New Mexico is a state full of culture, diversity, and great weather! If you want to start your own company and begin your journey to entrepreneurial success, registering a business in the state is a relatively easy process due to the state’s consistent support for small businesses.
There are a multitude of business incentive programs that have been put in place in New Mexico to help entrepreneurs with the creation of new jobs, development of business, professional advice, business loans, and grants. In addition, there are some business development centers located in the state with the sole focus of helping entrepreneurs and those with existing businesses grow and flourish.
New Mexico’s consistent continued support for its small businesses is evident in its approach to encouraging new businesses to register in the state. With access to a number of resources, from business and financial assistance programs to small business development centers, affordable licensing fees, tax incentives, comparatively cheap New Mexico Secretary of State registration fees, and speedy filling times, it comes as no surprise why so many people choose New Mexico to register a business in.
How to Register a Business Name in New Mexico – 7 Easy Steps
The New Mexico Secretary of State makes it reasonably easy to register your business name. There are three ways you can do this:
- 1. Do it yourself directly on their website.
- 2. Pay a document filing company that can register everything online for you – there is a modest fee for this but it saves a lot of time and ensures it is done correctly.
- 3. Hire an attorney or accountant to file and register your new company – there are higher fees associated with this.
Step 1 – Determine your registered name
Firstly, you must determine that your business name is unique and not being used by someone else. A business registration company can do this research on your behalf or alternatively, you can search directly on the New Mexico Secretary of State website.
Once you have established your name is available you can register a business name in New Mexico directly on their website if you are comfortable with the process. Or, if you want a company to do this for you that specializes in this, you can use an online registration service to do it.
These companies usually offer a free registered agent service for one year with most of their packages which is often a necessity for new businesses and those being registered by foreigners with no U.S. address.
Before doing any of this, you must decide on the right structure.
Step 2 – Choose the right entity
You need to choose the right type of business to register and the most common options are a limited liability company (LLC) or an incorporated company (Inc). If you are keeping things really small and simple (one or two people), then you may consider a sole proprietorship or a general partnership.
Even if you plan to be a solopreneur, it is usually more beneficial for you to register a New Mexico LLC to make sure, as the owner, you have limited liability under this structure, and so you can benefit from the pass-through tax advantages.
Here is a quick rundown of the various options and what they might mean to you:
- Limited Liability Company: A New Mexico LLC is often the best route for most entrepreneurs because the structure comes with personal asset protection, no double taxation, is fairly easy to maintain, and does not have high registration or annual renewal costs. Through LLC formation you have better tax flexibility and income can be taxed as a pass-through entity like a sole proprietor or partnership, or as a corporation.
- Incorporated Company: A New Mexico Corporation offers personal asset protection and your company can own property, vehicles, incur liabilities, and is responsible for its own debts and can conduct business without the owners risking their personal assets such as their homes, cars, personal savings, retirement, etc. On the flip side, owners of sole proprietorships or partnerships face unlimited liability for both business and personal assets.
Step 3 – Make sure your name is not being used by another company
This may seem obvious, but if you check the New Mexico Secretary of State website and see that your chosen business name is available, that is all well and good, but that doesn’t mean someone else is not using that same or similar name, particularly in another state.
Many people register an “official business entity name” and trade under a different name. This is called a New Mexico dba, or “doing business as” name or assumed trading name, and needs a separate DBA certificate.
You will want to do a Google search for your official name and your desired trading name (if different) to make sure no one else is using this name. Most importantly, you will want to make sure you can get an easy-to-remember website domain name that is not being used by someone else.
Having an awesome name or trading name for your business can be crucial to your success, so making sure the domain name is available too, and registering it right away, is equally as important.
Finally, if you go to the New Mexico Secretary of State website and discover that someone else has registered the name you would like, you can search for variations of that name by adding a word before it or after it, or using some other variations until you find a name that is available and acceptable for you.
Step 4 – Request an Employer Identification Number (EIN)
Once you have registered your new business in New Mexico you will need to get an EIN for a number of reasons. These include paying taxes for your business, opening a bank account, obtaining credit cards or lines of credit, establishing terms with vendors and suppliers, hiring employees, and more.
There are only a few instances where you likely won’t need an EIN. More often than not, many business activities are just not possible without having an EIN.
An EIN is the business equivalent of a social security number and is used to track your business dealings. Even if you do not intend to hire employees, you will almost certainly still need an EIN for your New Mexico company and it protects you from having to use your social security number.
An EIN (also known as a federal tax id) is free to obtain from the IRS and you can apply online but if you are not comfortable filling in forms you can use a third-party document filing service to do this for you for a small fee. This ensures you are 100% compliant with the law and they handle everything with the IRS.
Step 5 – Obtain the Required Business Licenses and Permits
To operate your business in New Mexico you must comply with federal, state, and local government regulations. New Mexico law does not require all small business owners to have a “general” license to operate.
You will, however, need specific permits for specific businesses. For example, if you open a restaurant or similar food-related business you will most likely need a health permit, sales tax permit, facilities permit, and others. If you plan to sell alcohol, you will need a liquor license, essentially it all depends on the type of products and services your business is going to offer.
The business licenses you will need to acquire in order to register a business in New Mexico will also differ depending on the location of the business too.
You must find out how to obtain the necessary New Mexico business licenses and permits for your business and fill out the appropriate forms. Alternatively, you could hire a professional document filing company to do this for you. It eliminates a lot of time and hassle and ensures you are correctly complying with New Mexico law.
Step 6 – Determine Your Business Employer Requirements
There are several things you need to check regarding your responsibilities as an employer in New Mexico because there are requirements you must meet at the federal and state level. These could include various workforce commissions, safety, and state tax obligations, as well as labor law requirements including the minimum wage in New Mexico and employee rights and remedies under the New Mexico minimum wage act.
To learn more about New Mexico employer resources take a look at the New Mexico Department of Workforce Solutions website.
Step 7 – Open a Business Bank Account for your New Mexico Company
As a new business owner, you should seriously consider separating your personal and business bank accounts to make it easier to track and account for your income and expenses. For certain business types, such as an LLC or a Corporation, it is essential that you open a separate business bank account to maintain your liability protection.
Once you have your EIN and your company registration documents, coupled with your driver’s license, you are ready to go to the bank and open your checking account.
Don’t worry, this won’t be expensive or leave you burdened with hefty monthly fees to pay – there are many free business bank accounts out there for you to choose from. Each has its different features and benefits, so you can decide what bank and checking account best suits your needs.
Summarizing Registering a Business in New Mexico
New Mexico offers a good business ecosystem for both large and small businesses, with access to a healthy consumer base (over 2.1 million population). On top of this, there are many different business support systems and development centers that have been established with the sole focus of aiding your business’s growth and development.
Small businesses thrive in New Mexico due to its pro-business climate, the abundance of business opportunities, comparatively low business taxes (4.8%-5.9% corporate income tax rate), low-income-tax, a highly productive and motivated workforce, and a very skilled workforce (36% college-educated).
The state fee for registering a business in New Mexico is a very affordable $50 for an LLC and $50 for a corporation. There is no annual filing fee to maintain your company in New Mexico, meaning that you only pay once when you register, not each year like most other states!
The Land of Enchantment is extremely committed to your success and has many resources at your disposal that you can take advantage of making it an attractive area for both families and businesses that are looking to keep expenses low.
Resources for Small Businesses in New Mexico
Whether you decided to register as an LLC, Corporation, or simply as a Sole Proprietor in New Mexico you are going to need to tap into the resources available to you to drive your small business forward.
New Mexico has small business development centers that are dedicated to supporting the development and retention of small businesses throughout the state. The support they provide to entrepreneurs covers everything from crafting business plans to navigating the state’s tax codes. Visit the New Mexico Small Business Development Center website to find out more.
Here are some additional small business resources in New Mexico:
- SCORE New Mexico: Not only are there small business development centers tailored around working with small businesses and startups for growth and development, but SCORE’s volunteer business professionals and expert mentors are readily available and are free to use for those looking to begin their entrepreneurial journey.
- New Mexico SBA: The U.S. Small Business Administration (SBA) helps small business owners and entrepreneurs pursue the American dream. The SBA is dedicated to small businesses and provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses.