A single-member limited liability company (LLC) is a type of business structure that is becoming increasingly popular among entrepreneurs because it offers limited liability protection for the owner while allowing them to maintain full control over the business. If you are interested in forming a single-member LLC in New Mexico, continue reading to learn the steps involved.
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Step 1: Choose a Business Name
The first step in forming a single-member LLC in New Mexico is to choose a business name that is not already in use by another LLC within the state. You can check the availability of your desired business name on the New Mexico Secretary of State's website.
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Step 2: File Articles of Organization
Next, you will need to file articles of organization with the New Mexico Secretary of State's office. These articles should include your LLC's name, address, and the name and address of its registered agent (a person or entity designated to receive legal notices and other documents on your behalf).
The filing fee for articles of organization in New Mexico is $50. You can file your articles online or by mail.
Step 3: Obtain an EIN
An Employer Identification Number (EIN) is a tax identification number that is unique to your business. You will need this number to open a business bank account, file taxes, and hire employees (if applicable).
You can obtain an EIN through the IRS's website. It is free to obtain an EIN, but you must have a valid Social Security Number or ITIN to apply.
Step 4: Register for State Taxes
If your business will be selling taxable goods or services, you will need to register for state taxes with the New Mexico Taxation and Revenue Department. This includes both gross receipts tax and withholding tax.
You can register for state taxes online or by filling out and mailing in the necessary forms. More information on how to register can be found on the state's website.
Step 5: Obtain any Necessary Licenses and Permits
Depending on the nature of your business, you may need to obtain various licenses and permits in order to operate legally in New Mexico. Some common licenses and permits include:
- Professional and occupational licenses
- Sales tax permits
- Health Department permits
- Liquor licenses
- Building and inspection permits
You can find a comprehensive list of the licenses and permits required for various types of businesses on the New Mexico Regulation and Licensing Department's website.
Step 6: Draft an Operating Agreement
Although New Mexico does not require single-member LLCs to have an operating agreement, it is highly recommended that you have one. This agreement outlines the rights and responsibilities of the owner(s) and helps to avoid future disputes.
Your operating agreement should answer questions such as:
- How will profits and losses be allocated?
- How will major business decisions be made?
- How will the LLC be dissolved if necessary?
**Note:** If you are uncomfortable drafting an operating agreement on your own, it may be beneficial to seek the advice of an attorney.
Step 7: Open a Business Bank Account
Once you have obtained an EIN and registered for state taxes, you can open a business bank account. This will help you to keep your personal and business finances separate, which is important for tax purposes and liability protection.
When opening a business bank account, be sure to bring the following:
- Your LLC's EIN form
- A copy of your articles of organization
- Your operating agreement, if applicable
Conclusion
Forming a single-member LLC in New Mexico is a relatively straightforward process that involves several important steps, including choosing a business name, filing articles of organization, obtaining an EIN, registering for state taxes, obtaining any necessary licenses and permits, drafting an operating agreement, and opening a business bank account.
By following these steps and taking the necessary precautions, you can protect yourself and your business while enjoying the benefits of being a single-member LLC owner in New Mexico.
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