New Mexico Limited Liability Company Act

By Lisa Magloff

The New Mexico Limited Liability Company Act was adopted by the New Mexico legislature in 1993 in order to allow for the formation of Limited Liability Companies (LLCs.) The Act sets out how an LLC may be formed and regulated, and the duties and liabilities of the owners, who are called members. Many of the provisions of the New Mexico Act are similar to those in other states. In New Mexico, LLCs are formed by filing Articles of Organization with the New Mexico Public Regulation Commission.

Naming

The New Mexico LLC Act requires the name of the LLC to be distinguishable from the name of any other LLC registered in New Mexico. The name must also contain the words "Limited Liability Company" or "Limited Company" or the abbreviation "L.L.C.", "LLC", "L.C." or "LC". Names may be reserved in advance by filing an application with the Public Regulation Commission.

Articles of Organization

In New Mexico, the LLC Act specifies that the Articles of Organization must include the name and address of the LLC, the name and address of the registered office and registered agent, the period of duration, the type of management and whether the LLC can operate as a single-member LLC. The Act specifies that the members of the LLC must submit signed originals of the Articles of Organization, a duplicate copy and a statement by the registered agent accepting their appointment as registered agent.

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Operating Agreement

The New Mexico LLC Act does not require companies to have an operating agreement. However, without one, LLCs must follow the regulations given in the Act in relation to elements such as voting rights and admission of new members. The Act specifies that without an operating agreement, members can only vote in proportion to the value of their financial interest in the LLC. The Act also states that, unless an operating agreement states otherwise, a unanimous vote is necessary to add new members. Unless the operating agreement states otherwise, members in perpetuity are allowed to leave the LLC with 30 days notice and must receive the fair market value of their interests in the company.

Maintaining Records

The New Mexico LLC Act requires that all LLCs keep certain information on hand at the business address including the names and addresses of all members and managers; a copy of the articles of organization: a copy of the LLC's state, federal and local income tax returns and financial statements for the previous three years; a copy of the operating agreement; a statement of capital contributions of each members; a statement of any future contributions members have agreed to; and a statement detailing when members can make additional contributions or withdraw their capital. However, the Act also states that failure to maintain these records is not grounds for imposing personal liability on the members.

Leaving the LLC

The New Mexico LLC Act states that members cease to be members when they withdraw from the LLC according to the terms of the operating agreement or by a unanimous vote of the members. Unless stated otherwise in the operating agreement, the Act also states that a member of an LLC ceases to be a member when he assigns his interest to someone else, dies or is found incompetent by a court, files for bankruptcy or is found bankruptcy or agrees to liquidate a substantial part of his assets, for example, as part of a divorce proceeding. If the member is another LLC, it ceases to be a member in the event of the dissolution or winding up of that LLC.

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References

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