Operating Agreement LLC New Mexico

A New Mexico Limited Liability Company (LLC) Operating Agreement is a written contract between the members that outlines the LLC’s internal rules, ownership structure, and management. The agreement cannot conflict with the Articles of Organization or the New Mexico Limited Liability Company Act. A signed copy should be retained to document the members’ agreement.

Is an Operating Agreement Required in New Mexico?

New Mexico law does not require LLCs to adopt a written Operating Agreement. If an Operating Agreement exists, the LLC must keep the current version and all prior versions at its primary business location.

Why an Operating Agreement Is Important

Protecting Limited Liability

A written Operating Agreement helps show that the LLC is a separate legal entity from its members, which supports limited liability protection, including for single member LLCs.

Documenting Ownership and Privacy

Because New Mexico does not require member names in the Articles of Organization, the Operating Agreement serves as proof of ownership. Financial institutions may request it when opening business accounts.

Establishing Internal Rules

If the Operating Agreement does not address an issue, New Mexico’s default LLC laws apply. A written agreement allows members to set their own procedures for voting, decision making, and membership changes.

Essential Topics to Include

• Company Information: LLC name, effective date, business purpose, and duration
• Registered Agent: Name and New Mexico office address
• Ownership: Members and ownership percentages
• Capital Contributions: Initial contributions and additional contributions require unanimous consent
• Financial Matters: Allocation of profits and losses based on the LLC’s tax classification
• Tax Classification: How the LLC will be taxed
• Management: Member managed or manager managed structure, including voting rights
• Membership Changes: Procedures for transfers, additions, or removals
• Administration: Recordkeeping and compensation for services
• Dissolution: Process for winding up the LLC

Management Structure Options in New Mexico

Member Managed

Members may bind the LLC and handle daily operations. Voting is typically based on ownership percentages.

Manager Managed

Designated managers handle daily operations and may bind the LLC. Members retain voting authority for major actions.

Filing and Recordkeeping

The Operating Agreement is an internal document and is not filed with the New Mexico Secretary of State or any other agency. The Articles of Organization are filed with the state to form the LLC. The Operating Agreement must be kept on file, does not need to be notarized, and becomes enforceable when signed.