Partnership Agreement - General (New Mexico)

GENERAL PARTNERSHIP AGREEMENT

STATE OF NEW MEXICO

THIS GENERAL PARTNERSHIP AGREEMENT (this "Agreement") is entered into and made effective as of [__/__/____] (the "Effective Date"), by and among the following individuals and/or entities (each, a "Partner" and collectively, the "Partners"):

Partner A: [________________________________] ("Partner A")

• Type: ☐ Individual ☐ Corporation ☐ LLC ☐ Partnership ☐ Trust ☐ Other: [____]
• State of Residence/Formation: [________________________________]
• Marital Status (if individual): ☐ Single ☐ Married ☐ Domestic Partnership ☐ Other: [____]
• Address: [________________________________]

Partner B: [________________________________] ("Partner B")

• Type: ☐ Individual ☐ Corporation ☐ LLC ☐ Partnership ☐ Trust ☐ Other: [____]
• State of Residence/Formation: [________________________________]
• Marital Status (if individual): ☐ Single ☐ Married ☐ Domestic Partnership ☐ Other: [____]
• Address: [________________________________]

Partner C: [________________________________] ("Partner C") (if applicable)

• Type: ☐ Individual ☐ Corporation ☐ LLC ☐ Partnership ☐ Trust ☐ Other: [____]
• State of Residence/Formation: [________________________________]
• Marital Status (if individual): ☐ Single ☐ Married ☐ Domestic Partnership ☐ Other: [____]
• Address: [________________________________]

The Partners hereby form a general partnership (the "Partnership") pursuant to and governed by the New Mexico Uniform Partnership Act (NMSA §§ 54-1A-101 to 54-1A-1206) (the "Act") and the terms and conditions set forth in this Agreement.

RECITALS

WHEREAS, the Partners desire to form and operate a general partnership under the laws of the State of New Mexico for the purposes described herein;

WHEREAS, each Partner will make or has made the capital contributions described in Schedule A attached hereto;

WHEREAS, the Partners wish to set forth in writing their respective rights, duties, and obligations with respect to the Partnership;

WHEREAS, the Partners acknowledge that New Mexico is a community property state and that the community property laws (NMSA § 40-3-1 et seq.) may affect the characterization of capital contributions and partnership interests held by married partners;

WHEREAS, pursuant to the Act, a partnership is an entity distinct from its partners (NMSA § 54-1A-201), and this Agreement shall govern relations among the partners; and

WHEREAS, the Partners intend this Agreement to serve as the "partnership agreement" as defined in NMSA § 54-1A-101.

NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Partners agree as follows:

TABLE OF CONTENTS

1. Definitions
2. Formation; Name; Purpose; Term
3. Capital Contributions; Partnership Interests
4. Allocations; Distributions; Tax Matters
5. Management; Voting; Meetings
6. Representations and Warranties
7. Covenants and Restrictions
8. Books, Records, and Accounting
9. Insurance and Risk Management
10. Indemnification; Limitation of Liability
11. Transfer of Interests; Admission; Withdrawal
12. Dissociation; Dissolution; Winding Up
13. Default and Remedies
14. Dispute Resolution
15. General Provisions
16. New Mexico-Specific Provisions
17. Execution and Signature Blocks

ARTICLE 1: DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below.

"AAA" means the American Arbitration Association.

"Act" means the New Mexico Uniform Partnership Act, NMSA §§ 54-1A-101 to 54-1A-1206, as amended.

"Adjusted Capital Account" means, with respect to any Partner, such Partner's Capital Account as adjusted in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv).

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person.

"Agreement" means this General Partnership Agreement, including all Schedules and Exhibits, as amended from time to time.

"Bankrupt" means (a) filing a voluntary bankruptcy petition; (b) entry of an order for relief in involuntary bankruptcy; (c) a general assignment for the benefit of creditors; or (d) appointment of a receiver or trustee for substantially all assets.

"Business Day" means any day other than a Saturday, Sunday, or a day on which banks in the State of New Mexico are authorized or required to close.

"Capital Account" means the capital account maintained for each Partner in accordance with Section 3.5 and Treasury Regulation Section 1.704-1(b)(2)(iv).

"Capital Contribution" means, for any Partner, the total amount of cash and the agreed fair market value of property (net of liabilities) contributed to the Partnership, as set forth in Schedule A.

"Code" means the Internal Revenue Code of 1986, as amended.

"Community Property" means property that is classified as community property under the New Mexico Community Property Act (NMSA § 40-3-1 et seq.).

"Defaulting Partner" has the meaning set forth in Section 13.1.

"Dissociation" has the meaning ascribed under the Act.

"Effective Date" has the meaning set forth in the preamble.

"Fiscal Year" has the meaning set forth in Section 8.1.

"Force Majeure Event" has the meaning set forth in Section 15.14.

"Gross Receipts Tax" means the New Mexico gross receipts tax imposed under NMSA § 7-9-1 et seq.

"Losses" has the meaning set forth in Section 10.1.

"Majority Vote" means the affirmative vote of Partners holding more than fifty percent (50%) of the aggregate Percentage Interests.

"Managing Partner" has the meaning set forth in Section 5.5.

"Net Profits" and "Net Losses" mean, for each Fiscal Year, the Partnership's taxable income or loss determined in accordance with Code Section 703(a).

"Non-Defaulting Partner" has the meaning set forth in Section 13.2.

"Partner" and "Partners" have the meanings set forth in the preamble.

"Partnership" has the meaning set forth in the preamble.

"Partnership Interest" means a Partner's entire interest in the Partnership, including rights to profits, losses, distributions, and all other rights and obligations.

"Percentage Interest" means, for any Partner, the percentage set forth on Schedule A.

"Person" means any individual, corporation, partnership, LLC, trust, estate, association, or other entity.

"PTE" means pass-through entity, as used for New Mexico tax filing purposes (Form PTE).

"Separate Property" means property that is classified as separate property under the New Mexico Community Property Act (NMSA § 40-3-1 et seq.).

"Statement of Partnership Authority" means the statement described in NMSA § 54-1A-303, if filed with the New Mexico Secretary of State.

"Supermajority Vote" means the affirmative vote of Partners holding at least seventy-five percent (75%) of the aggregate Percentage Interests.

"Transfer" means any sale, assignment, pledge, hypothecation, encumbrance, gift, or other voluntary or involuntary disposition.

"Treasury Regulations" means the regulations promulgated under the Code.

ARTICLE 2: FORMATION; NAME; PURPOSE; TERM

2.1 Formation. The Partnership is hereby formed as a general partnership under the laws of the State of New Mexico, effective as of the Effective Date, pursuant to the Act. Under NMSA § 54-1A-201, a partnership is an entity distinct from its partners.

2.2 Name. The Partnership shall conduct its business under the name:

[________________________________]

or such other name as the Partners may approve by Majority Vote. The Partnership shall comply with any applicable trade name requirements under New Mexico law if conducting business under a name other than the Partners' true names.

2.3 Purpose. The purpose of the Partnership is to:

[________________________________]

and to engage in any and all lawful activities incidental, necessary, or ancillary thereto, as permitted under New Mexico law.

2.4 Principal Office. The principal office shall be located at:

[________________________________]
[________________________________]
[________________________________]

or at such other location as the Partners may determine by Majority Vote.

2.5 Registered Agent. If the Partnership files any statement with the New Mexico Secretary of State, the registered agent shall be:

Name: [________________________________]
Address: [________________________________]

The registered agent must maintain a physical street address in New Mexico.

2.6 Term. The Partnership shall commence on the Effective Date and continue until dissolved in accordance with Article 12 or as required by the Act.

2.7 Statement of Partnership Authority. The Partners may authorize the filing of a Statement of Partnership Authority with the New Mexico Secretary of State pursuant to NMSA § 54-1A-303.

☐ The Partners elect to file a Statement of Partnership Authority upon execution.
☐ The Partners elect NOT to file a Statement of Partnership Authority at this time.

2.8 Entity Status. Under the Act (NMSA § 54-1A-201), a partnership formed under New Mexico law is an entity distinct from its partners. A partner is not a co-owner of partnership property (NMSA § 54-1A-501).

ARTICLE 3: CAPITAL CONTRIBUTIONS; PARTNERSHIP INTERESTS

3.1 Initial Capital Contributions. Each Partner shall contribute the Capital Contribution set forth on Schedule A on or before the Effective Date.

3.2 Community Property Considerations.
(a) IMPORTANT: New Mexico is a community property state. If any Partner is married and contributing Community Property to the Partnership, the non-Partner spouse's written consent may be required under NMSA § 40-3-13 for the management and control of such property.
(b) Each married Partner who contributes Community Property shall obtain and deliver to the Partnership the written consent of such Partner's spouse, in substantially the form attached as Schedule E ("Spousal Consent").
(c) A Partnership Interest acquired with Community Property funds or during a marriage may be Community Property, regardless of which spouse is designated as the Partner.
(d) The Partners strongly recommend that each married Partner consult with independent legal counsel regarding the community property implications of joining this Partnership.

3.3 Additional Capital Contributions.
(a) No Partner shall be required to make additional Capital Contributions without written consent.
(b) Additional capital requests shall be pro rata unless otherwise unanimously agreed.
(c) Failure to contribute within thirty (30) days may result in dilution.

3.4 Interest on Capital. No Partner shall receive interest on Capital Contributions.

3.5 Return of Capital. No Partner may demand return of Capital Contributions except as expressly provided.

3.6 Capital Accounts. A separate Capital Account shall be maintained for each Partner in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv), increased by contributions and profit allocations, decreased by distributions and loss allocations.

3.7 Percentage Interests. Initial Percentage Interests are set forth on Schedule A and shall be adjusted only as expressly provided.

3.8 No Priority. No Partner shall have priority over any other Partner except as provided herein.

ARTICLE 4: ALLOCATIONS; DISTRIBUTIONS; TAX MATTERS

4.1 Allocation of Net Profits and Net Losses.
(a) Allocated in proportion to Percentage Interests.
(b) Intended to satisfy the "substantial economic effect" test under Treasury Regulation Section 1.704-1(b)(2).
(c) No allocation shall cause a deficit Capital Account in excess of any restoration obligation.

4.2 Special Allocations.
(a) Qualified Income Offset. As required by Treasury Regulation Section 1.704-1(b)(2)(ii)(d).
(b) Minimum Gain Chargeback. As required by Treasury Regulation Section 1.704-2(f).
(c) Section 704(c) Allocations. As required by Code Section 704(c) for contributed property.

4.3 Distributions.
(a) Cash available for distribution (after expenses, obligations, reserves, and applicable tax obligations) shall be distributed at such times and amounts as determined by Majority Vote, but not less frequently than [☐ quarterly ☐ semi-annually ☐ annually].
(b) Pro rata per Percentage Interests unless otherwise unanimously agreed.
(c) No distribution shall be made if the Partnership would become unable to pay debts as they come due.

4.4 Tax Matters.
(a) Tax Classification. The Partnership shall be treated as a partnership for federal and New Mexico tax purposes.
(b) Partnership Representative. [________________________________] is designated as the "partnership representative" under Code Section 6223.
(c) Federal Tax Returns. The Partnership shall file IRS Form 1065 and furnish K-1s within seventy-five (75) days of Fiscal Year end.
(d) New Mexico Tax Returns. The Partnership shall file New Mexico Form PTE (Pass-Through Entity Income and Information Return) with the New Mexico Taxation and Revenue Department. See Article 16 for detailed New Mexico tax requirements.
(e) Tax Elections:

• ☐ Election under Code Section 754
• ☐ Cash method of accounting
• ☐ Accrual method of accounting
• ☐ Election out of Centralized Partnership Audit Regime (if eligible)
• ☐ New Mexico Pass-Through Entity Tax (PTET) election for entity-level taxation at 5.9%

4.5 Tax Distributions. The Partnership shall distribute to each Partner, on a quarterly basis, amounts sufficient to pay estimated federal and New Mexico income tax obligations attributable to Partnership income. Tax Distributions shall be calculated using the highest combined marginal federal and New Mexico income tax rate applicable to any Partner (New Mexico rates range from 1.7% to 5.9% for individuals as of 2025).

ARTICLE 5: MANAGEMENT; VOTING; MEETINGS

5.1 General Management. The business shall be managed collectively by the Partners, subject to voting requirements.

5.2 Voting. Decisions require a Majority Vote. Voting power is proportional to Percentage Interest.

5.3 Major Decisions. The following require unanimous consent:
(a) Amendment of this Agreement;
(b) Admission of a new Partner;
(c) Merger, conversion, or reorganization;
(d) Sale of all or substantially all assets;
(e) Voluntary dissolution;
(f) Indebtedness exceeding $[________________________________];
(g) Filing or settling lawsuits exceeding $[________________________________];
(h) Contracts exceeding [____] years;
(i) Related-party transactions;
(j) Change in business purpose;
(k) Filing of Statement of Partnership Authority;
(l) Election of PTET status; and
(m) Filing of voluntary bankruptcy.

5.4 Supermajority Decisions. The following require Supermajority Vote:
(a) Removal of the Managing Partner;
(b) Capital expenditures exceeding $[________________________________];
(c) Guarantees exceeding $[________________________________]; and
(d) Partner compensation matters.

5.5 Managing Partner.
(a) [________________________________] is designated as the initial Managing Partner.
(b) Removable by Supermajority Vote.
(c) May delegate ministerial duties.

5.6 Meetings.
(a) Regular meetings: at least [☐ monthly ☐ quarterly ☐ semi-annually ☐ annually].
(b) Special meetings: upon five (5) Business Days' written notice.
(c) Meetings may be in person, by telephone, or by video conference.

5.7 Quorum. Majority of Percentage Interests constitutes a quorum.

5.8 Written Consent. Action may be taken by written consent of the requisite Partners.

5.9 Minutes. Minutes and records of written consents shall be maintained.

ARTICLE 6: REPRESENTATIONS AND WARRANTIES

Each Partner represents and warrants as of the Effective Date:

6.1 Authority. Full legal right, power, and authority to execute and perform this Agreement.

6.2 Binding Obligation. This Agreement is a legal, valid, and binding obligation.

6.3 No Conflict. Execution does not violate any law, order, or agreement.

6.4 Litigation. No pending or threatened action materially adverse to performance.

6.5 Investment Representation. Partnership Interest acquired for own account and not for distribution.

6.6 Sophistication. Each Partner is sophisticated and has consulted independent advisors.

6.7 Title to Contributions. Good and marketable title to contributed property, free of liens (except as disclosed).

6.8 Community Property Disclosure. Each individual Partner who is married has disclosed to the other Partners whether any portion of such Partner's Capital Contribution constitutes Community Property, and if so, has obtained or will obtain the required spousal consent (Schedule E).

6.9 Survival. Representations survive for the duration of the Partnership.

ARTICLE 7: COVENANTS AND RESTRICTIONS

7.1 Good Faith. Each Partner shall act in good faith and in accordance with the duties of loyalty and care under the Act.

7.2 Compliance with Law. The Partnership and each Partner shall comply with all applicable laws, including the Act, the New Mexico Human Rights Act (NMSA § 28-1-1 et seq.), and all tax laws.

7.3 Devotion of Time. Each Partner shall devote such time as reasonably necessary to Partnership business.

7.4 Non-Compete.
(a) During the Partnership and for [____] months following dissociation or dissolution, no Partner shall compete within: [________________________________].
(b) Exception: less than five percent (5%) ownership of publicly traded securities.
(c) New Mexico courts evaluate non-compete agreements for reasonableness in scope, duration, and geographic area.

7.5 Confidentiality.
(a) Each Partner shall maintain strict confidentiality of all proprietary information.
(b) Obligation survives for [____] years.

7.6 Non-Solicitation. During the term and for [____] months thereafter, no Partner shall solicit Partnership employees, contractors, customers, or clients for competitive purposes.

7.7 Notice of Material Matters. Prompt written notice of material breaches, adverse changes, litigation, or dissociation events.

7.8 Gross Receipts Tax Compliance. The Partnership shall register with the New Mexico Taxation and Revenue Department for gross receipts tax purposes, if applicable, and shall timely collect and remit all gross receipts taxes on taxable transactions (NMSA § 7-9-1 et seq.).

ARTICLE 8: BOOKS, RECORDS, AND ACCOUNTING

8.1 Fiscal Year. The calendar year, ending [________________________________].

8.2 Method of Accounting. [☐ Cash ☐ Accrual] method, in accordance with GAAP.

8.3 Books and Records. The Partnership shall maintain:
(a) Current Partner list;
(b) This Agreement and amendments;
(c) Tax returns and financial statements;
(d) Filings with the Secretary of State;
(e) Minutes and written consents;
(f) Records of Capital Contributions, distributions, and Capital Accounts; and
(g) Copies of all spousal consents (Schedule E).

8.4 Inspection Rights. Each Partner may inspect and copy books and records upon reasonable notice during normal business hours, in accordance with NMSA § 54-1A-403.

8.5 Financial Statements. The Partnership shall provide:
(a) Annual statements within ninety (90) days of Fiscal Year end;
(b) Quarterly unaudited statements within forty-five (45) days; and
(c) Additional information upon reasonable request.

8.6 Bank Accounts. Funds in Partnership-name accounts. Withdrawals exceeding $[________________________________] require [☐ one ☐ two] signatures.

8.7 Independent Accountant. The Partners may engage an independent CPA annually.

ARTICLE 9: INSURANCE AND RISK MANAGEMENT

9.1 Required Insurance. The Partnership shall maintain:
(a) Commercial general liability: not less than $[________________________________] per occurrence and $[________________________________] aggregate;
(b) Property insurance at replacement cost;
(c) Workers' compensation as required by New Mexico law (NMSA § 52-1-1 et seq.);
(d) Professional liability, if applicable: not less than $[________________________________];
(e) Business automobile insurance, if applicable; and
(f) Such other insurance as determined by Majority Vote.

9.2 Additional Insured. Partners shall be named as additional insureds where feasible.

9.3 Annual Review. Insurance shall be reviewed annually.

9.4 Risk Management. Appropriate risk management policies shall be maintained.

ARTICLE 10: INDEMNIFICATION; LIMITATION OF LIABILITY

10.1 Mutual Indemnification. Each Partner (the "Indemnifying Partner") shall indemnify, defend, and hold harmless the other Partners and the Partnership from Losses arising from:
(a) Breach of this Agreement;
(b) Negligent or wrongful acts or omissions;
(c) Willful misconduct or fraud; or
(d) Unauthorized acts outside the scope of authority.

"Losses" means losses, damages, liabilities, claims, judgments, costs, and expenses, including reasonable attorneys' fees.

10.2 Partnership Indemnification. The Partnership shall indemnify Partners for Losses incurred in proper conduct of business, provided good faith and authorized conduct.

10.3 Advance of Expenses. The Partnership may advance defense expenses, subject to repayment.

10.4 Limitation of Liability.
(a) No Partner liable except for fraud, willful misconduct, knowing violation of law, or uncured material breach.
(b) No indirect, incidental, consequential, special, or punitive damages.
(c) Aggregate liability: [☐ Unlimited ☐ $[________________________________]].

10.5 Exculpation. No Partner personally liable for good-faith errors of judgment.

10.6 Joint and Several Liability. Under the Act, each Partner is jointly and severally liable for all Partnership obligations (NMSA § 54-1A-306).

ARTICLE 11: TRANSFER OF INTERESTS; ADMISSION; WITHDRAWAL

11.1 Restrictions on Transfer. No Transfer without:
(a) Written consent of Partners holding at least [____]% of non-transferring Interests;
(b) Securities law compliance;
(c) Transferee joinder; and
(d) If the transferring Partner's Interest is Community Property, written consent of the Partner's spouse.

11.2 Right of First Refusal.
(a) Written notice with offer terms required.
(b) Thirty (30) days to elect.
(c) If not exercised, Transfer proceeds within sixty (60) days on no more favorable terms.

11.3 Permitted Transfers. Without consent: (a) revocable living trusts; (b) spouses, children, or lineal descendants; (c) Affiliates; provided joinder is executed and community property requirements are met.

11.4 Admission of New Partners. Unanimous consent and joinder (Schedule C) required.

11.5 Withdrawal.
(a) Ninety (90) days' written notice.
(b) Withdrawing Partner receives fair market value.
(c) Wrongful withdrawal may result in damages.

11.6 Community Property Transfer Considerations. If a Partner's Interest is Community Property, any Transfer (including by operation of law upon divorce) shall be subject to the provisions of this Article 11. In the event of a divorce, the non-Partner spouse's interest shall be limited to an economic interest (right to receive distributions) and shall not include management or voting rights unless approved by unanimous vote.

ARTICLE 12: DISSOCIATION; DISSOLUTION; WINDING UP

12.1 Dissociation Events. A Partner is dissociated upon:
(a) Written notice of withdrawal;
(b) An agreed-upon event;
(c) Expulsion by unanimous vote for cause;
(d) Judicial determination (NMSA § 54-1A-602);
(e) Bankruptcy;
(f) Death or entity dissolution; or
(g) Appointment of a guardian or general conservator (for an individual Partner).

12.2 Effect of Dissociation.
(a) Management rights terminate;
(b) Duties continue only for pre-dissociation matters; and
(c) The Partnership shall purchase the Interest per Section 12.6.

12.3 Dissolution Events (NMSA § 54-1A-801). The Partnership dissolves upon:
(a) Unanimous written agreement;
(b) In a partnership at will, the express will of at least half the Partners to wind up;
(c) An event making it unlawful to continue business;
(d) Judicial decree (NMSA § 54-1A-802);
(e) Application by a transferee (NMSA § 54-1A-803);
(f) Ninety (90) days with no Partners; or
(g) Any other dissolution event under the Act.

12.4 Notice of Dissolution.
(a) Written notice to Partners, creditors, and known claimants;
(b) File Statement of Dissolution with the New Mexico Secretary of State (if applicable); and
(c) Publish notice in a New Mexico newspaper of general circulation.

12.5 Winding Up (NMSA § 54-1A-804).
(a) The Partnership continues only for winding up.
(b) Non-wrongfully-dissociating Partners wind up.
(c) Collect receivables, liquidate assets, pay debts, distribute remaining assets per Section 12.7, and file all final tax returns (including final Form PTE).

12.6 Buyout of Dissociated Partner's Interest (NMSA § 54-1A-701). Buyout price:
(a) The distributable amount upon hypothetical liquidation as of the dissociation date; or
(b) Amount determined by independent appraiser.

Payment: within [____] days, or in [____] installments at [____]% interest.

12.7 Distribution Upon Dissolution.
(a) First, to creditors (including Partner-creditors);
(b) Second, to reserves for contingent liabilities;
(c) Third, to Partners per positive Capital Account balances; and
(d) Fourth, to Partners per Percentage Interests.

ARTICLE 13: DEFAULT AND REMEDIES

13.1 Events of Default. A "Default" occurs if a Partner (the "Defaulting Partner"):
(a) Materially breaches this Agreement without cure within thirty (30) days;
(b) Becomes Bankrupt;
(c) Has an unsatisfied judgment exceeding $[________________________________] for sixty (60) days;
(d) Is convicted of a felony or engages in fraud;
(e) Fails to make a Capital Contribution within thirty (30) days of demand;
(f) Breaches non-compete, confidentiality, or non-solicitation provisions; or
(g) Fails to provide required spousal consent or community property disclosures.

13.2 Remedies. Non-defaulting Partners may:
(a) Suspend management and voting rights;
(b) Reduce Percentage Interest;
(c) Purchase Interest at [____]% discount;
(d) Seek specific performance or injunctive relief;
(e) Expel by unanimous vote; or
(f) Pursue any other remedy at law or in equity.

13.3 Cumulative Remedies. All remedies are cumulative.

13.4 Attorneys' Fees. The prevailing party shall recover reasonable attorneys' fees and costs. New Mexico generally follows the American Rule but allows contractual fee-shifting.

ARTICLE 14: DISPUTE RESOLUTION

14.1 Negotiation. Good-faith negotiation within fifteen (15) Business Days.

14.2 Mediation. If unresolved, mediation by [☐ AAA ☐ JAMS ☐ other: [________________________________]] in [________________________________], New Mexico. Costs shared equally.

14.3 Binding Arbitration. If mediation fails within sixty (60) days, binding arbitration under AAA Commercial Arbitration Rules:
(a) Seat: [________________________________], New Mexico;
(b) Arbitrators: [☐ one (1) ☐ three (3)];
(c) Qualifications: ten (10) years' experience in commercial or partnership law;
(d) Written, reasoned award;
(e) Limited discovery; and
(f) Completion within one hundred eighty (180) days.

14.4 Injunctive Relief. Any Partner may seek injunctive relief in the District Court for [________________________________] County, New Mexico (New Mexico's trial courts of general jurisdiction are called "District Courts"), or the United States District Court for the District of New Mexico, without first exhausting mediation or arbitration.

14.5 Exclusive Jurisdiction. For non-arbitrable disputes, the Partners submit to the exclusive jurisdiction of the District Court for [________________________________] County, New Mexico, or the United States District Court for the District of New Mexico.

14.6 Jury Trial Waiver. TO THE FULLEST EXTENT PERMITTED BY NEW MEXICO LAW, EACH PARTNER WAIVES ANY RIGHT TO A TRIAL BY JURY.

14.7 Statute of Limitations. The statute of limitations for actions on written contracts in New Mexico is six (6) years (NMSA § 37-1-3).

14.8 Confidentiality. All dispute resolution proceedings shall be confidential.

ARTICLE 15: GENERAL PROVISIONS

15.1 Amendments. Only by written instrument executed by all Partners.

15.2 Waivers. No failure or delay operates as a waiver.

15.3 Entire Agreement. This Agreement supersedes all prior agreements.

15.4 Severability. Invalid provisions reformed; remaining provisions continue.

15.5 Governing Law. Governed by New Mexico law, including the Act, without regard to conflict of law principles.

15.6 Successors and Assigns. Binding on heirs, successors, and permitted assigns.

15.7 Notices. Written notices deemed given upon:
(a) Personal delivery;
(b) Overnight courier (one Business Day);
(c) Email with confirmed receipt; or
(d) Certified mail (three Business Days);

addressed per Schedule A.

15.8 Counterparts. Counterparts and electronic signatures are binding.

15.9 No Third-Party Beneficiaries. Except as provided, no third-party rights.

15.10 Headings. For convenience only.

15.11 Construction. "Including" means "including without limitation."

15.12 Further Assurances. Partners shall execute further documents as reasonably necessary.

15.13 Creditors. No creditor rights unless expressly provided.

15.14 Force Majeure. No liability for failure caused by events beyond reasonable control ("Force Majeure Event"), provided prompt notice and mitigation.

ARTICLE 16: NEW MEXICO-SPECIFIC PROVISIONS

16.1 Governing Statute. This Partnership is formed under the New Mexico Uniform Partnership Act (NMSA §§ 54-1A-101 to 54-1A-1206). New Mexico adopted a version of the Uniform Partnership Act based on the 1994/1996 NCCUSL model. The Act treats a partnership as a legal entity distinct from its partners (NMSA § 54-1A-201).

16.2 Community Property State Considerations.
(a) New Mexico is a community property state (NMSA § 40-3-1 et seq.). This has significant implications for partnership formation and operations.
(b) Characterization of Contributions. If a married Partner contributes funds or property acquired during the marriage, those contributions may be Community Property, and the resulting Partnership Interest may likewise be Community Property.
(c) Spousal Consent. Under NMSA § 40-3-13, either spouse has the right to manage and control Community Property, but certain transactions (such as gifts of Community Property or pledges of Community Property for the benefit of third parties) may require both spouses' consent. To avoid disputes, each married Partner contributing Community Property shall obtain spousal consent in the form attached as Schedule E.
(d) Separate Property. Contributions of Separate Property (property owned before marriage, or received by gift or inheritance during marriage) remain the contributing Partner's Separate Property, and the resulting Partnership Interest will be Separate Property, provided it is not commingled with Community Property.
(e) Divorce and Partnership Interests. In the event of a divorce, a Partner's Partnership Interest may be subject to division as Community Property. The non-Partner spouse's award shall be limited to an economic interest only. The non-Partner spouse shall not be admitted as a Partner or acquire management or voting rights without the unanimous consent of all other Partners.
(f) Death of a Partner. Upon the death of a married Partner, the decedent's Community Property interest in the Partnership may pass according to testamentary or intestate succession, subject to the surviving spouse's community property rights.

16.3 Statement of Partnership Authority (NMSA § 54-1A-303).
(a) The Partnership may file a Statement of Partnership Authority with the New Mexico Secretary of State, which may include:
(i) The name of the Partnership;
(ii) The street address of the chief executive office;
(iii) The names and mailing addresses of all partners or a designated agent;
(iv) The names of partners authorized to execute instruments transferring real property; and
(v) Any grant or limitation of authority.
(b) A filed Statement of Partnership Authority is automatically canceled by operation of law five (5) years after the date of filing, unless earlier canceled or renewed.
(c) A grant of authority to transfer real property held in the Partnership's name is conclusive in favor of a person who gives value without knowledge to the contrary.

16.4 New Mexico Secretary of State Filing Information.

New Mexico Secretary of State - Business Services Division
Address: 325 Don Gaspar, Suite 300, Santa Fe, NM 87501
Phone: (505) 827-3600
Website: https://www.sos.nm.gov

16.5 New Mexico Tax Obligations.

(a) Pass-Through Entity Return (Form PTE).

• The Partnership must file New Mexico Form PTE (Pass-Through Entity Income and Information Return) with the New Mexico Taxation and Revenue Department.
• The return is due on the fifteenth (15th) day of the third month following the close of the tax year (March 15 for calendar-year entities).
• The return reports the entity's net income allocated and apportioned to New Mexico.

(b) Entity-Level Tax Election (PTET).

• The Partnership may elect to pay income tax at the entity level at a rate of 5.9% on income apportioned to New Mexico.
• The election is made annually on the PTE return.
• Partners receive a corresponding credit on their individual returns.
• This election is advantageous for partners who itemize deductions, allowing them to deduct state taxes at the entity level (circumventing the $10,000 SALT cap).

(c) Nonresident Owner Withholding.

• The Partnership must withhold New Mexico income tax on each nonresident owner's allocable share of net income at a rate of 5.9%, unless the entity has elected and paid entity-level tax for that owner.
• Withholding is reported on the PTE return and remitted annually.

(d) New Mexico Personal Income Tax (Individual Partners).

• New Mexico resident partners are subject to state income tax at rates ranging from 1.7% to 5.9% (as of 2025).
• Nonresident partners are taxed on NM-source income.

(e) Gross Receipts Tax (NMSA § 7-9-1 et seq.).

• New Mexico imposes a gross receipts tax (in lieu of a traditional sales tax) on the total receipts from selling property or services in New Mexico.
• The state rate is 5.0% (as of 2025), with additional local option increments that vary by location (combined rates typically range from approximately 5.125% to 9.0%).
• The Partnership must register with the Taxation and Revenue Department and file gross receipts tax returns (Form CRS-1) monthly, quarterly, or semi-annually depending on volume.
• Some services and transactions are exempt or deductible.

(f) Compensating Tax.

• If the Partnership purchases tangible property outside New Mexico for use in New Mexico and does not pay an equivalent tax, it may owe compensating tax (NMSA § 7-9-7).

16.6 New Mexico Tax Filing Summary.

New Mexico Taxation and Revenue Department
Address: 1100 South St. Francis Drive, Santa Fe, NM 87505
Phone: (505) 827-0700
Website: https://www.tax.newmexico.gov

16.7 LLP Conversion Option.
(a) The Partners may, by unanimous vote, elect to register as an LLP under NMSA § 54-1A-1001.
(b) Requirements:
(i) File a Statement of Qualification with the Secretary of State;
(ii) Partnership name must contain "LLP," "L.L.P.," or "Registered Limited Liability Partnership";
(iii) File annual reports (NMSA § 54-1A-1003); and
(iv) Comply with any applicable insurance or financial responsibility requirements.
(c) An LLP provides that a partner is not personally liable for obligations arising from the negligence, wrongful acts, or misconduct of another partner or Partnership employee.

16.8 New Mexico Human Rights Act.
(a) The Partnership shall comply with the New Mexico Human Rights Act (NMSA § 28-1-1 et seq.), which prohibits discrimination in employment based on race, age, religion, color, national origin, ancestry, sex, physical or mental handicap, serious medical condition, sexual orientation, gender identity, and spousal affiliation.
(b) The Partnership shall maintain non-discrimination policies.

16.9 Workers' Compensation.
(a) If the Partnership has employees (three or more), it must carry workers' compensation insurance under the New Mexico Workers' Compensation Act (NMSA § 52-1-1 et seq.).
(b) The minimum number of employees triggering mandatory coverage is three (3).

16.10 New Mexico Specific Contract Provisions.
(a) Good Faith and Fair Dealing. New Mexico law implies a covenant of good faith and fair dealing in every contract, including this Agreement.
(b) Unconscionability. New Mexico courts may refuse to enforce unconscionable contract provisions under the Uniform Commercial Code (NMSA § 55-2-302) and common law principles.
(c) Choice of Law. New Mexico applies the Restatement (Second) of Conflict of Laws approach for choice-of-law questions. This Agreement's choice of New Mexico law is expected to be honored for internal affairs.

16.11 Dissolution Under New Mexico Law.
(a) Upon dissolution, the Partnership must follow NMSA § 54-1A-804 winding-up procedures.
(b) A Statement of Dissolution may be filed with the Secretary of State, which cancels any filed Statement of Partnership Authority.
(c) After filing a Statement of Dissolution, a person not a partner is deemed to have notice of the dissolution ninety (90) days after filing.
(d) All final PTE and CRS-1 (gross receipts tax) returns must be filed.

ARTICLE 17: EXECUTION AND SIGNATURE BLOCKS

IN WITNESS WHEREOF, the undersigned Partners have executed this General Partnership Agreement as of the Effective Date.

PARTNER SIGNATURES

Partner A:

Name: [________________________________]
Title (if entity): [________________________________]

Signature: _______________________________________________

Date: [__/__/____]

Address: [________________________________]
Email: [________________________________]
Phone: [________________________________]

Partner B:

Name: [________________________________]
Title (if entity): [________________________________]

Signature: _______________________________________________

Date: [__/__/____]

Address: [________________________________]
Email: [________________________________]
Phone: [________________________________]

Partner C: (if applicable)

Name: [________________________________]
Title (if entity): [________________________________]

Signature: _______________________________________________

Date: [__/__/____]

Address: [________________________________]
Email: [________________________________]
Phone: [________________________________]

NOTARY ACKNOWLEDGMENT

STATE OF NEW MEXICO
COUNTY OF [________________________________]

On this [____] day of [________________________________], [________], before me, the undersigned Notary Public, personally appeared:

[________________________________]

known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Notary Public Signature: _______________________________________________
Printed Name: [________________________________]
My Commission Expires: [__/__/____]

[NOTARY SEAL]

SCHEDULE A: PARTNERS; CAPITAL CONTRIBUTIONS; PERCENTAGE INTERESTS

SCHEDULE B: PARTNERSHIP PROPERTY

SCHEDULE C: FORM OF JOINDER AGREEMENT

JOINDER TO GENERAL PARTNERSHIP AGREEMENT

The undersigned acknowledges receipt and review of the General Partnership Agreement dated [__/__/____].

By executing this Joinder, the undersigned agrees to become a Partner and be bound by all terms.

Name: [________________________________]
Capital Contribution: $[________________________________]
Percentage Interest: [____]%
Effective Date: [__/__/____]
Community Property Status (if individual): ☐ Separate ☐ Community

Signature: _______________________________________________
Date: [__/__/____]
Address: [________________________________]

Spousal Consent (if Community Property):
Signature: _______________________________________________ Date: [__/__/____]
Name: [________________________________]

ACKNOWLEDGED BY EXISTING PARTNERS:

Signature: _______________________________________________ Date: [__/__/____]
Name: [________________________________]

Signature: _______________________________________________ Date: [__/__/____]
Name: [________________________________]

SCHEDULE D: MANAGING PARTNER AUTHORITY

The Managing Partner shall have authority to:

☐ Execute contracts up to $[________________________________]
☐ Hire and terminate employees and contractors
☐ Open and maintain bank accounts
☐ Execute leases not exceeding [____] years
☐ Purchase supplies, equipment, and inventory in the ordinary course
☐ Make routine tax filings (Form PTE, CRS-1)
☐ Register and maintain gross receipts tax account
☐ Other: [________________________________]

The Managing Partner shall NOT take any action listed in Section 5.3 without required consent.

SCHEDULE E: SPOUSAL CONSENT FORM

CONSENT OF SPOUSE TO GENERAL PARTNERSHIP AGREEMENT

I, [________________________________], am the spouse of [________________________________] ("Partner"), who is a partner in the partnership known as [________________________________] (the "Partnership").

I hereby acknowledge that I have read and understand the General Partnership Agreement dated [__/__/____] (the "Agreement").

I understand that under New Mexico's community property laws (NMSA § 40-3-1 et seq.), I may have a community property interest in the Partnership Interest held by my spouse.

I hereby consent to the terms and conditions of the Agreement, including but not limited to:

1. The contribution of community property to the Partnership as described in Schedule A;
2. The restrictions on transfer of Partnership Interests set forth in Article 11;
3. The provisions regarding dissociation, dissolution, and winding up in Article 12;
4. The buyout provisions that may apply to my spouse's Partnership Interest;
5. The limitations on my rights in the event of divorce, including that any interest I may receive shall be limited to an economic interest only (right to receive distributions) and shall not include management or voting rights; and
6. The governing law and dispute resolution provisions.

I agree that in the event of a divorce, legal separation, or other dissolution of my marriage to the Partner, I will be bound by the terms of the Agreement with respect to the Partnership Interest, including the right of first refusal and buyout provisions.

I acknowledge that I have had the opportunity to consult with my own independent legal counsel regarding this consent.

Spouse Name: [________________________________]
Spouse Signature: _______________________________________________
Date: [__/__/____]

NOTARY ACKNOWLEDGMENT

State of New Mexico, County of [________________________________]

On this [____] day of [________________________________], [________], before me personally appeared [________________________________], who is personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same voluntarily.

Notary Public: _______________________________________________
My Commission Expires: [__/__/____]

[NOTARY SEAL]

This template is provided for informational and educational purposes only and does not constitute legal advice. It is intended as a starting point and must be reviewed, customized, and approved by a qualified attorney licensed in the State of New Mexico before execution. New Mexico's community property laws create unique considerations for partnerships that require careful legal analysis. Laws change frequently; statutory citations should be verified at time of use. Neither the authors nor the publisher assume any liability for the use or misuse of this template. Do not execute this document without obtaining independent legal counsel.