If you own a business that was created in a state other than New Mexico, you will need to qualify or register that business in New Mexico if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-New Mexico) limited liability company (LLC) to do business in New Mexico.
For New Mexico purposes, if your LLC is formed in another state, then it is known as a foreign LLC in New Mexico. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Wisconsin is a foreign LLC in Minnesota.
According to New Mexico’s LLC Act, you are required to register your foreign company with the state of New Mexico if you are “transacting business” in New Mexico.What does this mean? Well, like most states, New Mexico’s LLC Act does not specifically define the phrase “transacting business” in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws.
Like most states, New Mexico’s LLC Act specifies certain activities that do not constitute transacting business in the state. The items listed include:
For the actual legal description of each of these items, check Section 53-19-54 of the New Mexico Statutes.
If your LLC’s only activity in New Mexico is one or more of the listed items, you should not need to register with the state.
To register your business in New Mexico, you must file a Foreign Limited Liability Company Application for Registration with the New Mexico Secretary of State (SOS). You can download a copy of the application form from the SOS website.
To complete the form, you must provide more or less the same information that you need to create an LLC in your home state.However, since every state is a little different, there may be items that New Mexico asks for that you did not need to provide when you first organized your LLC.More specifically, for a New Mexico application for registration, you need to provide:
You must include a form stating that your New Mexico registered agent accepts appointment. A blank acceptance form is included with the application form available from the SOS.
In addition, you also must include a certificate of good standing or certificate of existence issued by the appropriate agency of the state where your LLC is organized (such as a secretary of state). The certificate may be original or electronic, and must be current within thirty days.
The application filing fee is $100.
If your LLC does business in New Mexico without being registered, it cannot bring a lawsuit in the state. In addition, the LLC will be liable for fees and penalties.Among other charges, this includes a potential civil penalty of up to $200 for each year business is transacted without being registered.However, not being registered does not invalidate your LLC’s contracts or prevent your LLC from defending a lawsuit in New Mexico. Also, a member or manager of the LLC is not liable for the LLC’s debts and obligations solely because the company transacted business in New Mexico without registration.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in New Mexico are similar. You will, however, have to use a different application form, Form FPR,Application for Certificate of Authority. See the New Mexico Secretary of State website for forms and filing instructions.