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Corporation New Mexico Experts and 5 Steps to Your NM  Corporation

If you’re starting your own business in New Mexico, you may want to make it a corporation. A corporation is considered a separate entity from its owners. For that reason, the personal assets of its shareholders are protected.

How do I form a Corporation in New Mexico?

To start a corporation in New Mexico, you must start by filing Articles of Incorporation with the Secretary of State.

To simplify forming a corporation in New Mexico, we’ve put together 10 easy steps:

Step 1: Name Your New Mexico Corporation

If you want your corporation to stand out from the rest, you should give it an original business name. You can check if a business name is available on the Corporations and Business Services website for the New Mexico Secretary of State.

Although New Mexico doesn’t require you to reserve a name for your corporation if you file the Articles of Incorporation, it’s still good to do so. You don’t want to start advertising your upcoming company to discover you can’t secure its name. You can reserve your corporate name for 120 days by mailing the Application for Reservation of a Domestic Profit Corporate Name with a $25 fee to:

New Mexico Secretary of State Office

325 Don Gaspar, Suite 300

Santa Fe, New Mexico 87501

Rules for Your Business Name

A few rules for naming a corporation include:

It’s also a good idea to reference existing trademarks when coming up with your corporation name. You can look at the United States Patent and Trademark Office (USPTO) website to determine whether your name is infringing on someone else’s trademark at the federal level. You can also search New Mexico’s trademark database to ensure a similar mark hasn’t been registered there. Visit the trademark section of New Mexico’s Business Portal for information on applying for a state and/or federal trademark. 

When comparing the trademark registration levels, it’s often easier and quicker to file at the state level, but the federal level can provide broader protection, which is useful if you plan to do business outside of New Mexico.

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Consider a DBA

Most states require you to file a “doing business as” (DBA) name (also known as a trade name or fictitious name) if you want to do business under a different name than the one your corporation is legally registered as. However, New Mexico has no DBA registration in place at this time. If you want to operate under a different business name, consult an attorney to see what your options are.

Step 2: Appoint Directors

When you start your New Mexico corporation, you’ll have three types of people involved. There will be:

Plan a meeting to decide on a board of directors to run your operations. You can even choose yourself.

Although incorporators, shareholders, and directors have different duties, it is legal for an incorporator also to be a shareholder, director, or all three.  

A New Mexico corporation must have at least one director named in its Articles of Incorporation. There are several regulations regarding the appointment and function of directors. Some jobs that your board of directors will be responsible for include:

Step 3: Choose a New Mexico Registered Agent

As a New Mexico corporation, you must decide on a registered agent to receive important communications from the government as well as legal notices, such as service of process (notification of a lawsuit). A registered agent can be someone who is involved in your business or even yourself. But if you’d rather hire someone outside your business, that’s OK, too — it’s often even preferable.

Who Can be Your Registered Agent

Your registered agent must be an individual who is a resident of New Mexico or an entity commissioned to do business in the state of New Mexico. Here are a few other things to keep in mind:

You can also rely on a registered agent service, like ours here at ZenBusiness. Use our New Mexico registered agent service.

Step 4: File the New Mexico Articles of Incorporation

After identifying the key figures in your corporation, the next step is to file your Articles of Incorporation. In some states, this document is known as a Certificate of Incorporation. Both titles mean the same thing.

What You Need to File Articles of Incorporation

You’ll need to file your Articles of Incorporation with the New Mexico Secretary of State Business Services Division, and you’ll need to include:

How to File Your Articles of Incorporation

You can file your Articles of Incorporation online through the New Mexico business services portal, or you can mail this document to:

New Mexico Secretary of State Office

325 Don Gaspar, Suite 300

Santa Fe, New Mexico 87501

Note that New Mexico is unusual in that the filing fee is a minimum of $100 and a maximum of $1,000 since it depends on the number of authorized shares. For the first 100,000 shares, the fee is $100. After that, the fee increases by $1 per 1,000 shares, not to exceed $1,000.

Step 5: Create Corporate Bylaws

By creating bylaws for how your company should operate, you’ll let everyone involved know what’s expected of them. Corporate bylaws are not only required in New Mexico, but they can help your business run smoothly. They’re also considered legally binding and can help protect a corporation in a legal dispute.

Examples of Corporate Bylaws

Here’s a list of items you may want in your corporate bylaws:

Keep your corporate bylaws in a secure place so that you can reference them whenever you need. They are a vital part of your corporate records.

Step 6: Draft a Shareholder Agreement

A shareholder agreement lays out the rights and responsibilities of the shareholders. This document will outline the commitment you expect from your shareholders and the powers they can expect to enjoy. Your shareholder agreement should cover:

Step 7: Issue Shares of Stock

Before you can start your corporation, you must issue stock. First, you’ll want to figure out how much capital you’ll need to start your corporation. When you do, divide that number into stock shares and divide them among your company’s shareholders. Shares can be traded or sold.

Issuing Stock

You can privately issue stock to founders, employees, private investors, and others or you can publicly issue stock that the general public can purchase. If you issue stock publicly, you’ll have to file quarterly reports with the U.S. Securities and Exchange Commission (SEC).

Keeping Stock Records

You’ll have to include a record of each share you issue in your biennial report, so it’s also important to keep track of them in writing. 

We suggest studying New Mexico’s rules for issuing stock to get a better understanding of the process.

Step 8: Apply for Necessary Business Permits or Licenses

New Mexico doesn’t require a general business license on the state level, but some counties and cities may require one. The other types of licenses and permits needed vary a great deal from business to business. Some different licenses you might need are:

We recommend that all new business owners do their research to ensure they have the right business licenses and permits at the local, state, and federal levels. You can also hire a business, such as ZenBusiness, to conduct this research for you.

Step 9: File for an EIN and Review Tax Requirements

Much like a Social Security number is unique to an individual with the federal government, an Employer Identification Number (EIN) is used to identify your unique corporation. They are also referred to as your Federal Tax Identification Number. Corporations are separate legal entities from their shareholders, so they need their own identification numbers.

You can register for an EIN on the IRS website. You’ll get your corporation’s EIN for free after you apply. You’ll need the EIN to file taxes and attain a corporate bank account, so keep it safe.

Similarly, your business will likely need to register with the New Mexico Taxation and Revenue Department in order to get a Combined Reporting System (CRS) Identification Number to pay various state taxes. You can acquire the CRS online or fill out form ACD-31015 and send it to any local tax office.

Your corporation will be responsible for paying both federal and state income tax. In addition, New Mexico has an annual franchise tax of $50.

Step 10: Submit Your Corporation’s First Report

New Mexico corporations are required to file an initial report within 30 days of forming, and then they are required to file a biennial report every two years. The biennial report is due the 15th day of the fourth month following the end of your fiscal year.

To clarify, if your company ends its fiscal year in December, the report will be due April 15. If your company ends its fiscal year in June, the report will be due Oct. 15. 

Nonprofits have to file a report every year, which must be turned in by the 15th day of the fifth month after their fiscal year ends.

Biennial Report Requirements

You’ll need to file your initial and biennial reports using the New Mexico business services portal with a $25 fee.

How much does it cost to start a corporation in New Mexico?

Several factors can influence the total cost of incorporating in New Mexico. To file your Articles of Incorporation, you’ll have to pay at least $100 and possibly up to $1,000 if your corporation can issue a large number of shares. You’ll also need to pay $25 when submitting your initial report.

Some other expenses you might run into are:

ZenBusiness can help eliminate some of the stress for you. With our annual plans, we can help you stay on top of any required filings in order to keep your New Mexico corporation compliant, so you can relax and focus on growing your business.

What are the benefits of a corporation in New Mexico?

There are many advantages to starting a corporation in New Mexico. When you incorporate in New Mexico, you’ll experience perks like:

There are a few downsides to starting a corporation, though. C corporations are taxed twice. After you pay your corporate taxes, you’ll still have to include your share of the profits on your personal tax returns. 

How is a New Mexico corporation taxed?

The way that a corporation is taxed in New Mexico depends on whether it is a C corporation, an S corporation, or a nonprofit corporation.

C Corporation Taxation in New Mexico

C corporation has to file corporate returns, and its owners also have to report income on their personal tax returns, which means C corporations are double-taxed. However, there are several tax deductions accessible to C corporations. In addition to federal and state income taxes, New Mexico C corporations also pay a $50 annual franchise tax.

S Corporation Taxation in New Mexico

S corporations have a pass-through tax structure. Profits from the corporation go straight to its owners’ tax returns. Legally, S corporations are still separate entities from their owners, but pass-through taxation allows them to bypass federal corporate income tax. However, in New Mexico, S corporations still pay the state’s $50 annual franchise tax.

Nonprofit Taxation in New Mexico

Because nonprofit organizations must provide a benefit to the public, they can apply for tax exempt status from the federal and state government, including New Mexico’s franchise tax. Nonprofits must follow strict regulations to maintain their tax-exempt status. 

Types of Corporations to Start in New Mexico

If you choose to start a corporation, you’ll have to decide which type of corporation you’d like to start. You have a few choices, and each has positives and negatives.

We can help!

Ready to start your corporation? We can help form your corporation in minutes. We can also help with expedited filing fees and worry-free compliance after you form.

New Mexico Corporation FAQs

  1. Does starting a corporation in New Mexico involve more paperwork than starting other types of businesses?

    Corporations do require a lot more paperwork and record-keeping than other types of businesses. They are more difficult and time-consuming to start than business structures like sole proprietorships or limited liability companies (LLCs).

  2. What is the difference between an LLC and a corporation in New Mexico?

    A corporation is owned by shareholders, while an LLC is owned by an individual or a group of people referred to as members. LLCs have a choice; they can be taxed as corporations or partnerships. LLCs also require less paperwork and yearly reporting.

  3. How do I change my corporation’s name in New Mexico?

    You can change the name of your corporation in New Mexico by filing an Amendment of the Articles of Incorporation with the Secretary of State and paying a $100 filing fee.

  4. How many people are needed to form a corporation in New Mexico?

    A single person can form a corporation in New Mexico.

  5. Can I form my New Mexico corporation online?

    You can form your New Mexico corporation online using the Secretary of State’s business services portal.

  6. How do I dissolve my New Mexico corporation?

    To dissolve your corporation, you will need to file a Statement of Intent to Dissolve and the Articles of Dissolution with the state.

Most Popular States to Form a Corporation

When it comes to compliance, costs, and other factors, these are popular states for forming a Corporation

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