agreement is a signed contract governing how a limited liability company and its members operate.
Although no state laws mandate an LLC to establish an operating agreement, it's wise to draft one.
Without an operating agreement, your LLC is instantly subject to New Mexico's standard LLC legislation and may potentially lose its personal liability protection if involved in litigation.
If you use an online LLC formation service to create an operating agreement, be prepared to shell out a filing fee of \$100-\$200.
5. LLC Certificate Of Good Standing (\$25 - Optional)
The cost for a Certificate of Good Standing is \$25, and LLC owners can order it online on the New Mexico Secretary of State's Business Services page.
I had a client asked about the importance of acquiring a Certificate of Good Standing, and I told them that it is a legal document that shows that your LLC is compliant and up-to-date with LLC tax filings in Mexico.
This document is needed to register your LLC in another state, source business funds, and take on potential investors.
6. Certified Document Copies (\$25 + \$1 per page - Optional)
These are state-sealed duplicates of your original document.
Certified copies of filings are available in New Mexico for \$25 (with an additional price of \$1 per page, up to a maximum of \$10).
You may acquire certified copies of your paperwork by contacting the Corporate Division of the New Mexico Secretary of State.
7. Employer Identification Number (\$0 - Optional, but Recommended)
An EIN is a unique nine-digit tax ID the IRS assigns to your LLC.
It serves as the social security number for your company and is important for opening a business bank account and applying for loans and insurance.
The IRS will instantly accept your application for an EIN at no cost if you have all the details. Applying for an EIN online is easy, quick, and takes less than 20 minutes.
Related article: How Long Does It Take to Start an LLC in New Mexico
FAQs
Is There A Penalty For Paying My Taxes Late In New Mexico?
There is a penalty for paying your taxes late in New Mexico. You will be charged 2% of the amount of fee due.
How Much Does It Cost To Register a Foreign LLC in New Mexico?
It costs \$100 to register a foreign LLC in New Mexico. Once approved, your LLC will be authorized to expand and trade in New Mexico.
References:
- https://www.sos.nm.gov/business-services/start-a-business/domestic-nm-llc/
