Even in the “Land of Enchantment” of New Mexico, business owners can grow disenchanted with their business and the process of closing a limited liability company (LLC). Dissolving an LLC in New Mexico is often an unfamiliar process that requires careful planning and execution. Learning the dissolution requirements comes in handy whether your limited liability company has reached the end of its operational life or the members have decided to move on.

This step-by-step guide on how to dissolve an LLC in New Mexico will walk you through the procedure and help you discover the simplest way to close your LLC.

Understanding LLC Dissolution in New Mexico

LLC dissolution is the legal process of closing your limited liability company (LLC) and winding up its affairs. The LLC dissolution process in New Mexico involves settling any outstanding debts, distributing assets, and submitting the necessary paperwork to the New Mexico Secretary of State. Once completed, you will no longer have to deal with business taxes or the legal obligations of owning an LLC. The New Mexico Limited Liability Company Act provides a structured legal framework on how to dissolve an LLC in the state. To ensure you follow the correct procedures, you can consult an LLC dissolution service provider.

Why Dissolve an LLC in New Mexico?

Dissolving your New Mexico LLC might be necessary for several reasons. Here are a few situations where dissolution could be a suitable option for your LLC:

  • End of business operations: The formal dissolution process is the way to go if you no longer want to operate your LLC. You might decide to close the business due to retirement, a change in career, or any other reason that leads you to stop doing business.
  • Pursuing another business venture: If you plan to start a new business venture and focus all your resources and attention on it, dissolving your current LLC might be a good idea. This move allows you to close one chapter and start another.
  • Lack of profitability: If your LLC is not making profits and the future outlook does not seem promising, it might be more cost-effective to dissolve the LLC rather than continue incurring losses.
  • Legal reasons: There might be legal reasons for dissolving an LLC, such as a court order or if the LLC has been involved in illegal activities.
  • Disputes among members: Sometimes, disputes among members can lead to the decision to dissolve the LLC. This situation could be due to disagreements on the direction of the business, division of profits, or any other business-related issues.

How to Dissolve an LLC in New Mexico in 7 Steps

Dissolving an LLC in New Mexico requires following the steps listed below:

1. Review Your LLC’s Operating Agreement

Review your LLC’s operating agreement before starting the dissolution process. This document outlines how your LLC operates and how it can be dissolved, including specific provisions for dissolution, such as voting requirements, asset distribution, and creditor notice periods. Following these procedures will help prevent disputes and legal issues among LLC members.

2. Vote to Dissolve an LLC

Convene a meeting with all members to vote and document the date, time, and location of the meeting, the names of attendees, and the outcome in a written resolution. The LLC operating agreement will determine the number of votes required for approval, which can be either a simple majority or a supermajority. Specify the effective date of dissolution, which can be either the date of filing the Articles of Dissolution or a later date.

3. File Articles of Dissolution

Once you have the approval of your LLC members, file the Articles of Dissolution with the New Mexico Secretary of State. This document notifies the state of your LLC’s termination. Each state has specific filing requirements, so it’s essential to comply with New Mexico’s instructions. 

The necessary forms are on the Secretary of State’s website and require basic information about your LLC, including its name, address, date of formation, and reason for dissolution. A filing fee of $25 also needs to be paid.

4. Notify Tax Agencies and Pay Remaining Taxes

Inform the relevant tax agencies, settle any outstanding taxes, and file a final federal income tax return with the IRS and a final state income tax return with the New Mexico Taxation and Revenue Department, both marked as “final.” 

If your LLC employed people, file final employment tax returns, pay any payroll taxes owed, and cancel your employer identification number (EIN) with the IRS. Consult with a tax professional to ensure correct filing and avoid penalties or audits.

5. Inform Creditors and Settle Existing Debt

Notify your creditors, suppliers, customers, and other parties with a claim against your LLC by written notice. Include the LLC’s name and address, the dissolution date, a mailing address for claims, a deadline for submission, and a statement that unsubmitted claims will be barred. 

Also, publish a notice of dissolution in a newspaper in the county where the LLC’s principal office is located. Pay off or settle any existing debts or obligations using the LLC’s assets in order of priority. Seek legal advice if the assets are insufficient to cover all debts or if negotiations with creditors are necessary.

6. Wind Up Other Business Affairs

Tie up any loose ends related to your LLC, such as notifying suppliers and customers about the business closure and fulfilling any outstanding orders or contracts. You should also cancel any business licenses, permits, or registrations obtained from federal, state, or local authorities. 

Address employee matters, such as wage and benefit payments, taxes, and unemployment insurance, in compliance with labor laws. All company bank accounts, credit cards, or lines of credit should be closed. Finally, you must dispose of any business property or inventory owned or leased by your LLC.

7. Distribute Remaining Assets

Once all assets and profits have been accounted for, distribute them among LLC members according to their ownership interests or as agreed upon in the operating agreement. Record each member’s distribution and obtain their signatures on a receipt. Prepare a final accounting statement to show all income and expenses during the LLC’s existence and how they were allocated among members.

How Much Does It Cost to Dissolve an LLC in New Mexico?

Dissolving an LLC in New Mexico comes with a $25 filing fee for submitting the Articles of Dissolution to the Secretary of State. However, there may be additional costs for same-day processing, tax advice, and settling obligations with your registered agent. These costs vary based on your specific situation, so it’s wise to budget accordingly.

Should I Dissolve My LLC Myself or Hire an LLC Dissolution Service in New Mexico?

Dissolving an LLC can be complicated and time-consuming, requiring knowledge of legal procedures, paperwork, debt settlement, and more. Without experience in these areas, mistakes can happen, leading to potential legal issues. 

On the other hand, hiring a professional LLC dissolution service in New Mexico can simplify the process significantly. Experts in this field can handle all aspects of the process, ensuring accuracy and efficiency. 

doola Can Help With Your New Mexico LLC Dissolution

If you’re looking for a reliable LLC dissolution service in New Mexico, doola is here to help. Our three-step process makes it easy to dissolve your LLC. These steps include:

  • Collecting basic information from you.
  • Preparing and filing Articles of Dissolution and other necessary documents.
  • Informing you once the dissolution process is complete. 

You’ll experience an official and timely company closure. With doola, you can rest easy knowing that experts are handling everything related to your LLC dissolution. 

FAQs

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

The time it takes to dissolve an LLC in New Mexico can vary depending on factors such as how quickly all necessary paperwork is completed and submitted.

Can I dissolve my LLC without notifying my members in New Mexico? 

No, all members must be notified and agree to the decision to dissolve the LLC.

Can I dissolve my LLC if I have pending lawsuits in New Mexico? 

If your LLC has pending lawsuits, it may complicate the dissolution process. You should consult with a legal professional for guidance.

Can I cancel my EIN once my LLC is dissolved in New Mexico? 

Yes, once your LLC is dissolved, you can cancel your EIN by contacting the IRS.

What happens if I don’t properly dissolve my LLC in New Mexico? 

Failure to properly dissolve your LLC can result in ongoing tax liabilities and potential legal issues.

Can I reopen a dissolved LLC in New Mexico? 

In most cases, once an LLC is dissolved, it cannot be reopened. You would need to form a new LLC.

Lindsey Rudy
Lindsey Rudy
Content Specialist
Doola's website is for general information purposes only and doesn't provide official law or tax advice. For tax or legal advice we are happy to connect you to a professional in our network! Please see our terms and privacy policy. Thank you and please don't hesitate to reach out with any questions.
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