New Mexico Dissolution

Limited Liability Company Dissolution - New Mexico

Electronic Version

Introductory Notes and Law Summary

A limited liability company is dissolved upon the happening of any of the following events:

1. An event specified in the articles of organization or the operating agreement;

2. Except as otherwise provided in the articles of organization or the operating agreement, upon the written consent of members having a majority share of the voting power of all members;

3. Except as otherwise provided in the articles of organization or the operating agreement, a majority in interest of the remaining members do not give their written consent to continue the business of the limited liability company within ninety days after the occurrence of an event of dissociation;

4. Entry of a decree of judicial dissolution pursuant to Section 53-19-40 NMSA 1978.

On the dissolution of the limited liability company, the limited liability company must cease to carry on its business and affairs, except as necessary for winding up the company's business and affairs. Its legal existence continues until all of the LLC’s business and affairs are wound up.

On application by or for a member, a court may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on its business in conformity with its articles of organization or operating agreement.

On the dissolution of a limited liability company, persons with authority to wind up its business and affairs shall sign and deliver articles of dissolution to the New Mexico Public Regulation Commission for filing.

Articles of dissolution must set out:

1. The name of the limited liability company;

2. The dates of filing the articles of organization and all amendments and restatements to the articles of organization;

3. The event causing the dissolution;

4. The effective date, which must be a date certain, of the articles of dissolution if the articles of dissolution are not to be effective on filing;

5. The name and address of each person who has the authority to act for the limited liability company in connection with the winding up of its business and affairs;

6. Whether the winding up of the business and affairs of the limited liability company is being supervised by a court; and

7. Any other information persons signing the articles of dissolution choose to include.

After the articles of dissolution have been filed, only a person named in the articles of dissolution as having authority to act for the limited liability company in connection with the winding up of its business and affairs shall have such authority, including the authority to bind the limited liability company, transact business on its behalf, act as its agent and execute any instrument for it and in its name.

Articles of dissolution may be amended at any time and from time to time or revoked at anytime and, unless an amendment or revocation states otherwise, the amendment or revocation is effective upon delivery to the office of the Commission for filing.

Except as may be provided in the articles of organization or the operating agreement, the business and affairs of the limited liability company must be wound up:

1. By one or more persons designated in writing by members holding a majority of the voting power of all members, or if no such persons are so designated, by the members or managers who have authority to manage the limited liability company; or

2. By a court at any time, on application of any member, his legal representative or his assignee, if any person with authority to act pursuant to Paragraph (1) of this subsection shall have engaged in wrongful conduct or on other cause shown.

The members, managers or other persons named in the articles of dissolution as having authority to wind up the business and affairs of the limited liability company may, in the name of, and for and on behalf of, the limited liability company:

1. Prosecute and defend suits;

2. Complete the performance of obligations undertaken prior to dissolution and settle and close the business of the limited liability company;

3. Dispose of and transfer the property of the limited liability company;

4. Discharge the liabilities of the limited liability company; and

5. Distribute to the members any remaining assets of the limited liability company.

On and after dissolution of a limited liability company and until articles of dissolution have been filed with the commission, any manager of a limited liability company whose articles of organization vest management in managers and any member of a limited liability company whose articles of organization do not vest management in managers can bind the LLC:

1. By any act authorized by §53-19-42 for winding up the limited liability company's business and affairs; and

2. By any transaction that would have bound the limited liability company if it had not been dissolved, if the other party to the transaction does not have notice of the dissolution.

The filing of the articles of dissolution is notice of dissolution for statutory purposes.

Any act of a member, manager or other person that is not otherwise binding on the limited liability company pursuant to statute is binding if it is otherwise authorized or ratified by the limited liability company.

Any act of any person that is in contravention of a restriction on authority does not bind the limited liability company to persons having knowledge of the restriction.

In winding up the business and affairs of a limited liability company, its assets must be applied or distributed, and its accounts settled, in the following order of priority:

1. To payment or adequate provision for payment to creditors, excluding members who by reason of the provisions of §53-19-28, NMSA, of the Limited Liability Company Act are creditors with respect to distributions by the limited liability company, but including, to the extent permitted by law, members who are creditors without application of the provisions of that section;

2. Except as otherwise provided in the articles of organization or the operating agreement, in satisfaction of liabilities:

• Under §53-19-28, NMSA, to members or former members for distributions; and

• To former members as a result of a dissociation requiring a payment under §53-19-24, NMSA or as a result of a voluntary withdrawal requiring payment under §53-19-37(c), NMSA; and

3. Except as otherwise provided in the articles of organization or the operating agreement, to members at the date of dissolution in the proportions, determined as of that date, of the values of their contributions to the capital of the limited liability company adjusted for withdrawals of capital.

A dissolved limited liability company may dispose of the known claims against it by filing articles of dissolution pursuant to statute. The dissolved limited liability company must notify its known claimants in writing of the dissolution at any time after the effective date of dissolution.

The written notice must:

1. Describe information that must be included in a claim;

2. Provide a mailing address where a claim may be sent;

3. State the deadline by which claims must be received by the limited liability company, which may not be earlier than the later of one hundred twenty days after the date on which the articles of dissolution were filed, or, if the dissolution was not effective on such filing date, one hundred twenty days after the effective date of dissolution stated in the articles of dissolution;

4. State that the claim shall be barred if not received by the deadline; and

5. State the effective date that will apply to any rejection notice that the limited liability company may give upon receipt of any claim.

A claim against the dissolved limited liability company is barred:

1. If a claimant who was given written notice pursuant to statute does not deliver the claim to the dissolved limited liability company by the deadline; or

2. If a claimant whose claim was rejected in writing by the dissolved limited liability company does not commence a proceeding to enforce the claim within ninety days from the effective date of the rejection notice.

A "claim" does not include a contingent liability or a claim based on an event occurring after the effective date of dissolution.

A dissolved limited liability company may publish notice of its dissolution and request that persons with claims against the limited liability company present them in accordance with the notice.

Steps to Dissolve a New Mexico LLC

Step 1: See Form 1 - Resolution of Members Consenting to Dissolution

Step 2: See Form 2 - Articles of Dissolution

Follow the instructions on the form.

A cover letter to send is provided for your convenience.

See Form A - Transmittal Letter

Step 3: Complete the winding up process as set out above in the Introductory Notes.

See Form 3 - Notice to Claimants

See Form 4 - Notice for Publication

See Form 5 - Notice of Rejection of Claim

Form A - Transmittal Letter

Date:

New Mexico Public Regulation Commission

P.O. Box 1269

Santa Fe, New Mexico 87504

Re:

Dear Sir:

Enclosed you will find Articles of Dissolution for and the filing fee of .

Please file and provide a “filed” copy to me.

Please contact me at the above address if you require anything further.

With kindest regards, I am

Sincerely yours,

Enclosures

Check # Enclosed for $

Form 1 - Resolution of Members Consenting to Dissolution

Resolution of Members of

A New Mexico Limited Liability Company

The undersigned, being all the members of , a New Mexico limited liability company, hereby resolve to dissolve and consent to the dissolution of the limited liability company.

Dated this the day of , .

Form 3 - Notice to Claimants

Notice to Claimant

You are hereby notified that on the day of , , , a New Mexico limited liability company, filed Articles of Dissolution with the New Mexico Public Regulation Commission.

If you have a claim, describe that claim in detail:

Your claim must be received by (this can be no less than 120 days from the date of this notice).

Claims must be sent to:

Your claim will be barred if written notice of your claim is not received by the deadline.

Name of Limited Liability Company:

By:

Title: Date:

Form 4 - Notice for Publication

Notice to Claimants

You are hereby notified that on the day of , , , a New Mexico limited liability company, filed Articles of Dissolution with the New Mexico Public Regulation Commission.

If you have a claim against the LLC, describe the claim in detail and mail it to the address listed below.

Claims must be sent to:

Your claim will be barred unless a proceeding to enforce the claim is commenced within 3 years after the publication of this notice.

Name of Limited Liability Company:

By:

Title: Date:

Form 5 - Notice of Rejection of Claim

Notice of Rejection of Claim

You are hereby notified that on the day of , , , a New Mexico limited liability company, rejected all or part of the claim you submitted to the company.

ALL OF YOUR CLAIM WAS REJECTED.

A PORTION OF YOUR CLAIM WAS REJECTED. The part of your claim that was rejected is:

Name of Limited Liability Company:

By:

Title: Date: