Preliminary organization

• Create a living document which will contain headings for each government agency and the associated dates, account numbers, and status for each. There will be accounts and passwords, and a lot of information accumulated which you will need throughout the lifetime of the business (and even years after that).
• Create a separate new email address that you will use for official business. It is difficult to disentangle your personal email from businesses later.
• Define the nature of the business, and a short statement of purpose. It should be somewhat general to allow you to change your products and services over time without having to change this statement. Some businesses use a statement like “To engage in any legal business” but the state may not accept that, so it should be slightly more constrained, such as “To provide educational, transportation and related services”. As you go through the process, you will be requested to categorize your business and you should be consistent about this to each agency.
• Search for your proposed business name to ensure there is no existing business with the same name or a very similar one. Places to search include:
  • Search engine
  • Patent and trademark office: https://www.uspto.gov/
  • NM Secretary of State business search: https://enterprise.sos.nm.gov/search/business
• Research and determine the business structure. The main options are Sole Propietorship, Partnership, Limited Partnership, Limited Liability Partnership, Corporation (C-Corporation), Limited Liability Company (LLC), or Nonprofit. There are rules for each structure such as the number of people required to serve on the board, that you should be familiar with. Each structure is taxed differently, and liability is handled differently.
  • A note about Sole Proprietorships: These may be considered a “business” at the local level (requiring a license, depending on the activity), partly a business at the state level (a state CRS number may be required, but not Secretary of State filings), while the federal government does not treat it as a separate entity at all. Taxes are filed with your personal return, and there is no liability protection.
• Write your initial documents
  • Articles of Organization or Articles of Incorporation – Usually based on a template, this document sets up the business and is part of the initial filing with the state.
  • By-laws – This document lays out how decisions are made and the roles of the board of directors, and may be amended later. It may not be required depending on your structure, but is definitely required for nonprofits and corporations.

Local, State and Federal registration

You must do the steps in the order listed here, because some of the agencies will require information from the others.

• Register your business with the Secretary of State (SOS). This is required if you are a corporation, LLC, or nonprofit.
  • SOS home: https://enterprise.sos.nm.gov/
  • Your Articles of Organization or Articles of Incorporation can use a template form from here: https://enterprise.sos.nm.gov/forms/business
• Obtain your Federal Employers Identification Number (FEIN) from the IRS. The application forms, SS-4, are available at the IRS website, by telephone, fax, or the local IRS office. https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
• Anyone who engages in business in New Mexico must register with the state Taxation and Revenue Department, and receive a state tax ID number, sometimes called a Combined Revenue System (CRS) number.
  • Tax home: https://www.tax.newmexico.gov/
  • Apply using the TAP system here: https://tap.state.nm.us/TAP/_/
• Certain types of businesses must apply for a license with the NM Regulation and Licensing Department. These include contractors, alcohol retailers, financial institutions and others.
  • Regulation and Licensing home: https://www.rld.nm.gov/about-us/public-information-hub/online-services/
• Certain types of businesses must be inspected by the State Environment Department. These are mainly if food is served. This is potentially the most complex step in the process.
  • Environment Department home: https://www.env.nm.gov/
  • Forms: https://www.env.nm.gov/forms/
• The City of Las Vegas requires a business license
  • City license page: https://www.lasvegasnm.gov/general-7
  • If your business activity is not already permitted based on the zoning of the land used to conduct business, you may also need to apply for a zoning variance or zone change: https://www.lasvegasnm.gov/general-7-1#planningzoning
  • If the business has on-site customers, it will require a fire inspection: https://www.lasvegasnm.gov/lvfd
  • If you do short term rentals, such as Airbnb, the city also requires a Short Term Rental permit, which in turn requires a fire inspection: https://www.lasvegasnm.gov/general-7-1#planningzoning
  • If you run a business from a home, the city also requires a Home Occupation Application: https://www.lasvegasnm.gov/permits-and-applications
  • If the business involves sidewalk sales, the city also requires a Sidewalk Sales Permit: https://www.lasvegasnm.gov/permits-and-applications
  • If the business has a freestanding sign, the city may require a Sign Permit: https://www.lasvegasnm.gov/permits-and-applications
• A special note for non profits: Non profits are treated as businesses in some respects. The state requires that you open a nonprofit separately, and cannot convert a business to a nonprofit. The IRS, however, will convert any existing tax entity from for-profit to nonprofit. You can apply for nonprofit taxable status through the IRS after the business is established.

Handling money

• There is no rule about exactly how you do accounting and handle money, but generally you should have a separate bank account in the name of the business. You can open this after receiving the various ID numbers noted above.
• You can keep a ledger or receipts and expenses on paper or a spreadsheet, but if you have employees, processing payroll will be the most complex part of the accounting, and you should consider using a full accounting system, like Wave, Patriot, or Quickbooks.
• If you are doing point-of-sale (POS) transactions, or need to accept credit cards, a merchant account will be needed with vendors such as Stripe, Square, or Shopify. Some vendors also link with or provide full accounting systems.
• Consider business insurance, to protect your personal assets.
• A special note for business that do services but do not sell any product: While most states have a sales tax on products, New Mexico has a gross receipts tax. This unusual form of tax means that consulting and services are taxed if the customer is in the state, not just products.

Hiring

• Any time you hire an employee, you must report this in a couple places:
  • The NM New Hires Directory: https://nm-newhire.com/
  • The IRS requires a W-4 form to declare tax withholding, and an I-9 form for verifying eligibility to work. https://www.irs.gov/businesses/small-businesses-self-employed/hiring-employees
• As soon as you start paying employee wages you need to regularly fill out form ES802 on line with the New Mexico Department of Workforce Solutions. https://www.dws.state.nm.us/en-us/Unemployment/Unemployment-for-a-Business/Unemployment-Forms

Ongoing reporting and fees

• Keep a tickler file to remind you of each date and filing needed, and the last time it was filed. There can be dozens of steps that must be taken on a monthly, quarterly, semi-annual, or annual basis, and few people can just remember all this. Some of the main repeating tasks are listed here.
• The city requires renewal of the local business license.
• The Secretary of State may require regular filings to keep the business in good standing.
• NM Taxation and Revenue requires regular reporting and payment of payroll taxes and gross receipts taxes (two separate taxes). The frequency depends on your average earnings.
• NM Taxation and Revenue requires annual business tax filing.
• NM Department of Workforce Solutions requires quarterly filing and payment of state unemployment insurance, if you have employees.
• The Federal IRS requires quarterly filing and payment of payroll taxes, if you have employees.
• The Federal IRS requires annual filing of payroll (W-2 forms) and filing of 1099 forms for those paid as contractors, as well as business taxes. (Nonprofits fill out a different form, but it is still required annually.)
• Short term rentals, such as Airbnb, require payment of City of Las Vegas occupancy tax [MORE INFO NEEDED]
• If you needed a fire inspection, then you will likely need to contract with a fire safety vendor for annual certification of exit signs and other fire-related features.

Further information

Some other helpful resources:

• The Small Business Development Center is located on the Luna campus, and offers free help for all of the steps listed here.
  • https://www.nmsbdc.org/locations/las-vegas/
  • Director: Briana Montano-Baca – (505) 454-5349
• How to start a business in New Mexico: https://www.northwestregisteredagent.com/start-a-business/new-mexico
• Thirteen things you must do when hiring: https://ociesmallbusiness.org/hiring-your-first-employee-13-things-you-must-do/

Updates to this page

Please report any errors or omissions by sending email to both of these addresses: starluciaford@gmail.com, lasvegasfirst@gmail.com