How to Dissolve an LLC in New Mexico – LLC Cancellation 2024 (original) (raw)

dissolve an LLC

Dissolving a business often involves complex procedures. However, for a limited liability company in New Mexico, dissolving it takes a handful of paperwork. When an LLC is formed in New Mexico, the owner(s) draft the operating agreement. If the owner(s) decide to dissolve the business, the dissolution takes place following the articles mentioned in the operating agreement.

In this article, LLCBuddy editors shared the ins and outs of dissolving an LLC in New Mexico. LLCs must file the Articles of Dissolution with the New Mexico Secretary of State like the formation certificate was filed at the time of forming an LLC in New Mexico. It takes a few days to process and a handful of fees to be paid to the SOS. Many people hire a professional service to do the paperwork to process it hassle-free.

How to Dissolve an LLC in New Mexico

At the time of forming an LLC, an operating agreement draft must be written. Generally, the process of dissolution takes place following the operating agreement (read: New Mexico LLC operating agreement). Before the dissolution process, there are a few things to consider in the LLC.

First, make sure all the members of the LLC agree 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.

Dissolution of New Mexico LLC requires three broad procedural steps. Having a New Mexico LLC Operating Agreement, closing all the tax accounts, and finally submitting the Articles of Dissolution form to the New Mexico Secretary of State.

Step 1: Follow the LLC Operating Agreement in New Mexico

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 in New Mexico.

Get a Professional Agent Service

When it comes to a limited liability company dissolution, it is important to get professional help. 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 in New Mexico that we strongly recommend for you.

LLC Service	Our Rating & Pricing	Top Features	Learn More
#1 TOP PICK	4.5/5 $0 + State Fees	100% accuracy guarantee Worry-free service Great customer support	Learn More
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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 accounts, 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 by the date you have decided to dissolve. All the taxes must be paid in advance so that you don’t face any issues in the 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.

Tax clearance

While dissolving the New Mexico LLC, the owner is not required 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 LLCs that are classified as partnerships is Form 1065, and those LLCs who have registered themselves as corporate should check IRS Form 1120.

BOI Reporting

If you’re going to dissolve your LLC this year, make sure to update your BOI reporting. From January 1, 2024, the Financial Crimes Enforcement Network (FinCEN) implied a rule to all businesses, including LLCs in New Mexico to file the BOI Report. The Beneficial Ownership Information (BOI) in New Mexico is a report that states about in and out of the company. This report must be up-to-date and submitted to the FinCEN before you proceed to the dissolution.

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 Organization. The dissolution procedure and filing the articles of dissolution form is very easy and is discussed below.

articles of organization

First of all, the LLC owner(s) has to file the Article of Dissolution. There are multiple methods of filing available, such as filing by mail, in-person drop, or/and online filing.
You can follow the filing instructions on the official portal so that the steps for dissolution will be easier to complete.
For offline filing, LLCs must download the form and submit it to the New Mexico Secretary of State physical office along with the state filing fee.
If you want to dissolve New Mexico Foreign LLC then look for the Foreign LLC Dissolution process.
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.

Filing	Forms and Details
Online Applications	Sign in to SOS
Offline Applications	Not Applicable
SOS Contact (if offline application is available)	Business Services Division, 325 Don Gaspar, Suite 300 Santa Fe, NM 87501
Filing Time	10 to 15 working days
Filing Fee	$25

The LLC you own 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 whether he accepts your expedited dissolutions or not.

Points to Be Noted When Dissolving an LLC in New Mexico

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.

Winding Up

Some purposes of LLC 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 the 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 costs in New Mexico include 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 in the articles of dissolution filing form. Following are the ways to pay for the dissolution,

You can select a payment pick-up option.
There is an option for 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 the state will make.

After Dissolving Your LLC

After you dissolve an LLC in New Mexico, you can reinstate or revive the same within a given time. In New Mexico, the LLC name will be available up to the time till SOS dissolves the LLC completely. After this, the name will be available to other LLCs. Besides, you might revive or reinstate the LLC in New Mexico if that is available. According to the New Mexico SOS, you can revive your LLC within 2 years.

Reasons Behind Dissolving an LLC in New Mexico

People always think they can leave the company without any notice and there will be no issue. But if you have an LLC that you created with a legal obligation, it needs to be ended that way. Yes, if someone will dissolve an LLC in New Mexico, they will have to do it while taking care of the government. For dissolving the company, there is always a reason. The reason can be voluntary or involuntary too. Let’s get to know about the involuntary reasons,

If the company was caught doing illegal business.
If the company’s member died due to some reason or went bankrupt.
The dissolution will be mandatory if the assets of the business are used unwisely.
If the time being of the company was already determined in the will, then the company will go into dissolution at that time.

Top Businesses in New Mexico

With the population of 2,135,024, New Mexico is one of the favorable places to start an LLC. According to several reports, starting an LLC for Tourist Services can be profitable as various places in the state showed steady growth in this business over the past few years. On the other side, based on the city or region you’re going to start your LLC, you can decide the type of business to start. Following are the top 5 businesses you can start in New Mexico.

Tourist Services
Event Planner
Bed and Breakfast Operator
Towing Company
Trucking Business

New Mexico LLC Dissolution Review – A Quick Recap

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 details.

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 Organization: File the article of dissolution to make it known to the state where your LLC operates that you are indeed no longer in business.

FAQs

How do I dissolve an LLC in New Mexico?

To dissolve an LLC in New Mexico, you must file Articles of Dissolution with the New Mexico Secretary of State.

What are the filing fees for dissolving an LLC in New Mexico?

The filing fee for dissolving an LLC in New Mexico is $50.

Can an LLC be involuntarily dissolved in New Mexico?

Yes, an LLC can be involuntarily dissolved in New Mexico for failing to file annual reports and pay taxes.

Do I need to notify creditors before dissolving my LLC in New Mexico?

Yes, you must notify creditors before dissolving your LLC in New Mexico.

How long does it take to dissolve an LLC in New Mexico?

The process of dissolving an LLC in New Mexico can take several weeks to complete.

What happens to LLC assets when it is dissolved in New Mexico?

LLC assets are typically liquidated and used to pay off any remaining debts and obligations before distributing the remaining funds to the LLC members.

Can I revive a dissolved LLC in New Mexico?

Yes, you can revive a dissolved LLC in New Mexico by filing for reinstatement with the Secretary of State.

What are the consequences of not properly dissolving an LLC in New Mexico?

If you do not properly dissolve your LLC in New Mexico, you may still be liable for taxes, fees, and other obligations.

Can I dissolve my LLC in New Mexico if it is still making a profit?

Yes, you can dissolve your LLC in New Mexico even if it is still profitable.

Do I need to have a majority vote to dissolve an LLC in New Mexico?

Yes, typically a majority vote of the members is required to dissolve an LLC in New Mexico.

What is the process for distributing assets after dissolving an LLC in New Mexico?

LLC assets are typically used to pay off debts and obligations before distributing any remaining funds to the LLC members.

Can I transfer any remaining assets to another entity when dissolving an LLC in New Mexico?

Yes, you can transfer any remaining assets to another entity when dissolving an LLC in New Mexico.

Do I need to notify the New Mexico Department of Taxation and Revenue when dissolving an LLC?

Yes, you must notify the New Mexico Department of Taxation and Revenue when dissolving an LLC in New Mexico.

Can I dissolve my LLC in New Mexico if it is involved in pending legal matters?

You may need to resolve any pending legal matters before dissolving your LLC in New Mexico.

Will dissolving my LLC in New Mexico affect my personal liability?

Dissolving an LLC in New Mexico does not automatically shield you from personal liability for any past or pending claims.

Can I dissolve my LLC in New Mexico if it owes taxes?

Yes, you can dissolve your LLC in New Mexico even if it owes taxes, but you must settle any outstanding tax debts.

Is there a specific form I need to use to dissolve an LLC in New Mexico?

Yes, you must file Articles of Dissolution with the New Mexico Secretary of State to officially dissolve your LLC.

Can I dissolve my LLC in New Mexico if it is in good standing?

Yes, you can dissolve your LLC in New Mexico even if it is in good standing.

Do I need to publish notice of the dissolution of my LLC in a local newspaper in New Mexico?

No, you are not required to publish notice of the dissolution of your LLC in a local newspaper in New Mexico.

Can I dissolve my LLC in New Mexico if it has outstanding debts?

Yes, you can dissolve your LLC in New Mexico even if it has outstanding debts, but you must address these debts during the dissolution process.

How do I notify the New Mexico Secretary of State that my LLC is being dissolved?

You must file Articles of Dissolution with the New Mexico Secretary of State to formally notify them that your LLC is being dissolved.

What information do I need to include in the Articles of Dissolution when dissolving an LLC in New Mexico?

The Articles of Dissolution must include the name of the LLC, the date of filing, and a statement that the LLC is in the process of being dissolved.

Can I dissolve my LLC in New Mexico if it is involved in a lawsuit?

You may need to resolve any legal matters before dissolving your LLC in New Mexico.

Do I need to obtain a tax clearance certificate before dissolving my LLC in New Mexico?

Yes, you must obtain a tax clearance certificate from the New Mexico Department of Taxation and Revenue before dissolving your LLC.

Can I dissolve my LLC in New Mexico if it has outstanding judgments against it?

Yes, you can dissolve your LLC in New Mexico even if it has outstanding judgments, but you may still be liable for these judgments.

Do I need to file a final tax return for my LLC in New Mexico before dissolving it?

Yes, you must file a final tax return for your LLC in New Mexico before dissolving it.

Can I transfer the LLC’s trade name to another entity when dissolving it in New Mexico?

No, you cannot transfer the LLC’s trade name to another entity when dissolving it in New Mexico.

Do I need to cancel my LLC’s business licenses and permits when dissolving it in New Mexico?

Yes, you must cancel your LLC’s business licenses and permits when dissolving it in New Mexico.

Can I dissolve my LLC in New Mexico if it is in the middle of a contract?

You may need to fulfill any outstanding contractual obligations before dissolving your LLC in New Mexico.

What is the fee for dissolving an LLC in New Mexico?

The fee for dissolving an LLC in New Mexico is $50.

In Conclusion

Dissolving a business is not an easy task as a lot of homework is involved with the process. The official process might have only a few steps, however, before and after dissolving the LLC, there might be a lot of other tasks. In this case, it is highly recommended to get a professional service. If you are looking to file an LLC at $0, then ZenBusiness is your answer.

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. This article shared the general steps. Let us know if you have any queries.