The New Mexico limited liability company (LLC) operating agreement is a legal document that the members use to outline the operation processes of their company and define the scope of authority and interests of each company member.
The LLC operating agreement, or business operating agreement, also defines what the initial contribution of each member of the company is and, based on that, what their interest is in the company’s profit.
Is an Operating Agreement Required in New Mexico?
No, the operating agreement is not required to establish a company in New Mexico. However, parties still choose to draft the operating agreement when forming an LLC to optimize their business and prevent potential misunderstandings between the company members.
4 Main Types of Operating Agreements
In New Mexico, there are four main types of operating agreements the parties can choose from when establishing an LLC:
Types of Operating Agreements
Single-member LLC operating agreement: This type is created for LLCs with only one member. It helps to define the operating rules in the company and separate the identity of the company from the identity of the member as an individual.
Multi-member LLC operating agreement: Here, multiple members form the LLC, and the operating agreement is used to determine how the company will be operated and the status of each member in the company.
Member-managed LLC operating agreement: The members who decided to personally manage the LLC use this type of operating agreement to determine the scope of their managerial authority within the company.
Manager-managed LLC operating agreement: Here, the members who have decided to delegate their decision-making powers to the professional managers use the operating agreement to determine the scope of their manager’s authority.
Laws and Legal Requirements for LLC Operating Agreements in New Mexico
Chapter 53, Article 19 of the New Mexico Statutes regulates the status of LLCs in New Mexico.
Within this article, § 53-19-19 regulates the status of operating agreements in New Mexico.
§ 53-19-2(o) provides the definition of the operating agreement as follows:
“‘Operating agreement’ means a written agreement providing for the conduct of the business and affairs of a limited liability company and that agreement as amended in writing.”
How to Form a Limited Liability Company (LLC) in New Mexico
To form a limited liability company in New Mexico, you should follow the steps below:
How to Form a LLC in New Mexico
#1. Choose a Business Name For Your LLC
Before sending your business registration application, choose a business name for your LLC. The name should be distinguishable from other business names registered in New Mexico.
To check if your business name is distinguishable, you should do a business search on the Secretary of State website.
#2. Choose the Type of LLC
In New Mexico, there are two main types of LLCs, based on the place they are established:
Domestic LLCs: Used for the companies established and registered in New Mexico.
Foreign LLCs: Used for companies initially established outside of New Mexico but which are expanding their business there and are registering in New Mexico.
#3. Nominate an Agent
The last step before filing your application is to nominate a registered agent who will be the official point of communication on behalf of the LLC. The agent must be an individual with a registered address in New Mexico or an entity with the authority to operate in New Mexico.
#4. File the Registration Documents
The documents you must submit depend on the type of LLC you are registering.
For foreign LLCs, you should submit the Application for Registration. This application cannot be completed online.
#5. Pay the Required Fee
At this point, you should pay the company registration fee of $50 for domestic LLCs and $100 for foreign LLCs.
#6. Create your LLC Operating Agreement
Although not required by state law, many parties choose to create an operating agreement. This document will provide structure to their company's organization and optimize their business activities.