This is a common question – “Why should I hire you instead of just starting my LLC myself?”  It’s a fair question, but there are actually a number of really good reasons why you should have an attorney help you with your LLC formation.

First and foremost, is an LLC the proper business entity for you?  You can get on the NM Secretary of State website and file the Articles of Organization yourself and your LLC will be legally formed.  Or you could hire LegalZoom to do the same service.  Or even your accountant/CPA (however, there is a fine line there where the non-lawyer could potentially be offering legal services).  But, is an LLC appropriate for you?  Oftentimes, the answer is “yes,” but there are many instances where an LLC would not actually be appropriate.  For example, people with professional licenses should strongly consider professional corporations, and there are some strict rules relating to those.  If you are looking for a more stringent ownership structure with various roles, a corporation may be the way to go.  But by not even speaking with an attorney, you may not be forming the proper entity. 

Second, if you do choose to file the Articles yourself, you can easily do it incorrectly.  Although the Articles on the State of New Mexico Secretary of State website are user-friendly, you can still make errors.  One main error that I see is the unnecessary listing of the Member’s or Members’ names in the Articles.  The listing of the names of the Member or Members is not necessary in the Articles, but many individuals choose to list it anyways, perhaps thinking it is in-fact a requirement.  But regardless of whether you list the Member’s or Members’ name, you will still have to list the organizer, which would presumably be you if your file the Articles yourself, of LegalZoom for example.  You can easily lose the anonymity that is a selling point of New Mexico LLCs

Third, you will need a registered agent with a registered address in the State of organization.  An attorney who forms the LLC can act as such.  Otherwise, you could personally act as the registered agent or hire a registered agent service.  Of course, serving as your own registered agent would not allow for any anonymity.

Finally, and perhaps most importantly, the filing of the Articles of Organization are not the only requirements for an LLC.  One of the most important benefits of an LLC is the limited liability it offers the owners.  However, in order to benefit from the limited liability, you have to take certain steps.  Failure to take these steps could actually allow the corporate veil of the LLC to be pierced and the owners being held individually liable for debts of the LLC.  The LLC must be an actual entity, and not just the alter ego of the owners.  As such, you will need a bank account in the name of the LLC, operating agreement, and ensure the company is being operated as a separate legal entity.  An operating agreement, while not actually a requirement in New Mexico, is vital for so many reasons.  It is the internal document that details how the LLC will function, the ownership split, how owners can be removed/added, and many other important items.  If there was ever a lawsuit against the LLC and the other party attempted to hold the owners of the LLC personally liable for the debts of the LLC, one of the important ways to avoid the LLC shield being pierced is to show that the LLC and its owners are following all requirements in the running and operation of the LLC.  That means keeping funds separate for the LLC, having all contracts in the name of the LLC, following all rules in the operating agreement, etc.  Failure to follow some of the LLC formalities could open up the owners to individual liability. 

When considering whether an LLC is for you, you should always speak to an attorney to first determine whether it is the correct entity type.  And if it is, having an attorney form that LLC will better-ensure that you are going to be enjoying all the benefits of the LLC because filing the Articles of Organization is not all you need to do.  That is just the beginning. 

Related Posts


What is a COPE LLC?

If you’ve been reading about a COPE LLC, you’re not alone. “COPE” stands for “Charging Order Protection Entity”, and therefore a COPE LLC is considered a LLC that helps provide...

Leave a reply

Your email address will not be published. Required fields are marked *