To dissolve a limited liability company one has to take up a set of required steps. In New Mexico, if you and the members of the LLC want to discontinue business, then it is necessary to dissolve their business legally to avoid any administrative and legal consequences. To dissolve an LLC in New Mexico, you are required to submit a complete Article of Dissolution to the Secretary of State. Before submitting the Article of Dissolution, one must follow the operating agreement.
If you have a New Mexico LLC (domestic or foreign) you must have an operating agreement. The first step towards the dissolution of New Mexico LLC is to follow the operating agreement. There are some points to be noted before proceeding with the official paperwork. At first, make sure all the members of the LLC are agreed to dissolve the business. Once all the members are ready, their consent should be recorded via voting. After casting their vote in favor of the dissolution, the legal process must be started. Here are the steps to address for dissolving New Mexico LLC.
On this page, you’ll learn about the following:
- How to Dissolve an LLC in New Mexico
- After Dissolving Your LLC
- Reasons Behind Dissolving New Mexico LLC
- New Mexico LLC Dissolution Review
How to Dissolve an LLC in New Mexico
Dissolution of New Mexico LLC requires three broad procedural steps. Having a New Mexico LLC Operating agreement, close all the tax accounts, and finally submit the Articles of Dissolution form to the New Mexico Secretary of State.
Step 1: Follow Your New Mexico LLC Operating Agreement
When you have started an LLC as a business entity, then there is an operating agreement that is formed. There are complete details of how the company will function and grow in that operating agreement, which acts as a comprehensive guide. There is also a dissolution process, which is added to your agreement. The common dissolution steps that almost every LLC follows are:-
First of all, the dissolution vote will take place among the LLC members in the dissolution meeting. If the majority is with the YES, then the process goes into legal proceedings.
- All the dissolution votes will be noted down and recorded with the minutes of the meeting or a consent form.
- After that, a formal date for dissolving the LLC will be decided.
- The next step is counting the LLC assets and dividing them among the stakeholders and members accordingly.
- Finally, the creditors of the business are notified, and the debts of the business are settled.
This is a general process. However, it is strongly recommended to seek professional help to avoid any complications when it comes to terminating an LLC.
Get a Professional Agent Service
When it comes to a limited liability company dissolution, it is important to get professional help. The New Mexico registered agent will guide you with everything you need to close your limited liability company. While choosing a registered agent make sure they have a physical street address in the state. A professional service provider helps you to file the Article of Dissolution and close your various tax accounts without any hassle. Below are the best LLC services we strongly recommend for you.
Step 2: Close All Tax Accounts
Every action that an official business takes is legally bound to some minimum business taxes. For that, various accounts, especially business entity tax account, are maintained by the state government with the help of various departments. You should consider all the taxes that you have paid for your LLC’s duration and make a list of them.
You must contact all government entities and clear the amount of outstanding taxes due until the date you have decided for dissolution. All the taxes must be paid in advance so that you don’t face any issues in the further process of shutting down your LLC.
Some of the common taxes that limited liability companies have to pay are:
- Unemployment insurance tax
- Employee withholding tax if your LLC has employees.
- If your LLC is engaged in selling taxable goods then they are liable to pay the sales and use tax.
Most of these taxes are normally filed, but some departments require official paperwork, without which it is impossible for the business to close their accounts. Apart from business taxes, federal taxes, personal income taxes, and franchise taxes are to be considered. For the franchise taxes, a franchise tax form is required.
That is why the LLC owner should go through the sales tax guide and hire an accounting service. If you want to do the accounting yourself or make accounting easy, try FreshBooks.
While dissolving the New Mexico LLC, the owner does not require to obtain a tax clearance certificate. However, if you have filed federal taxes, then you must go through the final return option on your IRS form.
The IRS form for the LLC that are classified as partnerships is form 1065, and those LLC’s who have registered themselves as corporate should check IRS form 1120.
Step 3: File Articles of Dissolution
There is a list of dissolution documents that you, as an LLC owner, have to file. Once these articles are filed, the legal existence of the LLC will be over. Like a New Mexico Articles of Organization, one has to file New Mexico LLC Articles of Dissolution. The dissolution procedure and filing the articles of dissolution form is very easy and is discussed below.
- First of all, the LLC owner(s) has to file the Article of Dissolution. There are multiple methods of filing available, such as file by mail, in-person drop, or/and online filing. To get the application form you need to visit the Secretary of State Website of New Mexico state.
- You can follow the filing instruction on the official portal so that the steps for dissolution will be easier to complete.
- In that particular SOS website, the LLC owner has to look for the Domestic LLC Articles of Dissolution page.
- If you want to dissolve New Mexico Foreign LLC then look for the Foreign LLC Dissolution process.
- There is a form available on this page, which is the article of dissolution you are looking for. You have to download that pdf form and start filling it.
- You must fill in all the important and legal information in the form, so you should be extra careful.
- After filling in all the important information, you must choose the mode of payment you want to use to pay the LLC dissolution filing fees.
- After filling in every detail, one should submit the form through an official mail address and make a payment.
- It takes 3-5 business days after filing of articles of dissolution if you are filing it by mail or in-person.
Secretary of State
325 Don Gaspar
Santa Fe, NM 87501
Filing Fee: $25
The LLC you owned is dissolved, and you are free from all the liabilities linked with the LLC and its taxes. A copy of both original articles and recorded articles should be submitted in front of the probate judge. Now it’s his call that he accepts your expedited dissolutions or not.
Points to Be Noted When Dissolving New Mexico LLC
Apart from these three steps, no major dissolution rules are there in New Mexico. However, there are some other tasks one has to keep in mind while dissolving an LLC legally.
There are some purposes of LLC that require some attention even after dissolution, known as winding up. The task of winding up includes.
- For a certain period, the property of a business requires preservation.
- If there is any civil case against the LLC, then the owner needs to finish them.
- Settle all the existing disputes of LLC.
- Transfer all the property of LLC to the names of partners.
- Release all the liabilities that the LLC owes to others.
- Rightful distribution of all the assets among members, according to their percentage of partnerships.
Cost of Dissolving LLC
LLC cost in New Mexico includes the formation as well as dissolution fees. To dissolve an LLC in New Mexico, LLCs have to file an Article of Dissolution. The filing fee is $25. The details are mentioned on the second page of the article dissolution filing form. Following are the ways to pay for the dissolution,
- You can select a payment pick-up option.
- There is an option of direct account transfer through your prepaid accounts.
- LLC owners can also use their Credit cards, providing their complete details and types. Along with that, an original signature is required to authorize the transaction state will make.
After Dissolving Your LLC
After you formally dissolve your LLC, your business name will not be reserved anymore. Any other business entity will be eligible to use your New Mexico LLC name immediately after 120 days of dissolving your LLC. On the other hand, if you have a foreign LLC in other states, then you must comply with the SOS of the state after the dissolution of your LLC in New Mexico. A registered agent can help you do the needful.
Reasons Behind Dissolving New Mexico LLC
A company needs proper documentation when we start it. It can be any company like an LLC or a partnership, but we will need to go through its regulations. But once someone gets a notice to dissolve an LLC in New Mexico, they will need to do it. The documents of the dissolution are necessary, and there is no way out of that. There can be a lot of reasons for this, let’s take a look at them,
- The company owners can ask for it voluntarily if there is no income.
- If a member dies, it is obligatory to dissolve.
- If the company doesn’t have enough funds for the salaries, it is better to dissolve.
- If the company has completed the time that was mentioned in the deed, it will be dissolved.
- The reason can be insanity, bankruptcy, or involuntary removal of a member of the company too.
Top Business in New Mexico!
There are plenty of businesses that make the economy of New Mexico whole. There are so many of these industries, and to get better profits, opt for the topmost sector of the state. It is all about how the person wants to start an LLC in New Mexico. With good knowledge about the work and industry, he can make a great fortune effortlessly. So here, check the top sectors of this state,
- Government enterprises: There are research laboratories that the government starts in the state. There are other enterprises such as schools, hospitals, military bases, and more, which also come under this category. With the sector, the state can make a contribution of $20.82 billion to the GDP too.
- Mining: The total value that this state gets for mining is 80%. They are known for mining petroleum, natural gas, coal, and others too. It is an excellent industry for the state which also establishes development in it. It also represents the GDP with a contribution of $15.07 billion it. The state of New Mexico is also known as the leading state for molybdenum.
- Finance and insurance: There is nothing that a state can get if it doesn’t have a sector of finance that works for them. Everyone needs to participate in the real estate, leasing, and rental industry as it is one of the core sectors promoting growth. It represents the GDP by $14.09 billion.
New Mexico LLC Dissolution Review
Time needed: 5 minutes.
Here’s a recap of the steps you must follow when dissolving your New Mexico LLC. Click on the steps in this list if you want to read the full detail.
- Follow Your New Mexico LLC Operating Agreement
Remember that when you started, you created an operating agreement. Use this agreement as a guide in proceeding with the dissolution of your LLC.
- Close All Tax Accounts
Make sure you close all your tax accounts to avoid incurring further costs.
- File Articles of Dissolution
File the article of dissolution to make it known to the state where your LLC operates is that you are indeed no longer in business.
What is the Cost to Dissolve an LLC in New Mexico
To dissolve an LLC in New Mexico you need to file the Articles of Dissolution with the New Mexico Secretary of State through mail by paying a filing fee of $25.
Dissolving a Limited Liability Company (LLC) in New Mexico is not a straightforward process and involves various costs and procedures, which the members of the LLC should carefully evaluate before initiating the dissolution. While an LLC is often seen as a flexible business entity that can easily dissolve or wind up operations, it is crucial to understand the legal and financial ramifications of dissolution.
The first step in dissolving an LLC is to ensure that all tax and legal obligations are met. There may be legal requirements for notifying creditors and government agencies of the intent to dissolve the LLC, as well as settling any outstanding debts or disputes. It is essential to adhere to all legal requirements and seek legal counsel if necessary, to avoid any potential legal problems or liabilities down the road.
Additionally, the LLC should close its bank accounts and file final tax returns before proceeding with the dissolution. If the LLC is co-owned or has multiple members, it is vital to follow the operating agreement and obtain written consent from all members to dissolve the LLC.
One of the most significant costs of dissolving an LLC in New Mexico is the filing fee. The state requires a fee of $100 to file either the Articles of Dissolution or the Certificate of Cancellation, depending on the manner in which the LLC was initially formed. The filing fee is a non-refundable fee, and in case the LLC was registered with an initial trade name, a notice of withdrawal must also be filed with an additional fee of $25.
The LLC may also incur additional legal fees and expenses in hiring an attorney to prepare and file the necessary forms, as well as drafting a resolution to authorize the dissolution.
Another cost to consider is the tax implications of dissolving an LLC. Depending on how the LLC was structured and taxed, the members may be required to pay taxes on the remaining assets of the LLC, such as any profits, shares, or Business Personal Property Taxes. The distribution of remaining assets among the members is another area that requires careful consideration to avoid any disputes or legal liabilities.
Furthermore, it is essential to anticipate any ongoing operational expenses during the process of dissolving an LLC. These include notifying vendors, terminating leases or contracts, resolved employee salaries and stipends, etc. Thus, a comprehensive plan for the winding-up operation and fulfillment of any outstanding obligations should be in place before dissolving the LLC.
In conclusion, dissolving an LLC can be nerve-wracking considering the several legal and financial obligations that come along with it. Hence as an entrepreneur, making all the necessary adjustments is paramount and seeking legal guidance should also be considered to ensure they escape the perils of having unfinished business upon dissolved or wound up operations. The cost to dissolve an LLC in New Mexico varies, and one needs to anticipate that based on potential unwinding obligations like employee benefits and operational expenses. Most importantly, members should not entirely focus on the total cost as nominal fees, causing trivial omissions, could cost members considerable losses shortly.
Yes, in New Mexico, there is a fee of $25 to be paid for filing the Articles of Dissolution. Articles of Dissolution must be submitted to the New Mexico SOS.
No, there is no requirement of revenue department clearance till the time the SOS of New Mexico accepts the dissolution form.
The name will also get deregistered with the dissolution of the LLC. But the name will not be allotted for the next 120 days. After that, if some business wants to name their LLC after the name chosen by you, then it is their choice.
If you have not dissolved your LLC, you are liable for business privilege tax, and if it is not paid on time, you are leveraged with 10% of the amount of tax or $50. After that, the additional penalties will increase by $1 per month. If it goes unpaid for a longer duration, then the chances of seizing your property can also recover the tax.
Yes, if you are dissolving your LLC, you have to pay some amount to the probate judge who was also present during your LLC formation in the probate office. The minimum fee of the judge is $50, which can vary.
Limited liability companies reduce owners’ personal liability. Having an LLC is quite cost-effective. However, if it is required to close down the business, then the dissolution process should be done legally. Get a professional service to get everything done. We hope this article helps you to close your LLC in New Mexico. If you have any query do let us know in the comment box.