What Is a New Mexico LLC Operating Agreement?
A New Mexico LLC operating agreement lets you establish your LLC’s governance and operational procedures. You can gain flexibility in how your LLC operates, allowing you to deviate from New Mexico’s default laws.
In your NM operating agreement, you can dictate terms for the following aspects of your LCC:
- Ownership breakdown
- Management structure
- Allocation of earnings and losses
- Distribution of voting power
- Dissolution rules
- Capital contributions
- Transfer of membership interest
- Procedures for amending your operating agreement
A New Mexico LLC operating agreement is useful for single-member and multi-member LLCs. A single-member operating agreement protects your limited liability status. A multi-member operating agreement offers the same benefits while also preventing disputes. It ensures there is a single document for members to refer to in case disagreements arise about how to run the LLC.
Is an LLC Operating Agreement Required in New Mexico?
No, an LLC operating agreement is not required in New Mexico. However, it’s highly recommended to have one on hand. Banks, investors, and other third parties may require you to present one before they engage in transactions with your LLC, such as loaning money or opening a business bank account. This document shows that your LLC is distinct and operates as its own entity that’s separate from your personal assets.
A New Mexico LLC operating agreement is an optional document that remains internal and private. However, you must file the articles of organization with the New Mexico Secretary of State to officially form your LLC.
Key Considerations for a New Mexico LLC Operating Agreement
As you record your LLC’s rules in your operating agreement, keep these considerations in mind to write a document that reflects your desired terms:
- Listing the owners can be helpful. NM Stat § 53-19-19 does not require the disclosure of members or managers on the publicly filed articles of organization. Therefore, you may benefit from listing the owners (members) and managers in your NM LLC operating agreement.
- Elect the voting power you want. NM Stat § 53-19-17 states that members vote in proportion to their share of the LLC’s profits. If you prefer a different voting setup, you can list it in your New Mexico operating agreement. For example, you can state that you want a per capita system, where each member gets one vote.
- Allocate profits and losses not according to the value of each member’s contributions. NM Stat § 53-19-22 establishes a default rule that distributes profits and losses based on each member’s contributions. If you want to split profits and losses differently, such as an even split, you can detail your preferences in your operating agreement.
- LLCs are member-managed by default. If you don’t outline a different setup, your LLC will be member-managed (NM Stat § 53-19-15). This means any member can make decisions that legally bind the LLC under a contract. If you’d like to establish a manager-managed LLC, you must record this rule in your New Mexico operating agreement and your articles of organization.
- Prevent members from withdrawing against your wishes. NM Stat § 53-19-37 lets any member voluntarily withdraw by giving 30 days’ written notice. You can prevent voluntary withdrawals or specify a triggering event for dissolution by recording your desired terms in your operating agreement.
New Mexico LLC Operating Agreement Sample
View our sample New Mexico LLC operating agreement template to see how to customize your LLC’s rules. Establish your preferences for voting, capital contributions, and dissolution using Legal Templates’s guided form. When you’re done, you can download copies in PDF or Word format. Print them as needed and provide copies to your LLC’s members and requesting parties.
