Types of Business Ownership
There are numerous business ownership types, these include:
But which kind of business is right for you?
That’s a longer discussion. We recommend you investigate each of the above links to expand your understanding of the types of business ownership, and then seek sound legal advice before committing to any kind of business structure. The following are the legal implications and considerations for the different types of business ownership in New Mexico.
Selecting the right type of business ownership can have legal implications.
Often the nature of the business itself dictates which type of business ownership you need. Federal, state or local laws could affect your choice of business ownership types. For example, if your business intends to raise capital by issuing securities, you would likely opt to form a corporation. That may require that you also comply with the New Mexico Securities Act and federal securities laws. The ownership of a business can be in the form of stock, limited liability company membership interests, limited partnership interests, notes, and investment contracts.
If your business will have no more than a few owners, you should determine whether you are required to register or file a claim of exemption with the Securities Division of the New Mexico Regulation and Licensing Department.
Trademarks for business ownership types in New Mexico.
The State of New Mexico does not require that a business register its use of a trade name (sometimes referred to as a fictitious name, “doing business as” or DBA). However, the use of a trade name that is different from the legal name of the business can have legal implications.
If the business has a unique trade name or mark that distinguishes it from other businesses, the business may want to register the mark with the New Mexico Secretary of State. Fortunately, New Mexico’s trademark and service mark registration law is designed to mirror federal trademark protection.
For business ownership types, it should be noted that the Secretary of State and the New Mexico Public Regulation Commission-Corporations Bureau, each maintain separate databases. That means that registration with one of these state offices may not prevent someone else from registering the same name with the other state office.
Legal compliance, licensing and permitting of business ownership types in New Mexico.
The New Mexico Regulation and Licensing Department regulate most of the occupation licensing laws, and they apply to nearly all businesses in some way.
Most professions, and many other business activities, such as construction activities and businesses serving alcohol, are also regulated by state law, and require compliance with licensing requirements.
Local governments may also have special permit requirements for certain businesses beyond what state requires. Businesses serving food may be required to obtain permits by the municipal or county government where the business is located.
Insurance companies, credit unions, escrow companies, trust companies and other business ownership types may also be required to comply with registration requirements and other applicable state laws.
Charities and non-profits in New Mexico.
If you want your business to be classified as a non-profit, no part of the income or profit may be distributable to its members, directors or officers. The corporation is formed by filing articles of incorporation with the New Mexico Public Regulation Commission and seeking non-profit determination by filing a Form 1023 with the IRS. Also, charitable corporations that solicit funds may be required to register and file reports with the New Mexico Attorney General’s Office under the Charitable Solicitations Act.
Businesses in other states and foreign corporations doing business in New Mexico.
If your business was initially established in another state, you may be required to register and qualify in order to do business in New Mexico. Foreign corporations and limited liability companies should contact the New Mexico Public Regulation Commission-Corporations Bureau. Foreign partnerships should contact the New Mexico Secretary of State.