How To Start a Nonprofit in New Mexico in Ten Steps

Like any startup business, the first thing you should do is come up with an available name. Your name should reflect the spirit of your nonprofit and cannot already be used by another business in New Mexico. To find out if the name you want is available, use the New Mexico Secretary of State’s online business search. If nothing comes up, your chosen name is good to go!

Next, see if the name you want is already being used online or has already been claimed for a website. You can use the ICANN Domain Names Registration Lookup to check. If no one has taken the name, you can use it. You may want to register it as your own domain name to use for your website. Also, make sure a trademark doesn’t protect your name. You can search for registered trademarks on the United States Patent and Trademark Office (USPTO) website.

If you start a nonprofit, you need to have a group of people in charge called the board of directors. New Mexico state law and the IRS require at least three people on this board. The board of directors makes important decisions about how the nonprofit is managed, what projects it should work on, and how to spend its money. They also help ensure the nonprofit follows the law and stays true to its mission.

When choosing your board of directors, pick individuals who care about your nonprofit’s cause and have skills that can help. You might want to choose people who are good at planning and managing money or have experience in areas related to your nonprofit's work. Having people who are well-known in the community can greatly help with fundraising because their connections can attract support and resources for your nonprofit.

To form your nonprofit, you must file complete and file Nonprofit Corporation Articles of Incorporation with the New Mexico Secretary of State. You need the following information to meet the filing requirements:

• Nonprofit’s name

• Organization’s purpose

• Time period nonprofit will operate

• Registered agent’s name and physical address

• Nonprofit’s physical address for the principal place of business

• Names and addresses of the initial board of directors

• Names and addresses of incorporators

Each incorporator must sign the articles, and your registered agent or registered agent service must sign a Statement of Acceptance. The filing fee is $25. The Secretary of State now requires that all business filings be completed online. You can file your Articles of Incorporation by visiting the Secretary of State’s business services portal and creating an account. Once your filing is approved, you will receive your nonprofit’s Certificate of Incorporation.

Or you can let our trusted partner LegalZoom handle your nonprofit creation starting at $99 plus filing fees.

After filing your Articles of Incorporation, you must file an Initial Corporate Report with the New Mexico Secretary of State. The due date is 30 days after you receive your Certificate of Incorporation. This report includes the address of your nonprofit, a description of what your nonprofit does, and the names of all the leaders and board members. Once logged in to the Secretary of State’s online filing portal, you can access the Initial Corporate Report form.

A nonprofit organization needs a set of rules called bylaws to help it run smoothly and qualify for IRS tax-exempt status. Bylaws are written to explain how the organization works, what everyone’s jobs are, how and when leaders are chosen, when they have meetings, and how many people need to agree on big decisions. Nonprofits also need a conflict-of-interest policy that board members must sign. This is their promise to put the nonprofit's interests first and not use their position to make money for themselves.

When you have your first organizational meeting with the board of directors, you will choose the officers, adopt the bylaws and conflict of interest policy, and take care of other important management details. Be sure to write down what happens during the meeting. These notes are called “minutes” and should be kept with your nonprofit’s legal documents and other business records.

A nonprofit corporation needs an EIN for its organization. An EIN is like your nonprofit’s social security number and is important for opening bank accounts and other tax-related purposes. To get an EIN, you can go to the IRS website and fill out an online form called Form SS-4. Once complete, you will receive your EIN instantly and can use it for your nonprofit's financial and legal activities.

To avoid paying certain federal taxes, your nonprofit can apply for tax-exempt status as permitted by the Internal Revenue Code. You need to file one of the following forms to help the IRS understand what your nonprofit does and why it should be tax-exempt:

• If your nonprofit is a charity, religious group, or educational organization, you should fill out Form 1023 or, if eligible, the simpler Form 1023-EZ, which you submit online through the Pay.gov site.

• If your nonprofit is a social welfare group, use Form 1024-A.

• For other types of nonprofit organizations, like those under 501(a), use Form 1024.

Once your eligibility is determined, the IRS will send you a determination letter confirming your nonprofit’s tax-exempt status.

Obtain a New Mexico Business Tax Identification Number from the New Mexico Taxation and Revenue Department. You can apply online by submitting a Business Tax Registration Application through the Taxpayer Access Point. If your nonprofit is recognized as tax-exempt by the federal government under Section 501(c), you also qualify for state tax exemptions in New Mexico. This means that the money your nonprofit makes might not be subject to the state gross receipts tax. However, if a tax-exempt organization makes $1,000 or more from a business activity unrelated to its main purpose, it must fill out IRS Form 990 and send it to the IRS. In New Mexico, the organization must also file a corporate income and franchise tax return.

A nonprofit in New Mexico may avoid paying certain taxes on things it buys with a Nontaxable Transaction Certificate (NTTC). This certificate shows that the nonprofit doesn’t have to pay taxes on specific purchases related to its nonprofit work. You can apply for an NTTC through the New Mexico Taxation and Revenue Department's website.

Under the New Mexico Charitable Solicitations Act, charities existing, operating, or fundraising in the state must register with the New Mexico Office of the Attorney General. Register online using the Charitable Organization Registration Online System (NM-COROS). No fees are required. Review the New Mexico Department of Justice’s Charity Registration FAQs for more information.