Listed below is a step-by-step checklist for how to form a New Mexico limited liability company (LLC). These steps will be very similar from state to state. However, depending on which state you choose to file, some of these steps may not be necessary or more steps may be required. Make sure to check with the state of your formation and the circumstances of your business. Of course, it is assumed that the entity choice has been made after consultation with your accountant and lawyer.
Must include designation as LLC as specified by state statute. Check availability and take measures to protect the name for your use. In New Mexico and in many states, an LLC name may be “reserved” for a set period of time prior to the actual filing of Articles of Organization. You can look up corporate names and check availability in New Mexico, by going here:
Prepare and File Articles of Organization
Include: selected name, duration of LLC, name, street address, and principal place of business of initial registered agent, whether business affairs of the company are managed by the members or manager, and the effective date of the Articles of Organization. You can find template forms at the State of New Mexico by going here: www.sos.state.nm.us/Business_Services/NM_Domestic_LLC.aspx.
Select Your Registered Agent and Office Address
Articles must be filed with Affidavit of Acceptance signed by Registered agent, and a Registered Agent MUST have a valid mailing address (not PO box) in the State of New Mexico If you don’t have a valid NM mailing address or otherwise not physically located in New Mexico, consider hiring us to be your Registered Agent.
File Your Articles and Affidavit of Acceptance of Appointment of Registered Agent to the NM Secretary of State
You must submit two copies of both set of documents, and be prepared to wait 2-3 months (minimum) for a reply, unless you expedite. Expedited service costs $150 for 24-hour turnaround or $100 for 48-hour turnaround. One word to the weary: New Mexico says you must expect an 8-10 day turnaround, even if you expedite. When the state replies to you, they will send you a “Certificate of Organization,” which is what you need to open up a bank account.
Prepare the Operating Agreement (especially important for a multi-member LLC)
This should be drafted by or in consultation with an attorney and accountant. It should address:
– Addition, expulsion, or withdrawal of members
– Capital contributions, ownership percentages, and treatment of capital
– Distributions of profits and losses
– Tax matters
– Powers and responsibilities of members
– Non-compete or confidentiality agreements
– How members will make decisions on major issues
– Restrictions on transfer of membership units
– Death, disability, or financial insolvency of members
– Management of day-to-day operations and provisions for third-party managers, if any
– Termination and dissolution of the LLC
Open a Bank Account
Make sure you open up the bank account in the Company’s “legal name,” which is the name on your Articles. Most banks will require a copy of the Certificate of Organization, signed company resolution (if you have more than one member), and an SS-4 from the IRS (your FEIN number).
Licensing, Tax, and Employer Registrations
– Many cities and states will require a business license and/or occupational permit for the business office
– IRS Form SS-4 – Application for Employer ID Number (may be filled out online at www.irs.gov)
– File Application for Business Tax ID Number with state
– If the LLC is to be treated as other than a partnership by the IRS then an election must be filed. Deadlines apply. This decision should have been made when considering a business entity.
– If the LLC has employees, you will have to register with state unemployment insurance authorities and file periodic FUTA and SUTA withholding and payment documents.
– It may also be necessary to file with industry regulators for professions such as insurance agents, real estate agents, lawyers, accountants, etc.
Filings in Other States Where the Company Does Business
LLC will have to register as a foreign LLC in other states and arrange for appropriate tax and regulatory filings which will vary from state to state.
Document All Agreements with Third Parties
Have the contracts reviewed by an attorney — includes customer service agreements, leases, consultant agreement, payroll servicing agreements, insurance agreements, agreements with vendors or suppliers, and agreements with employee benefit providers. L4SB provides a flat-rate contract review service ($25/page, minimum 4-pages, per contract) to help you here.
Establish Accounting and Bookkeeping
Consult with an accountant or CPA to help you implement proper payroll activities and procedures, and prepare provisions for future tax and business filings.
Initial Meeting of Members or Managers
This should ratify all actions taken by founders including acceptance of filings, documents, and acknowledgement of ownership percentages, capital accounts, issue of ownership certificates, acceptance of banking, leasing and other business relationships, authorizing and approving expenditures in formation process, identifying manager(s), and authorizing the hire and/or employment agreements.
Establish a Website and Protect Intellectual Property
This will include trademarks, copyrighted material, or patents
Execute and Establish Employee Benefit Plans
This includes: health insurance, retirement and medical reimbursement plans, or other cafeteria plans
Draft and Place Into Operation Employee Handbooks and Human Resource Materials
Create a guideline for employees to follow.
The business lawyers at Law 4 Small Business can provide expert assistance in going through these steps and the choices involved.
For additional information, you can also check out our blog articles entitled