Last Updated 06 September 2017 | By:

How To Form a 501(c)(3) Nonprofit In New Mexico

How to Use this Guide

Use the guide below to form a 501(c)(3) nonprofit in New Mexico. Keep in mind that the process requires forming a nonprofit corporation and getting tax-exempt status with the IRS.

Since the overall process is extremely complex, we highly recommend consulting with an attorney or using a service like Harbor Compliance for personalized top-to-bottom nonprofit formation and obtaining IRS 501(c)(3) status.

Step 1) Secure Your Nonprofit Name

Choose a Business NameIf it were too simple to secure a proper name for your nonprofit it wouldn’t be any fun! First, it must be unique and unlike any other business entity name registered with the state. To discover any naming conflicts, conduct a Business Entity Search until you know you have something unique that’s also aligned with your core mission statement (as stipulated in your Articles of Incorporation).

Now, two other things – bookmark Article 8 in state law on Nonprofit Corporations and pay special attention to the fact that if needed, you can file an Application for Reservation of Corp. Name form that’s good for 120 days.

Filing Fee: $25

Step 2) Appoint A Registered Agent

Choose a Registered Agent

Your New Mexico Registered Agent is there so that your nonprofit always, and officially, receives important paperwork on time like state filings, legal notices, important tax forms, and so on. This is why they must be either a registered individual citizen or business entity in the state, have a physical street address, and be available during all regular business hours/days.

That said, you can hire an outside professional service and expect to pay up to $160/year, or get a certified agent free when you incorporate your nonprofit with a service like Harbor Compliance (see details). They handle this and more depending on your startup package.

Step 3) Select Incorporators & Directors

Choose the Initial DirectorsWhat are incorporators? That’s easy, this is the individual (you can have more than one) who signs and then files your nonprofit Articles of Incorporation with the state in step 5. They don’t have to be an officer or director. Speaking of directors, you’ll need to select at least 3 initial directors to oversee the nonprofit during formation until new more official directors can be voted on/in during your initial meeting in Step 7.

Bookmark the New Mexico Guide for Board Members of Charitable Orgs page because it has more details. To be frank, working with an attorney or incorporation provider really comes in handy during this foundational step as well because there are definitely corporate formalities to learn for newcomers.

Step 4) Draft Nonprofit Bylaws

Register an LLC

Incorporated nonprofits need to have bylaws, or rules, that first and foremost determine how it’s governed. They also state the mission of the nonprofit and steer it’s course. They’re essential! Common bylaws touch on topics like:

  • How meetings are to be conducted.
  • How new officers and directors are elected.
  • How voting takes place, disputes handled, and records kept/managed.
  • Adding/Amending bylaws (any changes must be reported to the IRS after incorporation).
  • How to handle other nonprofit organization formalities in the state of South Dakota.

If this is all new to you, use a savvy Corporate Bylaws Template which you can customize for your nonprofit and get an idea of the paperwork-side of bylaws.

Step 5) File Articles Of Incorporation

Business Licenses

Once all the previous steps are covered, and you and your board/members are ready, incorporators should sign and file or “execute” Articles of Incorporation with the Sec. of State. Information you’ll need includes:

  • The name, type, duration of existence, and statement of purpose (provisions for nonprofit vs corp);
  • Complete names & addresses of registered agent (and office), incorporators, and directors.
  • Any specific provisions/bylaws set forth as part of the internal operations of your organization.
  • A stipulation of apportioning assets to any 501(c)(3) upon termination of your organization.

Filing Fee: $25 with $100-$150 Expedited Options

Step 6) Start A Corporate Records Book

File Annual Reports & Publication RequirementsWhat we’re talking about here is a physical book, or some call it a binder, where you put copies of the most important documents that comprise your nonprofit organization: formation/registration, core licenses & permits, corporate minutes, huge contracts, annual reports and taxation documents, etc.

To get one for your nonprofit you can grab a quality records book at any nearby office supply store, order them online through Amazon, or get a professional Corporate Kit which let you brand the book/slip case, provide blank certificates, and more for as little as $99.

Step 7) Conduct Initial Meeting

Hold a Meeting with Your Board of Directors

For your first meeting assemble incorporators/directors and get ready to establish the foundation of your nonprofit. Be sure to record “minutes” of the meeting and all attendees and have it signed by directors for your records book. Topics you’ll cover will vary but should include:

  • Voting on the appointment of critical officers;
  • Voting on and approving/amending bylaws;
  • Establishing a tax year as well as an accounting period;
  • Approving initial transactions, committees, and more.

If you found the bylaws template useful, check out a similar Corporate Minutes Template you can also customize and use to provide initial structure until you and your board get the hang of things should it be necessary.

Step 8) Get An EIN

Get an EIN for Your LLC

An EIN, or Employer Identification Number, is a 9-digit number required by all business and nonprofit entities under law in order to effectively track their financial activity. Think of it as a social security number for your nonprofit, but it will also make it possible to legally hire paid employees if needed and open up a bank account in Step 10.

Almost every transaction your nonprofit engages in will require an EIN. That said, you can get one quickly and free of charge by applying online through the IRS Website.

Step 9) File For Federal And State Tax Exemptions

Small Business Taxes

Now’s the point to ensure your nonprofit is 100% compliant in terms of not only licenses/permits, but state and federal taxes. You should be able to apply for tax exempt status now that the corporation is established.

Two other resources we want to put on the table are the Albuquerque district office of the Small Business Administration and the New Mexico Small Biz-Dev Center because while not expressly focused on nonprofits they have access and connections to plenty of services you’ll find useful.

Step 10) Open A Business Bank Account

Best Business Bank Account

As a nonprofit you’re looking for financial utility and solutions that are geared for your needs – low fees, waved expenses, great online banking options, good interest rates (if your nonprofit maintains higher account balances) and other valuable services.

Take some time to shop around at local, state and national banks/credit unions until you find the best option. Also, if you haven’t already, consider appointing a Chief Financial Officer (CFO) who’s knowledgeable and can help. If needed, check out this brief breakdown of Nonprofit Accounts to gain a better understanding and be sure to keep your nonprofit account 100% separate from all others.

Need Help?

How To Form a 501(c)(3) NonprofitIf you’d like help forming a 501(c)(3) Nonprofit In New Mexico, we highly recommend looking into Harbor Compliance for personalized top-to-bottom nonprofit formation and obtaining IRS 501(c)(3) status.

They handle everything on your behalf and be on-call for questions you have. If you’d like more info, visit their website or read our review.