Single-Member LLC Operating Agreement — New Mexico

Single-Member LLC Operating Agreement (NEW MEXICO)

Quick-Reference Summary

Article I — Formation

1.1 Formation. This Operating Agreement (the "Agreement") of [________________________________], LLC (the "Company"), a New Mexico limited liability company, is adopted and entered into effective as of [__/__/____] (the "Effective Date") by [________________________________] (the "Member" or "Sole Member"). The Company was formed by filing Articles of Organization with the New Mexico Secretary of State pursuant to the New Mexico Limited Liability Company Act, NMSA 1978, Chapter 53, Article 19 (the "Act").

1.2 Name. The legal name of the Company is [________________________________], LLC. The Company may also conduct business under one or more registered trade names that comply with NMSA 1978 § 53-19-3.

1.3 Principal Office. The principal place of business of the Company is [________________________________].

1.4 Registered Office and Agent. The Company's registered office in New Mexico is [________________________________], and its registered agent is [________________________________], who maintains a physical New Mexico street address as required by NMSA 1978 § 53-19-5.

1.5 Term. The Company shall have perpetual existence unless dissolved earlier in accordance with this Agreement or the Act.

1.6 Statutory Override. To the maximum extent permitted by NMSA 1978 § 53-19-2(O) and the Act, where this Agreement conflicts with a default rule of the Act that may be varied by agreement, this Agreement shall control.

Article II — Purpose and Powers

2.1 Purpose. The Company is formed to engage in any lawful business, trade, investment, or activity for which a limited liability company may be organized under NMSA 1978 § 53-19-6, and in particular: [________________________________].

2.2 Powers. The Company has all powers granted to a New Mexico limited liability company under the Act, including the power to enter into contracts, acquire and dispose of real and personal property, borrow money, sue and be sued, and conduct business in this and other jurisdictions.

Article III — Member (Sole Member)

3.1 Identification of Sole Member.

3.2 Limited Liability. Pursuant to NMSA 1978 § 53-19-13, the Member is not personally liable for any debt, obligation, or liability of the Company solely by reason of being a member or acting as a manager.

3.3 No Salary as Member. The Member is not entitled to compensation for services rendered solely in the capacity of a member, but may receive reasonable compensation for services rendered as a manager, officer, or employee pursuant to a separate written arrangement.

3.4 Admission of Additional Members. No additional member may be admitted except upon (i) written consent of the Sole Member and amendment of this Agreement, and (ii) compliance with NMSA 1978 § 53-19-36 and applicable federal and state securities laws. Upon admission of an additional member, this Agreement shall be amended or replaced with a multi-member operating agreement.

Article IV — Management

4.1 Management Structure. The Company is ☐ member-managed ☐ manager-managed (check one). If member-managed, the Sole Member shall have full and exclusive authority to manage the business and affairs of the Company under NMSA 1978 § 53-19-15. If manager-managed, the initial Manager is [________________________________].

4.2 Authority. The Member (or Manager) is authorized to:

• ☐ Execute contracts, leases, deeds, promissory notes, and other instruments on behalf of the Company;
• ☐ Open, maintain, and close Company bank, brokerage, and merchant accounts;
• ☐ Hire, supervise, and terminate employees and independent contractors;
• ☐ File tax returns and make tax elections (including check-the-box elections under Treas. Reg. § 301.7701-3);
• ☐ Acquire, hold, lease, pledge, and dispose of Company property;
• ☐ Initiate, defend, settle, and compromise legal proceedings;
• ☐ Borrow funds and grant security interests in Company property.

4.3 Standard of Conduct. The Member or Manager shall discharge duties consistent with the obligations imposed by NMSA 1978 § 53-19-16 and the implied covenant of good faith and fair dealing.

4.4 Officers (Optional). The Member may appoint officers (e.g., President, Treasurer, Secretary) and delegate authority in writing. Officers serve at the pleasure of the Member.

Article V — Capital Accounts and Distributions

5.1 Initial Capital Contribution. The Member has contributed cash, property, or services as described in Exhibit A with an agreed aggregate value of $[____________].

5.2 Additional Capital Contributions. The Member may make additional capital contributions at any time. No additional contributions are required.

5.3 Capital Account. A single capital account shall be maintained for the Member in accordance with Treas. Reg. § 1.704-1(b)(2)(iv) where applicable.

5.4 Distributions. The Member may cause the Company to distribute available cash and property to the Member at such times and in such amounts as the Member determines, subject to the solvency limitations under the Act and NMSA 1978 § 53-19-26 (prohibiting wrongful distributions that would render the Company insolvent).

5.5 Tax Allocations. As a single-member LLC, the Company is by default a "disregarded entity" for federal income tax purposes under Treas. Reg. § 301.7701-3, and the Member reports all Company income, gain, loss, deduction, and credit on the Member's individual federal return unless the Company elects otherwise.

5.6 Tax Distributions (Optional). The Member may cause the Company to make tax distributions sufficient to cover the Member's estimated federal, state, and local tax liability attributable to Company income.

Article VI — Transfer of Interest / Charging Order (NMSA § 53-19-32, § 53-19-33, § 53-19-35)

6.1 Restrictions on Transfer. Except as expressly permitted by this Agreement, the Member shall not sell, assign, pledge, hypothecate, or otherwise transfer all or any part of the Member's interest in the Company without (i) prior written acknowledgment of the transfer's effect, and (ii) compliance with applicable securities laws.

6.2 Permitted Transfers. The Member may transfer the Member's interest to (a) the Member's revocable living trust; (b) a wholly-owned entity controlled by the Member; or (c) by testamentary disposition or intestate succession upon the Member's death.

6.3 Charging Order — Exclusive Remedy. Pursuant to NMSA 1978 § 53-19-35, the exclusive remedy of a judgment creditor of the Member with respect to the Member's limited liability company interest is a charging order. To the extent so charged, the judgment creditor has no more rights than those to which an assignee of the Member's interest would be entitled under NMSA 1978 § 53-19-32. The judgment creditor does not become a member, does not acquire management rights, and is entitled only to distributions, if and when made, until the judgment is satisfied. New Mexico law does not deprive the Member of the benefit of any applicable exemption laws.

6.4 No Forced Dissolution. Pursuant to NMSA 1978 § 53-19-32, the assignment of a membership interest does not by itself dissolve the Company, and a judgment creditor's charging order is not grounds for judicial dissolution.

6.5 Right of First Negotiation (Future Multi-Member Scenarios). If additional members are admitted, no member may transfer an interest to a non-affiliate without first offering the interest to the Company and then to the other members at the same price and terms.

Article VII — Dissolution

7.1 Events of Dissolution. The Company shall dissolve upon the first to occur of:

• ☐ Written election of the Sole Member to dissolve;
• ☐ Entry of a decree of judicial dissolution under NMSA 1978 § 53-19-40;
• ☐ Any event that makes it unlawful for the Company to continue its business;
• ☐ Any other event of dissolution specified in this Agreement or required by the Act.

7.2 Winding Up. Upon dissolution, the Member (or a person designated by the Member) shall wind up the Company's affairs pursuant to NMSA 1978 § 53-19-42, including: (a) collecting receivables; (b) paying or providing for known and contingent liabilities; (c) distributing remaining assets to the Member; and (d) filing Articles of Dissolution under NMSA 1978 § 53-19-41.

7.3 Distribution Priorities. Pursuant to NMSA 1978 § 53-19-44, Company assets shall be distributed in the following order: (i) to creditors, including the Member if a creditor; (ii) to satisfy distributions previously declared; (iii) to the Member for return of capital and remaining profits.

7.4 Continuation Despite Death or Incapacity. Upon the Member's death or incapacity, the Member's personal representative, trustee, or successor-in-interest may continue the Company's business and shall succeed to the Member's economic and management rights, subject to applicable law.

Article VIII — State-Specific Provisions

8.1 Annual/Biennial Report. The Act does not impose an annual or biennial report requirement on New Mexico LLCs. The Company shall, however, keep current its registered agent and registered office on file with the NM Secretary of State.

8.2 Franchise Tax. If the Company elects to be taxed as a corporation for federal income tax purposes, it shall be subject to the $50 annual New Mexico Corporate Franchise Tax filed with Form CIT-1 under N.M. Tax & Rev. rules. A single-member LLC treated as a disregarded entity is generally not subject to the LLC-level franchise tax; the Member shall obtain current guidance from the New Mexico Taxation & Revenue Department.

8.3 Pass-Through Entity Withholding. If the Company has nonresident members or makes payments subject to N.M. PTE withholding, it shall comply with NMSA 1978 § 7-3A-1 et seq. (PTE withholding) and NMSA 1978 § 7-3-14 (composite filings).

8.4 Gross Receipts Tax (GRT). If the Company sells goods, leases property, or provides services subject to New Mexico Gross Receipts Tax under NMSA 1978 Ch. 7, Art. 9, it shall register for a CRS/NTTC tax identification number with N.M. Tax & Rev. and report and remit GRT.

8.5 Privacy. The Member's name and address are not required to be disclosed in the Articles of Organization filed with the NM Secretary of State. The Company shall, however, comply with all federal beneficial ownership reporting obligations (e.g., the federal Corporate Transparency Act, 31 U.S.C. § 5336, to the extent currently enforced).

8.6 Series LLC — Not Authorized. New Mexico has not enacted series LLC legislation. The Company shall not purport to establish protected or registered series under this Agreement. Asset segregation must be accomplished through separate New Mexico LLCs or parent-subsidiary structures.

8.7 Foreign Qualification. If the Company transacts business in another state, it shall qualify as a foreign LLC in such state.

Article IX — General Provisions

9.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Mexico, without regard to its conflict-of-laws principles.

9.2 Venue. Any dispute arising under this Agreement shall be resolved in the state or federal courts located in [____________] County, New Mexico.

9.3 Amendment. This Agreement may be amended only by a written instrument signed by the Sole Member (or all members then admitted).

9.4 Entire Agreement. This Agreement, together with the Articles of Organization and all exhibits, constitutes the entire agreement governing the Company.

9.5 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall continue in full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to render it enforceable.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts and by electronic signature (E-SIGN Act, 15 U.S.C. § 7001 et seq.; New Mexico Uniform Electronic Transactions Act, NMSA 1978 § 14-16-1 et seq.).

9.7 No Third-Party Beneficiaries. This Agreement is for the benefit of the Member and the Company only.

9.8 Notices. Notices shall be in writing and delivered to the address set forth above or such other address as the Member may designate.

Signature Block

IN WITNESS WHEREOF, the undersigned Sole Member executes this Operating Agreement effective as of the date first written above.

Printed name: [________________________________]
Title (if any): [________________________________]

State of New Mexico
County of [____________]

Acknowledged before me this [__/__/____] by [________________________________].

_________________________________
Notary Public
My commission expires: [__/__/____]

Pre-Execution Checklist

• ☐ Articles of Organization filed with the NM Secretary of State and entity confirmed "active" on enterprise.sos.nm.gov.
• ☐ Registered agent and physical NM street address confirmed and current.
• ☐ Federal EIN obtained from the IRS (Form SS-4) — required even for single-member disregarded entities that have employees, file excise tax, or open a bank account.
• ☐ Check-the-box federal tax election filed (Form 8832) if treatment other than disregarded entity is desired.
• ☐ NM CRS/Gross Receipts tax identification number obtained if the Company has taxable activity.
• ☐ Initial capital contribution documented in Exhibit A.
• ☐ Business bank account opened in the Company's name (do not commingle).
• ☐ NM Corporate Franchise Tax obligation evaluated (Form CIT-1 if taxed as corporation).
• ☐ Beneficial ownership information considered under 31 U.S.C. § 5336 (Corporate Transparency Act) and any superseding rule.
• ☐ Industry-specific licensing reviewed with NM Regulation & Licensing Department.
• ☐ Foreign qualification evaluated in other states where the Company transacts business.
• ☐ Original signed Agreement maintained in Company records book.
• ☐ Sole Member's estate plan / trust updated to reference the membership interest (Article VI).

Sources and References

• New Mexico Limited Liability Company Act, NMSA 1978 Ch. 53, Art. 19: https://law.justia.com/codes/new-mexico/chapter-53/article-19/
• NMSA 1978 § 53-19-2 (Definitions): https://law.justia.com/codes/new-mexico/chapter-53/article-19/section-53-19-2/
• NMSA 1978 § 53-19-35 (Rights of judgment creditor — charging order): https://chargingorder.com/index.php?n=Site.StateNewMexico
• NMSA 1978 § 53-19-38 (Events of dissociation): https://codes.findlaw.com/nm/chapter-53-corporations/nm-st-sect-53-19-38/
• New Mexico Secretary of State, Business Services: https://www.sos.nm.gov/business-services/
• New Mexico Taxation & Revenue, Pass-Through Entity: https://www.tax.newmexico.gov/businesses/corporate-income-franchise-tax-overview/pass-through-entity/
• Treas. Reg. § 301.7701-3 (Check-the-box): https://www.ecfr.gov/current/title-26/section-301.7701-3
• Corporate Transparency Act, 31 U.S.C. § 5336: https://www.law.cornell.edu/uscode/text/31/5336