A New Mexico Nonprofit Corporation is sometimes called a New Mexico Not-For-Profit Corporation.

A New Mexico Nonprofit Corporation is an organization that is legally registered with the New Mexico Secretary of State.  While the federal government must approve the tax-exempt status of a New Mexico Nonprofit Corporation, a New Mexico Nonprofit Corporation is not initially registered with any US government agency.

A New Mexico Nonprofit Corporation is an organization that works to serve some kind of public interest rather than to provide financial benefit to any particular individuals or entities.

Many New Mexico Nonprofit Corporations have much in common with New Mexico For-profit Corporations.  This includes the liability protection that comes with a legally registered New Mexico Nonprofit Corporation.  A lot of New Mexico Nonprofit Corporations hire managers and employees just like a New Mexico For-profit Corporation does.  The application process for a New Mexico Nonprofit Corporation is very similar to that of a New Mexico For-Profit Corporation.

Contrary to popular belief, New Mexico Nonprofit Corporations can and do make money.  In a New Mexico Nonprofit Corporation, any profits must legally go directly back into the New Mexico Nonprofit Corporation.

The short answer is no. The state of New Mexico does not legally require a lawyer to form a New Mexico Nonprofit Corporation.  However, if there is anything about forming a New Mexico Nonprofit Corporation that you're not sure about you should seek the advice of a competent New Mexico lawyer, a New Mexico accountant, or both BEFORE you Incorporate.

Once you have made the decision to Form a New Mexico Nonprofit Corporation, a lawyer can file your documents and act as a middle man for a few hundred dollars an hour; or you can use an online service provider like All Business Documents to perform these services and save money that you can use in your new New Mexico Nonprofit Corporation.

A New Mexico Nonprofit Corporation is formed to provide some kind of public or community benefit.  Unlike the other types of New Mexico Corporations and LLCs, a New Mexico Nonprofit Corporation may be eligible for certain benefits, including tax exemptions on both the state and federal levels.  Depending on the nature of the organization, some New Mexico Nonprofit Corporations may not be eligible for tax exempt status.  A New Mexico Nonprofit Corporation may also be eligible for public and private grants.  A New Mexico Nonprofit Corporation is formed in a similar way as that of forming a New Mexico For-profit Corporation.  New Mexico Nonprofits must file Articles of Incorporation in the same way that New Mexico For-profit Corporations do.

A New Mexico Nonprofit Corporation comes with the same liability protection as the other types of New Mexico Corporations.  The main difference between a New Mexico Nonprofit Corporation and a New Mexico For-profit Corporation is how the profits of the New Mexico Corporation are distributed,  In a New Mexico For-profit Corporation profits can be distributed to shareholders.  New Mexico Nonprofits are legally required to use the income to further a goal that benefits the community or some part of the public.

While most federal tax exempt organizations are Nonprofit Corporations, registering a New Mexico Nonprofit Corporation does not automatically qualify the New Mexico Nonprofit for tax exempt status at the federal level.  The IRS recognizes various types of tax exempt Nonprofit Corporations.  To receive federal tax exempt status a New Mexico Nonprofit Corporation must file forms with the Internal Revenue Service.  The forms can get very complex depending on the nature of the Nonprofit.

Also, a New Mexico Nonprofit Corporation cannot legally use its resources for propaganda or to further a political cause or to support a candidate for public office.

One of the major responsibilities of a New Mexico For-profit Corporation is to increase shareholder value.  For most New Mexico Corporations the pursuit of shareholder value is done without regard for specific benefits to the public.  The only benefits that matter are those that benefit the shareholders, who are the owners of the New Mexico Corporation.  New Mexico For-profit Corporations often face pressure to abandon social goals in order to increase their bottom line.

New Mexico Nonprofit Corporations are formed to provide some kind of public benefit but may be restricted in their ability to raise capital when they need to grow.

The state of New Mexico has created a new kind of For-profit Corporation which has a legal responsibility to include some kind of public benefit in their Corporate operating requirements.  A New Mexico Corporation of this kind is called a New Mexico Benefit Corporation or a New Mexico B Corporation.

Benefit Corporations are a hybrid between a For-profit and nonprofit Corporation.  Operating capital is easier to raise for a New Mexico Benefit Corporation and the New Mexico Benefit Corporation is required to provide some kind of public benefit.

Benefit Corporations do not have any special tax breaks or benefits.  Benefit Corporations are taxed just like any other New Mexico Corporation is taxed.

To qualify as a New Mexico Benefit Corporation, a Corporation must have an explicit social or environmental mission, and a legally binding fiduciary responsibility to take into account the interests of workers, the community and the environment as well as its shareholders.  A New Mexico Benefit Corporation must also publish independently verified reports on its social and environmental impact alongside its financial results. 

Some examples of the specific public benefit that a New Mexico Benefit Corporation must provide, among others, include:

• Providing low-income or under served individuals or communities with beneficial products or services
• Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business
• Preserving the environment
• Improving human health
• Promoting the arts, sciences or advancement of knowledge

No one person or group of people can own a New Mexico Nonprofit Corporation.  Once it is incorporated, the New Mexico Nonprofit Corporation is a separate legal entity from its founders, directors, officers, and employees.  The New Mexico Nonprofit Corporation itself owns assets of the business and is entitled to receive all revenues from its operation.  Any equity in a New Mexico Nonprofit Corporation belongs to the organization itself, not to the founders, board of directors or staff.

In addition, a New Mexico Nonprofit Corporation cannot be sold to another individual, corporation or organization.

Contrary to popular belief a New Mexico Nonprofit Corporation may actually make a profit.  Many New Mexico Nonprofit Corporations derive much of their funding from tax-exempt donations.  Sometimes a New Mexico Nonprofit Corporation can receive more in donations that the costs to actually run the organization.

A New Mexico For-Profit Corporation may distribute any excess assets to its owners or shareholders.  There is no distribution of assets in a New Mexico Nonprofit Corporation.

In a New Mexico Nonprofit Corporation all of the money earned by or donated to the New Mexico Nonprofit organization is used in pursuing the organization's objectives as stated in its Articles of Incorporation.  Any excess capital after the close of the New Mexico Nonprofit Corporation's fiscal year must be kept in the New Mexico Nonprofit's accounts.

The state of New Mexico does not have a Corporate income tax so there is no need for a Nonprofit Exemption from New Mexico Corporation income taxes.

501(c) refers to a section of IRS code which deals with tax exempt organizations including, but not limited to, Nonprofit Corporations.

The most common type of tax-exempt organization falls under section 501(c)(3) of the IRS code.  This section of the IRS code allows a New Mexico Nonprofit organization to be exempt from federal income tax if its activities include any of the following purposes:

• Charitable
• Religious
• Educational
• Scientific
• Literary
• Testing for public safety
• Fostering amateur sports competition
• Preventing cruelty to children or animals

There are other types of 501(c) tax exempt organizations defined in the IRS code - 29 of them - but 501(c)(3) tax exempt organizations are by far the most common in the state of New Mexico and the US.

One advantage to qualifying to be a 501(c)(3) tax exempt organization is that most foundations will only make grants to 501(c)(3) Nonprofits. 

Tax exemption does not excuse a New Mexico Nonprofit organization from maintaining proper records and filing any required annual or special-purpose tax returns if they are required.  Failure to file required returns such as Form 990 (Return of Organization Exempt From Income Tax) may result in fines.

One prohibition for 501(c)(3) organizations is that they are prohibited from conducting political campaign activities to intervene in elections to public office.  There are, however, provisions which may allow some 501(c)(3) organizations to legally lobby to influence legislation.

BEFORE you apply with the IRS for 501(c)(3) Tax Exempt status it will need the following:

• Articles of Incorporation approved by the New Mexico Secretary of State
• Bylaws
• Federal Employer Identification Number (EIN)
• Statement of purpose that meets IRS requirements
• Statement that your Nonprofit Corporation will not engage in prohibited political or legislative activities
• A Plan of Dissolution describing the distribution of assets upon dissolution

There is also very specific language which needs to be included in your Articles of Incorporation which are filed with the New Mexico Secretary of State if you want to get 501(c)(3) Tax Exempt Status.

When a Nonprofit Corporation dissolves all remaining assets must be distributed to other active Nonprofits.  None of the remaining assets can be distributed to any directors, members or staff.