How to Dissolve an LLC in New Mexico: A Simple Guide

Closing a business is rarely simple, but dissolving your LLC in New Mexico follows a pretty straightforward process. You’ll need to settle debts, file some paperwork, and handle tax obligations before you can officially end your business.

To dissolve an LLC in New Mexico, you have to file Articles of Dissolution with the Secretary of State and pay a $25 filing fee.

The dissolution process protects you from future liabilities and makes sure your business affairs are actually wrapped up. If you don’t dissolve formally, you could still be on the hook for annual reports and tax filings, even if your business isn’t operating anymore.

The New Mexico Secretary of State now requires all business filings online through their Business Portal.

Key Takeaways

• Filing Articles of Dissolution with the New Mexico Secretary of State is required to legally terminate your LLC.
• Settle all tax obligations and notify creditors before dissolving your LLC to avoid personal liability.
• The Secretary of State requires online submission of dissolution paperwork through their portal as of December 2024.

Save the Hassle and Get Bizzee to Do It For You

As you can see, there is considerable work in doing a dissolution and in the interests of ensuring it is done correctly, many people use a service like Bizee to do the dissolution. It is quick, easy and comparatively cheap.

Legal Requirements to Dissolve an LLC in New Mexico

Dissolving an LLC in New Mexico means following legal procedures set by the state. You’ll need to make some internal company decisions, fill out official paperwork, and comply with state regulations to shut down operations properly.

Reviewing the Operating Agreement

Start by reviewing your company’s Operating Agreement. This document usually spells out exactly how you’re supposed to handle dissolution.

Check your Operating Agreement for these points:

• Dissolution triggers – What events require dissolution
• Voting requirements – The percentage of members needed to approve dissolution
• Asset distribution – How assets get divided among members
• Notification timeline – How much notice you need to give for meetings about dissolution

If your LLC doesn’t have an Operating Agreement, New Mexico state law steps in. The New Mexico Limited Liability Company Act gives the default rules for how to dissolve.

Operating Agreements are legally binding, so following the process in that document helps you avoid disputes with other members.

Member Approval for Dissolution

New Mexico law says the LLC members need to approve the dissolution before you can move forward. The voting requirements usually match what’s in your Operating Agreement.

Most of the time, you’ll need:

• A formal meeting of all LLC members
• Notice to all members (according to your agreement)
• A vote that meets the required threshold (often majority or two-thirds)
• Written documentation of the decision

Once you get approval, draft and sign a formal Resolution to Dissolve. This document proves you followed the right steps and that everyone agreed to close the business.

The resolution should include the date of the vote, names of the members present, voting results, and reasons for dissolution. Keep this with your business records, since you might need it for state filings.

State Statutes and Compliance

New Mexico has specific requirements for LLC dissolution. You’ll need to file Articles of Dissolution with both the New Mexico Secretary of State and the Public Regulation Commission.

Your Articles of Dissolution must include:

• The LLC’s name
• The effective date of dissolution
• Reason for dissolution
• Statement that all debts are paid or provided for
• Statement that assets have been distributed

A filing fee of $25.00 goes with your submission, payable to the New Mexico Secretary of State.

Before you file, make sure your LLC is in good standing. That means all tax filings are current so you don’t get hit with penalties. The New Mexico Taxation and Revenue Department expects you to settle all tax obligations before you officially close up shop.

Step-By-Step Process to Formally Dissolve Your New Mexico LLC

Dissolving your New Mexico LLC means following legal procedures to close your business. The state requires you to file paperwork, settle debts, and cancel permits.

Filing Articles of Dissolution

To formally dissolve your LLC, file Articles of Dissolution with the Secretary of State. This officially ends your business’s legal existence. The filing fee for Articles of Dissolution is $50.

Before you file, check your LLC’s Operating Agreement for any specific procedures. Most agreements require a member vote to approve dissolution.

The Articles of Dissolution form asks for:

• LLC name and filing number
• Date of dissolution
• Reason for dissolution
• Confirmation that debts are paid
• Signature of an authorized representative

You can submit the form online through the Secretary of State’s website or by mail. Processing usually takes about a week or so.

Notifying Creditors and Settling Debts

Before you finish dissolving, settle all debts and let your creditors know the LLC is closing. This helps prevent claims against members later.

Your LLC should:

• Make a list of all creditors
• Send written notices to each one
• Pay off debts
• Resolve any disputed claims

Be sure your tax filings are up to date before closing. If you skip this, you might face penalties or delays.

Distribute any leftover assets to members based on ownership percentages or what your agreement says. Keep good records of these settlements to protect yourself from future claims.

Cancelling Licenses and Permits

The last step is canceling all business licenses, permits, and registrations. This keeps you from racking up fees or running into legal headaches down the road.

Business owners should:

• Contact the New Mexico Taxation and Revenue Department to close tax accounts
• Submit final tax returns and mark them as “final return”
• Cancel business licenses with state and local agencies
• Notify the IRS to close your Employer Identification Number (EIN)
• Close business bank accounts after all transactions clear

If you had employees, terminate payroll accounts and file final employment tax returns. The LLC should also notify tax agencies and pay any remaining obligations to avoid penalties.

After you cancel everything, hang onto your cancellation confirmations for at least seven years—just in case.

Final Taxation and Financial Responsibilities

Dissolving your LLC in New Mexico means you have to take care of all your tax obligations at both the state and federal level. If you skip this, you could face penalties and headaches later.

Filing Final State and Federal Tax Returns

When you dissolve your LLC, you’ll need to file final tax returns with both state and federal authorities. For federal taxes, send in a final Form 1065 (for partnerships) or Form 1120 (for corporations) to the IRS, and make sure you check the “final return” box.

New Mexico wants you to file your final state income tax returns within 30 days of dissolving. You’ll need to:

• Submit Form CIT-1 for corporate income tax
• File PTE for pass-through entities
• Include a copy of your Articles of Dissolution

Hang onto your tax records for at least seven years after you dissolve. The New Mexico Taxation and Revenue Department may review your account to make sure all taxes are paid before you close.

Handling Employer and Sales Taxes

If your LLC had employees, you’ve got to take care of employment tax obligations. File your final wage reports and pay any outstanding unemployment insurance to the New Mexico Department of Workforce Solutions.

For sales taxes, you’ll need to:

• Submit a final CRS-1 form (Combined Reporting System)
• Pay any remaining gross receipts taxes
• Close your tax account with the Taxation and Revenue Department

To close your tax accounts, submit form ACD-31015 Business Tax Registration. It’s a good idea to request a tax clearance certificate as proof you’ve paid all liabilities.

If you don’t handle these tax obligations, you could be personally liable for unpaid taxes, and the state might hit you with penalties for missing returns—even after you’ve dissolved.

Using an LLC formation service

Dissolving an LLC in New Mexico comes with a fair amount of paperwork. Plenty of business owners prefer to use a professional LLC formation service to make things easier.

These services handle all the documentation and filings you need to dissolve your New Mexico LLC. They make sure everything’s done right and on time for the Secretary of State.

One big plus is that formation services know the specific requirements for dissolution in New Mexico, including the $50 filing fee for Articles of Dissolution.

Benefits of using an LLC formation service:

• Professional handling of paperwork
• Lower chance of filing mistakes
• Saves you a lot of time
• Proper notification to all government agencies
• Help with asset distribution documentation

Bizee is a popular choice for LLC dissolution in New Mexico. They offer complete packages to guide business owners through the process.

Formation services also help make sure you don’t miss key steps, like settling debts or filing final tax returns with the New Mexico Taxation and Revenue Department.

The cost of hiring a formation service can be worth it, especially when you consider the time saved and potential problems avoided by getting things done right the first time.

Post-Dissolution Considerations and Document Retention

After you dissolve your LLC in New Mexico, you still have a few important tasks to handle to fully close your business. Keeping good records and distributing assets correctly protects you from future liability headaches.

Distributing Remaining Assets

Once you’ve paid off all debts, it’s time to hand out whatever’s left to the LLC members. Usually, you’ll follow your operating agreement for this, sticking to ownership percentages unless your documents say otherwise.

New Mexico law puts creditors first. You’ve got to pay them before anyone in the LLC gets a dime. If you skip this order, LLC members could end up personally liable—and nobody wants that mess.

You’ll want to document every asset distribution. Here’s what you should keep on file:

• A detailed inventory of what’s left
• How much each asset is worth
• Calculations showing what each member gets
• Receipts signed by each member

Heads up: these distributions might have tax consequences. Members could need to report their share as capital gains or ordinary income, depending on what they receive. It’s not always straightforward, so a little extra attention here can save headaches later.

Recordkeeping and Legal Documentation

New Mexico asks businesses to keep certain records for a set time after dissolution. These files help shield former members from future claims that might pop up.

Documents to hang onto:

• Articles of Dissolution and confirmation from the Secretary of State
• Final tax returns and payments
• Proof of debt settlement
• Asset distribution records
• Meeting minutes approving dissolution
• Canceled business licenses and permits

Keep most financial and tax records for at least seven years. Stuff like formation documents, dissolution papers, and big contracts? Hang onto those forever—seriously, just play it safe.

It’s probably smart to make both digital and paper copies. Put them somewhere secure, but still reachable for all former members if anyone ever needs to dig something up.