Starting a Nonprofit in New Mexico
Starting a Nonprofit in New Mexico is governed by the Chapter 53, Article 8 New Mexico Nonprofit Corporation Act.
Steps Involved in Starting a Nonprofit organization in New Mexico
Step 1) Choosing a Name for the Nonprofit organization – Unlike many other states, New Mexico Nonprofit organizations need not use corporate designators like ‘Co.’, ‘Corp.’, ‘Inc.’ etc with their names.
As per New Mexico statutes, the name of the Nonprofit organization should be distinguishable from the names of other entities operating out of the State.
Further the Name should not be indicative of a purpose different than the purpose for which the organization is being established.
Click on the link for factors to be kept in mind when choosing a Name for a Nonprofit organization. (opens in a new window)
Step 2) Drafting the Articles of Incorporation
As per New Mexico statutes, the articles of incorporation of a New Mexico Nonprofit organization must include the following clauses:
1. the corporate name of the Nonprofit organization that meets the requirements mentioned above.
2. the duration for which the nonprofit organization is being established.The duration may be mentioned as perpetual.
3. the purpose(s) for which the said nonprofit organization is being set up.
4. the initial registered office address of the Nonprofit organization and the name of the initial registered agent who would generally be available at the registered address to receive notices and demands on behalf of the organization.
5. the number of directors that would constitute the organization’s initial board of directors
6. the names and addresses of initial directors of the Nonprofit organization
7. the name and address of all the incorporators of the Nonprofit organization.
8.Any other legally valid provisions which the incorporators wish to include in the articles for the management and regulation of the affairs of the Nonprofit organization
9. A clause specifying the provision for distribution of assets in the event of liquidation of the Nonprofit organization in future.
Clauses mandatory for Organizations seeking 501(c)(3) tax exempt recognition
IRS prescribes certain clauses to be included in the Article of Incorporation, if a Nonprofit organization wishes to obtain section 501(c)(3) Tax exempt recognition. The clauses are as follows –
1) Purpose Clause: The Purpose Clause of the Article must include a statement that the Non profit organization is being organized for “charitable, educational, religious, or scientific purposes” as defined under Section 501(c) (3) of the IRS Code of 1954.
2) Inurement of Income: As per IRS requirements, the Article must include a statement that restricts inurements of the income of the organization for the benefit of its directors, officers or its members.
3) Legislative or Political Activities: IRS requires the Articles of Incorporation to include a clause prohibiting the Nonprofit organization from undertaking propaganda or attempting to influence legislation through lobbying or political campaigning.
4) Operational Limitations : As per IRS requirements, the Article should specifically restrict the Nonprofit organization from undertaking any activity which is not permitted under Section 501(c) (3) or Section 170(c) (2) of the IRS Code of 1954.
5) Dissolution Clause: An organization claiming tax exempt recognition must include a clause explaining the process to be followed for disposing the assets in the event of dissolution of the Nonprofit organization. As per IRS, such an organization must dispose its assets only to another 501(c)(3) exempt organization(s).
Click on the link to download the Sample Article of Incorporation for New Mexico Nonprofit organization.
Step 3) Filing of articles of incorporation.
The Fee payable for filing the Articles of Incorporation of a Nonprofit organization in New Mexico is $25.One copy is returned for the organizations record. However if the organization wants an additional certified copy an additional fee of $10 per certified copy must be paid. If the organization does not provide an extra copy of the Article that it wishes to be returned after being certified, it must also pay an extra reproduction fee of $1 per page (subject to a minimum $5) in addition to the $10 certification fee.
The fee must be paid by check or money order,payable favoring “New Mexico Public Regulation Commission (NMPRC)”.
Cash payment is not accepted by NMPRC.
Executing the Documents
The articles of incorporation prepared as above must be printed on white sheet of paper in duplicate copies and must be signed in original on both the copies on all pages by the Incorporators of the Nonprofit organization.
This is to be accompanied by an affidavit by the registered agent where he/she acknowledges his acceptance of appointment as the organization’s registered agent. If the registered agent is an organization, this affidavit is to be executed by the president or vice president of the organization acting as the registered agent of the new Nonprofit organization.
Where to file
The above documents along with a check for the requisite filing fee should be submitted to the corporation commission of the office of Secretary of state of New Mexico at:
PUBLIC REGULATION COMMISSION
CHARTERED DOCUMENTS DIVISION
P.O. BOX 1269
SANTA FE, NEW MEXICO 87504-1269
Queries if any regarding filing may be raised at (505) 827-4511
Birth of the organization
If the commission finds that the articles of incorporation and the affidavit to be properly filled and conforming to the law, it stamps the word “Filed” and the month, date and year of filing on all pages of the Article of Incorporation and issues a certificate of incorporation which is a conclusive evidence of the birth of the Nonprofit organization on the date of such a filing.