How to Dissolve an LLC in New Mexico: A Step-by-Step Guide

Dissolving a New Mexico LLC is a crucial process for business owners who wish to officially close their company and end any legal obligations. Whether you’re closing your business due to financial reasons, new ventures, or retirement, following the correct legal steps is essential to avoid penalties or ongoing tax liabilities. In this guide, we’ll walk you through the process of dissolving an LLC in New Mexico, ensuring a smooth and hassle-free experience.

Why Dissolving Your LLC Properly Matters

Failing to properly dissolve your New Mexico LLC can result in unwanted tax liabilities, fines, or legal obligations. The state may still consider your LLC active, leading to additional fees and penalties. By formally closing your business, you protect yourself from these potential issues and ensure all loose ends are tied up legally.

Steps to Dissolve a New Mexico LLC

1. Review Your LLC Operating Agreement

The first step is to review your LLC’s Operating Agreement. Most agreements outline the process for dissolving the company, including member approvals and required procedures. If your LLC does not have an operating agreement, you will need to follow state regulations for dissolution.

2. Obtain Member Approval

If your LLC has multiple members, you must obtain approval to dissolve the business. The best way to document this decision is by holding a meeting and recording the vote in the meeting minutes. A written resolution, signed by all members, is also advisable.

3. Settle All Business Debts and Obligations

Before filing dissolution paperwork, ensure that all outstanding debts, taxes, and business obligations are settled. This includes:

  • Paying off creditors
  • Canceling leases or contracts
  • Settling outstanding employee wages or severance
  • Closing business bank accounts

4. File Articles of Dissolution with the New Mexico Secretary of State

To officially dissolve your LLC, you must file Articles of Dissolution with the New Mexico Secretary of State. This document notifies the state that your business is closing and will no longer operate.

How to File Articles of Dissolution:

  • Download the Articles of Dissolution form from the New Mexico Secretary of State’s website.
  • Complete the form with details about your LLC, including its name and reason for dissolution.
  • Submit the form along with the required filing fee (fees may vary, so check the official website for the latest costs).
  • Mail or file the form online if available.

5. Notify the IRS and State Tax Agencies

Once your LLC is officially dissolved, you need to notify the IRS and the New Mexico Taxation and Revenue Department. This ensures that you fulfill any final tax obligations and avoid future liabilities.

Steps to Close Tax Accounts:

  • File a Final Tax Return: If your LLC has been paying taxes, file a final return for both state and federal taxes.
  • Cancel Your EIN (Employer Identification Number): You can notify the IRS that your business is closed by sending a letter to the IRS office where you obtained your EIN.
  • Pay Any Outstanding State Taxes: If your LLC owes New Mexico sales tax, employment tax, or other state taxes, make sure they are paid in full before dissolving.

6. Cancel Business Licenses and Permits

Your LLC may hold various business licenses, permits, or registrations with local, state, or federal agencies. Contact the relevant authorities to cancel these documents to avoid renewal fees or future liabilities.

7. Notify Banks, Vendors, and Clients

To fully wrap up your business affairs, inform any remaining clients, vendors, or suppliers about your LLC’s closure. Also, close business bank accounts and cancel any recurring transactions linked to your company.


Illustration of LLC dissolution process

Frequently Asked Questions (FAQs)

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

The processing time for LLC dissolution depends on how you file. If you submit the Articles of Dissolution by mail, it may take several weeks for approval. Online filing (if available) can speed up the process.

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

If you fail to file Articles of Dissolution, your LLC will remain active in the state’s records. This means you could still be responsible for filing annual reports and paying fees, even if your business is no longer operating.

Can I reinstate my LLC after dissolution?

Yes, if you change your mind, you may be able to reinstate your New Mexico LLC, depending on state laws. However, you may need to file additional paperwork and pay reinstatement fees.

Final Thoughts

Dissolving a New Mexico LLC is a necessary step if you are closing your business. By following these steps, you can ensure a smooth and legally compliant dissolution process. From obtaining member approval to filing the Articles of Dissolution and settling taxes, taking the right approach can help you avoid unnecessary fees and legal complications.

If you need assistance with dissolving your LLC, consider consulting a legal or tax professional to guide you through the process. For more business and tax-related insights, stay connected with ALL CLEAR TAX.