HOUSE BILL 228
52nd legislature - STATE OF NEW MEXICO - first session, 2015
INTRODUCED BY
Zachary J. Cook and Daniel A. Ivey-Soto
FOR THE COURTS, CORRECTIONS AND JUSTICE COMMITTEE
AN ACT
RELATING TO BUSINESS; REPEALING THE LIMITED LIABILITY COMPANY ACT; ENACTING THE REVISED UNIFORM LIMITED LIABILITY COMPANY ACT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
ARTICLE 1
GENERAL PROVISIONS
SECTION 101. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Revised Uniform Limited Liability Company Act".
SECTION 102. [NEW MATERIAL] DEFINITIONS.--As used in the Revised Uniform Limited Liability Company Act:
A. "certificate of organization" means the certificate required by Section 201 of the Revised Uniform Limited Liability Company Act and includes the certificate as amended or restated;
B. "contribution", except when used in the phrase "right of contribution", means property or a benefit described in Section 402 of the Revised Uniform Limited Liability Company Act that is provided by a person to a limited liability company to become a member or in the person's capacity as a member;
C. "debtor in bankruptcy" means a person that is the subject of:
(1) an order for relief pursuant to Title 11 of the United States Code or a comparable order pursuant to a successor statute of general application; or
(2) a comparable order pursuant to federal, state or foreign law governing insolvency;
D. "distribution":
(1) means a transfer of money or other property from a limited liability company to a person on account of a transferable interest or in the person's capacity as a member; and
(2) includes:
(a) a redemption or other purchase by a limited liability company of a transferable interest; and
(b) a transfer to a member in return for the member's relinquishment of a right to participate as a member in the management or conduct of the company's activities and affairs or to have access to records or other information concerning the company's activities and affairs; but
(3) does not include:
(a) reasonable compensation for present or past services; or
(b) payments made in the ordinary course of business under a bona fide retirement plan or other bona fide benefits program;
E. "foreign limited liability company" means an unincorporated entity formed pursuant to the law of a jurisdiction other than New Mexico and that would be a limited liability company if formed pursuant to the laws of New Mexico;
F. "jurisdiction", when used to refer to a political entity, means the United States, a state, a foreign country or a political subdivision of a foreign country;
G. "jurisdiction of formation" means the jurisdiction whose law governs the internal affairs of an entity;
H. "limited liability company", except when used in the phrase "foreign limited liability company" or when used in Article 10 of the Revised Uniform Limited Liability Company Act, means an entity formed pursuant to the provisions of that act or an entity that becomes subject to that act pursuant to the provisions of Article 10 or Section 110 of that act;
I. "manager" means a person that, pursuant to the operating agreement of a manager-managed limited liability company, is responsible, alone or in concert with others, for performing the management functions stated in Subsection C of Section 407 of the Revised Uniform Limited Liability Company Act;
J. "manager-managed limited liability company" means a limited liability company that qualifies pursuant to the provisions of Subsection A of Section 407 of the Revised Uniform Limited Liability Company Act;
K. "member" means a person that has become a member of a limited liability company pursuant to the provisions of Section 401 of the Revised Uniform Limited Liability Company Act and that has not dissociated pursuant to the provisions of Section 602 of that act;
L. "member-managed limited liability company" means a limited liability company that is not a manager-managed limited liability company;
M. "operating agreement" means the agreement, regardless of whether it is referred to as an operating agreement, and regardless of whether it is oral, in a record, implied or in any combination thereof, of all of the members of a limited liability company, including a sole member, concerning the matters described in Subsection A of Section 110 of the Revised Uniform Limited Liability Company Act and includes the agreement as amended or restated;
N. "organizer" means a person that acts pursuant to the provisions of Section 201 of the Revised Uniform Limited Liability Company Act to form a limited liability company and who need not be nor become a member or manager of the company formed;
O. "person" means an individual, a business corporation, a nonprofit corporation, a partnership, a limited partnership, a limited liability company, a general cooperative association, an unincorporated nonprofit association, a statutory trust, a business trust, a common-law business trust, an estate, a trust, an association, a joint venture, a public corporation, a government, a governmental subdivision, an agency, an instrumentality or any other legal or commercial entity;
P. "principal office" means the principal executive office of a limited liability company or foreign limited liability company, regardless of whether the office is located in New Mexico;
Q. "property" means all property, whether real, personal, mixed, tangible, intangible or any right or interest therein;
R. "record", when used as a noun, means information that is inscribed on a tangible medium or that is stored in an electronic or another medium and is retrievable in a perceivable form;
S. "registered agent" means an agent of a limited liability company or foreign limited liability company that is authorized to receive service of any process, notice or demand required or permitted by law to be served on the company;
T. "registered foreign limited liability company" means a foreign limited liability company that is registered to do business in New Mexico pursuant to a statement of registration filed by the secretary of state;
U. "sign" means, with the present intent to authenticate or adopt a record, to:
(1) execute or adopt a tangible symbol; or
(2) attach to or logically associate with the record an electronic symbol, sound or process;
V. "state" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands or a territory or insular possession subject to the jurisdiction of the United States;
W. "transfer" includes an assignment, a conveyance, a sale, a lease, an encumbrance, including a mortgage and a security interest, a gift and a transfer by operation of law;
X. "transferable interest" means the right, as initially owned by a person in the person's capacity as a member, to receive distributions from a limited liability company, regardless of whether the person remains a member or continues to own any part of the right, and applies to any fraction of the interest, regardless of who owns it; and
Y. "transferee" means a person to which all or part of a transferable interest has been transferred, regardless of whether the transferor is a member, and includes a person that owns a transferable interest pursuant to the provisions of Paragraph (3) of Subsection A of Section 603 of the Revised Uniform Limited Liability Company Act.
SECTION 103. [NEW MATERIAL] KNOWLEDGE--NOTICE.--
A. A person knows a fact when the person:
(1) has actual knowledge of it; or
(2) is deemed to know it pursuant to the provisions of Paragraph (1) of Subsection D of this section or a law other than one in the Revised Uniform Limited Liability Company Act.
B. A person has notice of a fact when the person:
(1) has reason to know the fact from all of the facts known to the person at the time in question; or
(2) is deemed to have notice of the fact pursuant to the provisions of Paragraph (2) of Subsection D of this section.
C. Subject to the provisions of Subsection F of Section 210 of the Revised Uniform Limited Liability Company Act, a person notifies another person of a fact by taking steps reasonably required to inform the other person in ordinary course, regardless of whether those steps cause the other person to know the fact.
D. A person that is not a member is deemed:
(1) to know of a limitation on authority to transfer real property as provided in Subsection G of Section 302 of the Revised Uniform Limited Liability Company Act; and
(2) to have notice of a limited liability company's:
(a) dissolution ninety days after a statement of dissolution pursuant to the provisions of Subparagraph (a) of Paragraph (2) of Subsection B of Section 702 of that act becomes effective;
(b) termination ninety days after a statement of termination pursuant to the provisions of Subparagraph (f) of Paragraph (2) of Subsection B of Section 702 of that act becomes effective; and
(c) participation in a merger, an interest exchange, a conversion or a domestication, ninety days after articles of merger, interest, exchange, conversion or domestication pursuant to the provisions of Article 10 of that act become effective.
SECTION 104. [NEW MATERIAL] GOVERNING LAW.--The laws of New Mexico govern:
A. the internal affairs of a limited liability company; and
B. the liability of a member as member and a manager as manager for a debt, an obligation or another liability of a limited liability company.
SECTION 105. [NEW MATERIAL] OPERATING AGREEMENT--SCOPE, FUNCTION AND LIMITATIONS.--
A. Except as otherwise provided in Subsections C and D of this section, the operating agreement governs:
(1) relations among the members as members and between the members and the limited liability company;
(2) the rights and duties pursuant to the provisions of the Revised Uniform Limited Liability Company Act of a person in the capacity of manager;
(3) the activities and affairs of the company and the conduct of those activities and affairs; and
(4) the means and conditions for amending the operating agreement.
B. To the extent that the operating agreement does not provide for a matter described in Subsection A of this section, the Revised Uniform Limited Liability Company Act governs the matter.
C. An operating agreement shall not:
(1) vary the law applicable pursuant to the provisions of Section 104 of the Revised Uniform Limited Liability Company Act;
(2) vary a limited liability company's capacity pursuant to the provisions of Section 109 of that act to sue and be sued in its own name;
(3) vary any requirement, procedure or other provision of that act pertaining to:
(a) registered agents; or
(b) the secretary of state, including provisions pertaining to records authorized or required to be delivered to the secretary of state for filing pursuant to the provisions of that act;
(4) vary the provisions of Section 204 of that act;
(5) alter or eliminate the duty of loyalty or the duty of care, except as otherwise provided in Subsection D of this section;
(6) eliminate the contractual obligation of good faith and fair dealing pursuant to the provisions of Subsection D of Section 409 of that act, except that the operating agreement may prescribe the standards, if not manifestly unreasonable, by which the performance of the obligation is to be measured;
(7) relieve or exonerate a person from liability for conduct involving bad faith, willful or intentional misconduct or a knowing violation of law;
(8) unreasonably restrict the duties and rights provided for in Section 410 of that act, except that the operating agreement may impose reasonable restrictions on the availability and use of information obtained pursuant to that section and may define appropriate remedies, including liquidated damages, for a breach of a reasonable restriction on use;
(9) vary the causes of dissolution specified in Paragraph (4) of Subsection A of Section 701 of that act;
(10) vary the requirement to wind up the company's activities and affairs as specified in Subsections A and E and Paragraph (1) of Subsection B of Section 702 of that act;
(11) unreasonably restrict the right of a member to maintain an action pursuant to the provisions of Article 8 of that act;
(12) vary the provisions of Section 805 of that act, except that the operating agreement may provide that the company shall not have a special litigation committee;
(13) vary the right of a member to approve a merger pursuant to the provisions of Paragraph (2) of Subsection A of Section 1009 of that act, an interest exchange pursuant to the provisions of Paragraph (2) of Subsection A of Section 1015 of that act, a conversion pursuant to the provisions of Paragraph (2) of Subsection A of Section 1021 of that act or a domestication pursuant to the provisions of Paragraph (2) of Subsection A of Section 1027 of that act;
(14) vary the required contents of a plan of merger pursuant to the provisions of Subsection A of Section 1008 of that act, a plan of interest exchange pursuant to the provisions of Subsection A of Section 1014 of that act, a plan of conversion pursuant to the provisions of Subsection A of Section 1020 of that act or a plan of domestication pursuant to the provisions of Subsection A of Section 1012 of that act; and
(15) except as otherwise provided in Section 106 and Subsection B of Section 107 of that act, restrict the rights provided by that act of a person other than a member or manager.
D. Subject to the provisions of Paragraph (7) of Subsection C of this section, and without limiting other terms that may be included in an operating agreement, the operating agreement may:
(1) specify the method by which a specific act or transaction that would otherwise violate the duty of loyalty may, after full disclosure of all material facts, be authorized or ratified by one or more disinterested and independent persons;
(2) alter the prohibition specified in Paragraph (2) of Subsection A of Section 405 of the Revised Uniform Limited Liability Company Act so that the prohibition requires only that the company's total assets not be less than the sum of its total liabilities;
(3) to the extent that the operating agreement of a member-managed limited liability company expressly relieves a member of a responsibility that the member otherwise would have pursuant to the provisions of that act and imposes that responsibility on one or more other members, eliminate or limit a fiduciary duty of the member relieved of the responsibility that would have pertained to the responsibility; and
(4) if not manifestly unreasonable:
(a) alter or eliminate the aspects of the duty of loyalty stated in Subsections B and I of Section 409 of that act;
(b) identify specific types or categories of activities that do not violate the duty of loyalty;
(c) alter the duty of care; however, the operating agreement shall not authorize conduct involving bad faith, willful or intentional misconduct or a knowing violation of law; and
(d) alter or eliminate any other fiduciary duty.
E. A court shall decide as a matter of law whether a term of an operating agreement is manifestly unreasonable pursuant to Paragraph (6) of Subsection C or Paragraph (3) of Subsection D of this section. The court:
(1) shall make its determination as of the time the challenged term became part of the operating agreement and by considering only circumstances existing at that time; and
(2) may invalidate the term only if, in light of the purposes, activities and affairs of the limited liability company, it is readily apparent that:
(a) the objective of the term is unreasonable; or
(b) the term is an unreasonable means to achieve the term's objective.
SECTION 106. [NEW MATERIAL] OPERATING AGREEMENT--EFFECT ON LIMITED LIABILITY COMPANY AND PERSON BECOMING MEMBER--PRE-FORMATION AGREEMENT.--
A. A limited liability company is bound by and may enforce the operating agreement, regardless of whether the company has itself manifested assent to the operating agreement.
B. A person that becomes a member of a limited liability company is deemed to assent to the operating agreement.
C. Two or more persons intending to become the initial members of a limited liability company may make an agreement providing that, upon the formation of the company, the agreement will become the operating agreement. One person intending to become the initial member of a limited liability company may assent to terms providing that, upon the formation of the company, the terms will become the operating agreement.
SECTION 107. [NEW MATERIAL] OPERATING AGREEMENT--EFFECT ON THIRD PARTIES AND RELATIONSHIP TO RECORDS EFFECTIVE ON BEHALF OF LIMITED LIABILITY COMPANY.--
A. An operating agreement may specify that its amendment requires the approval of a person that is not a party to the agreement or the satisfaction of a condition. An amendment is ineffective if its adoption does not include the required approval or satisfy the specified condition.
B. The obligations of a limited liability company and its members to a person in the person's capacity as a transferee or a person dissociated as a member are governed by the operating agreement. Subject only to any court order issued pursuant to the provisions of Paragraph (2) of Subsection B of Section 503 of the Revised Uniform Limited Liability Company Act to effectuate a charging order, an amendment to the operating agreement made after a person becomes a transferee or is dissociated as a member:
(1) is effective with regard to any debt, obligation or other liability of the limited liability company or its members to the person in the person's capacity as a transferee or person dissociated as a member; and
(2) is not effective to the extent that the amendment imposes a new debt, obligation or other liability on the transferee or person dissociated as a member.
C. If a record that has been delivered by a limited liability company to the secretary of state for filing becomes effective and contains a provision that would be ineffective pursuant to the provisions of Subsection C or Paragraph (3) of Subsection D of Section 105 of the Revised Uniform Limited Liability Company Act if contained in the operating agreement, the provision is ineffective in the record.
D. Subject to the provisions of Subsection C of this section, if a record delivered by a limited liability company to the secretary of state for filing becomes effective and conflicts with a provision of the operating agreement:
(1) the agreement prevails as to members, persons dissociated as members, transferees and managers; and
(2) the record prevails as to other persons to the extent that they reasonably rely on the record.
SECTION 108. [NEW MATERIAL] NATURE, PURPOSE AND DURATION OF LIMITED LIABILITY COMPANY.--
A. A limited liability company is an entity distinct from its member or members.
B. A limited liability company may have any lawful purpose, regardless of whether it is for profit.
C. A limited liability company has perpetual duration.
SECTION 109. [NEW MATERIAL] POWERS.--A limited liability company has the capacity to sue and be sued in its own name and the power to do all things necessary or convenient to carry on its activities and affairs.
SECTION 110. [NEW MATERIAL] APPLICATION TO EXISTING RELATIONSHIPS.--
A. The Revised Uniform Limited Liability Company Act governs only:
(1) a limited liability company formed on or after July 1, 2016; and
(2) except as otherwise provided in this section, a limited liability company formed before July 1, 2016 that:
(a) elects, in the manner provided in its operating agreement or by law for amending the operating agreement, to be subject to that act; and
(b) presents to the secretary of state for filing an amended and restated certificate of organization stating that it desires to be subject to that act.
B. For purposes of applying the Revised Uniform Limited Liability Company Act to a limited liability company formed before July 1, 2016 and that follows the provisions in Subparagraphs (a) and (b) of Paragraph (2) of Subsection A of this section, except as otherwise agreed:
(1) the company's articles of organization are deemed to be the company's certificate of organization; and
(2) for purposes of applying the definition in Subsection J of Section 102 of that act and subject to the provisions of Subsection D of Section 107 of that act, language in the company's articles of organization designating the company's management structure operates as if that language were in the operating agreement.
C. Except as otherwise provided in Subsection E of this section, until a limited liability company formed before July 1, 2016 elects to be governed by the Revised Uniform Limited Liability Company Act, the company shall continue to be governed by the provisions of the Limited Liability Company Act as if that act had not been repealed, except that the company shall not be renewed unless so provided in the original agreement or in the manner provided in its limited liability company agreement or by law for amending a limited liability company agreement.
D. After July 1, 2016, the Revised Uniform Limited Liability Company Act governs a foreign limited liability company formed at any time.
E. Sections 117, 212, 702 and 704 through 710 of the Revised Uniform Limited Liability Company Act apply to limited liability companies formed before July 1, 2016.
SECTION 111. [NEW MATERIAL] SUPPLEMENTAL PRINCIPLES OF LAW.--Unless displaced by particular provisions of the Revised Uniform Limited Liability Company Act, the principles of law and equity supplement that act.
SECTION 112. [NEW MATERIAL] NAMES PERMITTED.--
A. The name of a limited liability company shall contain the phrase "limited liability company" or "limited company" or the abbreviation "L.L.C.", "LLC", "L.C." or "LC". "Limited" may be abbreviated as "Ltd.", and "company" may be abbreviated as "Co.".
B. Except as otherwise provided in Subsection D of this section, the name of a limited liability company, and the name under which a foreign limited liability company may register to do business in New Mexico, shall be distinguishable on the records of the secretary of state from the name:
(1) of an existing person whose formation required the filing of a record by the secretary of state and that is not at the time administratively dissolved;
(2) of a limited liability partnership whose statement of qualification is in effect;
(3) under which a person is registered to do business in New Mexico by the filing of a record by the secretary of state;
(4) reserved pursuant to the provisions of Section 113 of the Revised Uniform Limited Liability Company Act or another law of New Mexico providing for the reservation of a name by the filing of a record by the secretary of state; and
(5) registered pursuant to the provisions of Section 114 of that act or another law of New Mexico providing for the registration of a name by the filing of a record by the secretary of state.
C. If a person consents in a record to the use of its name and submits an undertaking in a form satisfactory to the secretary of state to change its name to a name that is distinguishable on the records of the secretary of state from any name in any category of names specified in Subsection B of this section, the name of the consenting person may be used by the person to which the consent was given.
D. Except as otherwise provided in Subsection E of this section, in determining whether a name is the same as or not distinguishable on the records of the secretary of state from the name of another person, words, phrases or abbreviations indicating a type of person, such as "corporation", "corp.", "incorporated", "Inc.", "professional corporation", "P.C.", "PC", "professional association", "P.A.", "PA", "Limited", "Ltd.", "limited partnership", "L.P.", "LP", "limited liability partnership", "L.L.P.", "LLP", "registered limited liability partnership", "R.L.L.P.", "RLLP", "limited liability limited partnership", "L.L.L.P.", "LLLP", "registered limited liability limited partnership", "R.L.L.L.P.", "RLLLP", "limited liability company", "L.L.C." and "LLC", shall not be taken into account.
E. A person may consent in a record to the use of a name that is not distinguishable on the records of the secretary of state from its name except for the addition of a word, phrase or abbreviation indicating the type of person as provided in Subsection D of this section. In such a case, the person need not change its name pursuant to the provisions of Subsection B of this section.
F. A limited liability company or foreign limited liability company may use a name that is not distinguishable from a name described in Paragraphs (1) through (5) of Subsection B of this section if the company delivers to the secretary of state a certified copy of a final judgment of the district court establishing the right of the company to use the name in New Mexico.
SECTION 113. [NEW MATERIAL] RESERVATION OF NAME.--
A. A person may reserve the exclusive use of a name that complies with the provisions of Section 112 of the Revised Uniform Limited Liability Company Act by delivering an application to the secretary of state for filing. The application shall state the name and address of the applicant and the name to be reserved. If the secretary of state finds that the name is available, the secretary of state shall reserve the name for the applicant's exclusive use for one hundred twenty days.
B. The owner of a reserved name may transfer the reservation to another person by delivering to the secretary of state a signed notice in a record of the transfer that states the name and address of the person to which the reservation is being transferred.
SECTION 114. [NEW MATERIAL] REGISTRATION OF NAME.--
A. A foreign limited liability company not registered to do business in New Mexico pursuant to the provisions of Article 9 of the Revised Uniform Limited Liability Company Act may register its name, or an alternate name adopted pursuant to the provisions of Section 906 of that act, if the name is distinguishable on the records of the secretary of state from the names that are not available pursuant to the provisions of Section 112 of that act.
B. To register its name or an alternate name adopted pursuant to the provisions of Section 906 of the Revised Uniform Limited Liability Company Act, a foreign limited liability company shall deliver to the secretary of state for filing an application stating the company's name, the jurisdiction and date of its formation and any alternate name adopted pursuant to the provisions of Section 906 of that act. If the secretary of state finds that the name applied for is available, the secretary of state shall register the name for the applicant's exclusive use.
C. The registration of a name pursuant to the provisions of this section is effective for one year after the date of registration.
D. A foreign limited liability company whose name registration is effective may renew the registration for successive one-year periods by delivering, not earlier than three months before the expiration of the registration, to the secretary of state for filing a renewal application that complies with the provisions of this section. When filed, the renewal application renews the registration for a succeeding one-year period.
E. A foreign limited liability company whose name registration is effective may register as a foreign limited liability company under the registered name or consent in a signed record to the use of that name by another person that is not an individual.
SECTION 115. [NEW MATERIAL] REGISTERED OFFICE AND REGISTERED AGENT--CHANGE OF PRINCIPAL PLACE OF BUSINESS.--
A. A limited liability company shall maintain in New Mexico:
(1) a registered office, which may be the same as the limited liability company's principal place of business; and
(2) a registered agent for service of process on the limited liability company that is either:
(a) an individual resident of New Mexico;
(b) a domestic corporation, limited liability company or partnership having a place of business in New Mexico that is the same as the registered office; or
(c) a foreign corporation, limited liability company or partnership authorized to transact business in New Mexico and that has a place of business that is the same as the registered office.
B. A limited liability company may change its registered office or registered agent by delivering to the secretary of state a statement setting forth:
(1) the name of the limited liability company;
(2) the name of its current registered agent;
(3) the street address of its current registered office; and
(4) if its current registered agent is to be changed:
(a) the name of its successor registered agent;
(b) the street address of the successor registered agent's place of business;
(c) a statement that such address is the same as the current address of the limited liability company's current registered office or, if there is a concurrent change in the address of the registered office, as the new address of the registered office; and
(d) a statement of the successor registered agent that the agent accepts the appointment;
(5) if the current address of the place of business of its current registered agent is to be changed, the new street address of the place of business of the current registered agent and a statement that the new street address is the same as the address of the limited liability company's registered office or, if there is a concurrent change in the address of the registered office, as the new street address of the registered office; or
(6) if the address of its current registered office is to be changed, the new street address to which the current registered office is to be changed and a statement that the new address is the same as the street address of the place of business of the current or, if there is a concurrent change of the current registered agent, of the successor registered agent of the limited liability company.
C. If a registered agent changes the street address of the registered agent's business office, the registered agent may change the street address of the registered office of any limited liability company corporation for which the registered agent is the registered agent by notifying the limited liability company in writing of the change and signing, either manually or in facsimile, and delivering to the secretary of state for filing a statement that complies with the requirements of this section but need not be responsive to Paragraph (4) of Subsection B of this section and recites that the corporation has been notified of the change.
D. If the secretary of state finds that the statement conforms to the provisions of this section, it shall file the statement in its office and, upon such filing, the change of registered agent, change of address of the registered office or change of the registered agent's place of business shall become effective and fulfill any requirement that such change be reported to the secretary of state.
E. A registered agent of a limited liability company may resign as registered agent by delivering a written notice, executed in duplicate, to the secretary of state, which shall mail a copy of the notice to the limited liability company at its principal place of business as shown on the records of the secretary of state. The resigning registered agent's appointment terminates thirty days after receipt of the notice by the secretary of state or on the effective date of the appointment of a successor registered agent, whichever occurs first.
F. A limited liability company shall notify the secretary of state of a change in the street address of its principal place of business by delivering a written statement to the secretary of state setting forth such change.
SECTION 116. [NEW MATERIAL] SERVICE OF PROCESS.--A limited liability company or a foreign limited liability company, regardless of whether registered pursuant to the provisions of the Uniform Revised Limited Partnership Act, shall be served with process in the manner prescribed by law and the New Mexico Rules of Civil Procedure.
SECTION 117. [NEW MATERIAL] FILING, SERVICE AND COPYING FEES.--The secretary of state shall charge and collect, for:
A. filing the original certificate of organization and issuing a certificate of organization, a fee of fifty dollars ($50.00);
B. filing amended or restated articles of merger and issuing a certificate of amended or restated articles, a fee of fifty dollars ($50.00);
C. filing articles of merger, conversion or consolidation and issuing a certificate of consolidation, a fee of one hundred dollars ($100);
D. filing articles of dissolution or revocation of dissolution, a fee of twenty-five dollars ($25.00);
E. issuing a certificate of good standing, a certificate of registration or a certificate for any purpose not otherwise specified, a fee of twenty-five dollars ($25.00); F. furnishing written information on any limited liability company, a fee of twenty-five dollars ($25.00);
G. providing any number of pages of documents or instruments pertaining to one limited liability company, a fee of ten dollars ($10.00); provided, however, that the secretary of state shall be required to furnish only one copy of each page at this fee;
H. providing a certification of documents or instruments pertaining to a limited liability company, a fee of twenty-five dollars ($25.00);
I. accepting an application for reservation of a name or for filing a notice of the transfer of any name reservation, a fee of twenty dollars ($20.00);
J. filing a statement of change of address of registered office or registered agent, or both, a fee of twenty dollars ($20.00);
K. filing an agent's statement of change of address of registered agent, a fee of twenty dollars ($20.00);
L. issuing a registration to a foreign limited liability company, a fee of one hundred dollars ($100);
M. filing an amendment of the registration of a foreign limited liability company, a fee of fifty dollars ($50.00);
N. filing an application for cancellation of registration of a foreign limited liability company and issuing a certificate of cancellation, a fee of twenty-five dollars ($25.00); and
O. filing a triennial report or any other report, statement, instrument or document not otherwise specified, a fee of twenty dollars ($20.00).
SECTION 118. [NEW MATERIAL] DELIVERY OF RECORD.--
A. Except as otherwise provided in the Revised Uniform Limited Liability Company Act, permissible means of delivery of a record include delivery by hand, mail, conventional commercial practice and electronic transmission.
B. Delivery of a record to the secretary of state is effective only when it is received by the secretary of state.
SECTION 119. [NEW MATERIAL] RESERVATION OF POWER TO AMEND OR REPEAL.--The legislature may amend or repeal all or part of the Revised Uniform Limited Liability Company Act, and all limited liability companies and foreign limited liability companies subject to that act are governed by the amendment or repeal.
ARTICLE 2
FORMATION; CERTIFICATE OF ORGANIZATION AND OTHER FILINGS
SECTION 201. [NEW MATERIAL] FORMATION OF LIMITED LIABILITY COMPANY--CERTIFICATE OF ORGANIZATION--FILING.--
A. One or more persons may act as organizers to form a limited liability company by delivering to the secretary of state for filing a certificate of organization.
B. A certificate of organization shall state:
(1) the name, which shall comply with the provisions of Section 112 of the Revised Uniform Limited Liability Company Act, of the limited liability company;
(2) the street address of the company's registered office and the name of the registered agent at that office; and
(3) the street and mailing address of the company's principal office, if different from the street address of its registered office.
C. A certificate of organization may contain statements as to matters other than those required by the provisions of Subsection B of this section, but those statements shall not vary or otherwise affect the provisions specified in Subsection C or D of Section 105 of the Revised Uniform Limited Liability Company Act in a manner inconsistent with the provisions of that section. However, a statement in a certificate of organization is not effective as a statement of authority.
D. A limited liability company is formed when the certificate of organization becomes effective and at least one person has become a member.
E. The organizer or organizers of a limited liability company shall file with the secretary of state:
(1) the signed original of the articles of organization, together with a duplicate copy, which may be either signed, photocopied or conformed;
(2) the statement of the person appointed registered agent, accepting appointment as registered agent; and
(3) any other documents required to be filed pursuant to the Revised Uniform Limited Liability Company Act. F. The secretary of state may accept a facsimile transmission for filing.
G. If the secretary of state determines that the documents delivered for filing conform with the provisions of the Revised Uniform Limited Liability Company Act, it shall, when all required filing fees have been paid:
(1) endorse on each signed original and duplicate copy the word "filed" and the date of its acceptance for filing;
(2) retain a signed original in the files of the secretary of state; and
(3) return each duplicate copy to the person who delivered it to the secretary of state or to that person's representative.
SECTION 202. [NEW MATERIAL] AMENDMENT OR RESTATEMENT OF CERTIFICATE OF ORGANIZATION.--
A. A certificate of organization may be amended or restated at any time.
B. To amend its certificate of organization, a limited liability company shall deliver to the secretary of state for filing an amendment stating:
(1) the name of the company;
(2) the date of filing of its initial certificate; and
(3) the text of the amendment.
C. To restate its certificate of organization, a limited liability company shall deliver to the secretary of state for filing a restatement, designated as a restatement in its heading.
D. If a member of a member-managed limited liability company or a manager of a manager-managed limited liability company knows that any information in a filed certificate of organization was inaccurate when the certificate was filed or has become inaccurate due to to changed circumstances, the member or manager shall promptly:
(1) cause the certificate to be amended; or
(2) if appropriate, deliver to the secretary of state for filing a statement of change pursuant to the provisions of Section 115 of the Revised Uniform Limited Liability Company Act or a statement of correction pursuant the provisions of Section 209 of that act.
SECTION 203. [NEW MATERIAL] SIGNING OF RECORDS TO BE DELIVERED FOR FILING TO SECRETARY OF STATE.--
A. A record delivered to the secretary of state for filing pursuant to the provisions of the Revised Uniform Limited Liability Company Act shall be signed as follows:
(1) except as otherwise provided in Paragraphs (2) and (3) of this subsection, a record signed by a limited liability company shall be signed by a person authorized by the company;
(2) a limited liability company's initial certificate of organization shall be signed by at least one person acting as an organizer;
(3) a record delivered on behalf of a dissolved limited liability company that has no member shall be signed by the person winding up the company's activities and affairs pursuant to the provisions of Subsection C of Section 702 of that act or a person appointed pursuant to the provisions of Subsection D of Section 702 of that act to wind up the activities and affairs;
(4) a statement of denial by a person pursuant to the provisions of Section 303 of that act shall be signed by that person; and
(5) any other record delivered on behalf of a person to the secretary of state for filing shall be signed by that person.
B. Any record delivered for filing pursuant to the provisions of the Revised Uniform Limited Liability Company Act may be signed by an agent. When the provisions of that act require a particular individual to sign a record and the individual is deceased or incapacitated, the record may be signed by a legal representative of the individual.
C. A person that signs a record as an agent or a legal representative affirms as a fact that the person is authorized to sign the record.
SECTION 204. [NEW MATERIAL] SIGNING AND FILING PURSUANT TO JUDICIAL ORDER.--
A. If a person required by the provisions of the Revised Uniform Limited Liability Company Act to sign a record or deliver a record to the secretary of state for filing pursuant to the provisions of that act does not do so, any other person that is aggrieved may petition the district court to order:
(1) the person to sign the record;
(2) the person to deliver the record to the secretary of state for filing; or
(3) the secretary of state to file the record unsigned.
B. If a petitioner pursuant to the provisions of Subsection A of this section is not the limited liability company or foreign limited liability company to which the record pertains, the petitioner shall make the company or foreign company a party to the action.
C. A record filed pursuant to the provisions of Paragraph (3) of Subsection A of this section is effective without being signed.
SECTION 205. [NEW MATERIAL] LIABILITY FOR INACCURATE INFORMATION IN FILED RECORD.--
A. If a record delivered to the secretary of state for filing pursuant to the provisions of the Revised Uniform Limited Liability Company Act and filed by the secretary of state contains inaccurate information, a person that suffers a loss by reliance on the information may recover damages for the loss from:
(1) a person that signed the record, or caused another to sign it on the person's behalf, and knew the information to be inaccurate at the time that the record was signed; and
(2) subject to the provisions of Subsection B of this section, a member of a member-managed limited liability company or a manager of a manager-managed limited liability company, if:
(a) the record was delivered for filing on behalf of the company; and
(b) the member or manager knew or had notice of the inaccuracy for a reasonably sufficient time before the information was relied upon so that, before the reliance, the member or manager reasonably could have: 1) effected an amendment pursuant to the provisions of Section 202 of the Revised Uniform Limited Liability Company Act; 2) filed a petition pursuant to the provisions of Section 204 of that act; or 3) delivered to the secretary of state for filing a statement of change pursuant to the provisions of Section 115 of that act or a statement of correction pursuant to the provisions of Section 209 of that act.
B. To the extent that the operating agreement of a member-managed limited liability company expressly relieves a member of responsibility for maintaining the accuracy of information contained in records delivered on behalf of the company to the secretary of state for filing pursuant to the provisions of the Revised Uniform Limited Liability Company Act and imposes that responsibility on one or more other members, the liability stated in Paragraph (2) of Subsection A of this section applies to those other members and not to the member that the operating agreement relieves of the responsibility.
C. An individual who signs a record authorized or required to be filed pursuant to the provisions of the Revised Uniform Limited Liability Company Act affirms under penalty of perjury that the information stated in the record is accurate.
SECTION 206. [NEW MATERIAL] FILING REQUIREMENTS.--
A. To be filed by the secretary of state pursuant to the provisions of the Revised Uniform Limited Liability Company Act, a record shall be received by the secretary of state, comply with the provisions of that act and:
(1) have its filing required or permitted by the provisions of that act;
(2) be physically delivered in written form unless and to the extent that the secretary of state permits electronic delivery of records;
(3) have its words in English and its numbers in Arabic or Roman numerals. However, the name of an entity need not be in English if written in English letters or Arabic or Roman numerals;
(4) be signed by a person authorized or required by the provisions of that act to sign the record; and
(5) state the name and capacity, if any, of each individual who signed the record, either on behalf of the individual or the person authorized or required to sign it, but the record need not contain a seal, attestation, acknowledgment or verification.
B. If a provision of law other than one in the Revised Uniform Limited Liability Company Act prohibits the disclosure by the secretary of state of information contained in a record delivered to the secretary of state for filing, the secretary of state shall file the record if the record otherwise complies with the provisions of that act. However, the secretary of state may redact the information whose disclosure is prohibited.
C. When a record is delivered to the secretary of state for filing, a fee, tax, interest or penalty required to be paid pursuant to the provisions of the Revised Uniform Limited Liability Company Act or other law shall be paid in a manner permitted by the secretary of state or required by that law.
D. The secretary of state may require that a record delivered in written form be accompanied by an identical or conformed copy.
E. The secretary of state may provide forms for filings that are required or permitted to be made by the provisions of the Revised Uniform Limited Liability Company Act. However, except as otherwise provided pursuant to the provisions of Subsection F of this section, the use of such forms is not required.
F. The secretary of state may require that a cover sheet for a filing be on a form prescribed by the secretary of state.
SECTION 207. [NEW MATERIAL] EFFECTIVE DATE AND TIME.--Except as otherwise provided in Section 208 of the Revised Uniform Limited Liability Company Act, and subject to the provisions of Subsection D of Section 209 of that act, a record filed pursuant to the provisions of that act is effective:
A. on the date and at the time of its filing by the secretary of state, as provided in Subsection B of Section 210 of that act;
B. if later than the time specified in Subsection A of this section, on the date of filing and at the time specified in the record as its effective time;
C. at the specified delayed effective date and time, which shall not be more than ninety days after the date of filing; or
D. if a delayed effective date, but no time, is specified, at 12:01 a.m. on the date specified, which shall not be more than ninety days after the date of filing.
SECTION 208. [NEW MATERIAL] WITHDRAWAL OF FILED RECORD BEFORE EFFECTIVENESS.--
A. Except as otherwise provided in Sections 1010, 1016, 1022 and 1028 of the Revised Uniform Limited Liability Company Act, a record delivered to the secretary of state for filing may be withdrawn before it takes effect by delivering to the secretary of state for filing a statement of withdrawal.
B. A statement of withdrawal shall:
(1) be signed by each person that signed the record being withdrawn, except as otherwise agreed by those persons;
(2) identify the record to be withdrawn; and
(3) if signed by fewer than all of the persons that signed the record being withdrawn, state that the record is withdrawn in accordance with the agreement of all of the persons that signed the record.
C. On filing by the secretary of state of a statement of withdrawal, the action or transaction evidenced by the original record does not take effect.
SECTION 209. [NEW MATERIAL] CORRECTING FILED RECORD.--
A. A person on whose behalf a filed record was delivered to the secretary of state for filing may correct the record if:
(1) the record at the time of filing was inaccurate;
(2) the record was defectively signed; or
(3) the electronic transmission of the record to the secretary of state was defective.
B. To correct a filed record, a person on whose behalf the record was delivered to the secretary of state shall deliver to the secretary of state for filing a statement of correction.
C. A statement of correction shall:
(1) not state a delayed effective date;
(2) be signed by the person correcting the filed record;
(3) identify the filed record to be corrected;
(4) specify the inaccuracy or defect to be corrected; and
(5) correct the inaccuracy or defect.
D. A statement of correction is effective as of the effective date of the filed record that it corrects except as to persons relying on the uncorrected filed record and adversely affected by the correction. For those purposes and as to those persons, the statement of correction is effective when filed.
SECTION 210. [NEW MATERIAL] DUTY OF SECRETARY OF STATE TO FILE--REVIEW OF REFUSAL TO FILE--DELIVERY OF RECORD BY SECRETARY OF STATE.--
A. The secretary of state shall file a record that satisfies the provisions of the Revised Uniform Limited Liability Company Act and that is delivered to the secretary of state for filing. The duty of the secretary of state stated in this section is ministerial.
B. When the secretary of state files a record, the secretary of state shall record it as filed on the date and at the time of its delivery. After filing a record, the secretary of state shall deliver to the person that submitted the record a copy of the record with an acknowledgment of the date and time of filing and, in the case of a statement of denial, also to the limited liability company to which the statement pertains.
C. If the secretary of state refuses to file a record, the secretary of state shall, within fifteen business days after the record is delivered:
(1) return the record or notify the person that submitted the record of the refusal; and
(2) provide a brief explanation in a record of the reason for the refusal.
D. If the secretary of state refuses to file a record, the person that submitted the record may petition the district court to compel the filing of the record. The record and the explanation of the secretary of state of the refusal to file shall be attached to the petition. The court may decide the matter in a summary proceeding.
E. The filing of or refusal to file a record does not:
(1) affect the validity or invalidity of the record in whole or in part; or
(2) create a presumption that the information contained in the record is correct or incorrect.
F. The secretary of state may deliver any record to a person by delivering it:
(1) in person to the person that submitted it;
(2) to the address of the person's registered agent;
(3) to the principal office of the person; or
(4) to another address that the person provides to the secretary of state for delivery.
SECTION 211. [NEW MATERIAL] CERTIFICATE OF GOOD STANDING OR REGISTRATION.--
A. On request of any person, the secretary of state shall issue a certificate of good standing for a limited liability company or a certificate of registration for a registered foreign limited liability company.
B. A certificate issued pursuant to the provisions of Subsection A of this section shall state:
(1) the limited liability company's name or the registered foreign limited liability company's name used in New Mexico;
(2) in the case of a limited liability company:
(a) that a certificate of organization has been filed and has taken effect;
(b) the date that the certificate became effective;
(c) if the records of the secretary of state reflect that the company's period of duration is less than perpetual, the period of the company's duration; and
(d) that: 1) no statement of dissolution, statement of administrative dissolution or statement of termination has been filed; 2) the records of the secretary of state do not otherwise reflect that the company has been dissolved or terminated; and 3) a proceeding is not pending pursuant to the provisions of Section 708 of the Revised Uniform Limited Liability Company Act;
(3) in the case of a registered foreign limited liability company, that it is registered to do business in New Mexico;
(4) that all fees, taxes, interest and penalties owed to New Mexico by the limited liability company or foreign limited liability company and collected through the secretary of state have been paid, if:
(a) payment is reflected in the records of the secretary of state; and
(b) nonpayment affects the good standing or registration of the company or foreign company;
(5) that the most recent triennial report required by the provisions of Section 212 of the Revised Uniform Limited Liability Company Act has been delivered to the secretary of state for filing; and
(6) other facts reflected in the records of the secretary of state pertaining to the limited liability company or foreign limited liability company that the person requesting the certificate reasonably requests.
C. Subject to any qualification stated in the certificate, a certificate issued by the secretary of state pursuant to the provisions of Subsection A of this section may be relied on as conclusive evidence of the facts stated in the certificate.
SECTION 212. [NEW MATERIAL] TRIENNIAL REPORT FOR SECRETARY OF STATE.--
A. A limited liability company or registered foreign limited liability company shall deliver to the secretary of state for filing a triennial report that states:
(1) the name of the company or foreign company;
(2) the street address of its registered office in New Mexico and the name of the registered agent at that office;
(3) the street and mailing addresses of its principal office, if different from the street address of its registered office;
(4) if the company is member managed, the name of at least one member;
(5) if the company is manager managed, the name of at least one manager; and
(6) in the case of a foreign company, its jurisdiction of formation and any alternate name adopted pursuant to the provisions of Subsection A of Section 906 of the Revised Uniform Limited Liability Company Act.
B. Information in the triennial report shall be current as of the date that the report is signed by the limited liability company or registered foreign limited liability company.
C. The first triennial report shall be delivered to the secretary of state for filing by the end of the first calendar month that follows the date on which the limited liability company's certificate of organization became effective or the registered limited liability company registered to do business in New Mexico. Subsequent reports shall be delivered for filing to the secretary of state during the corresponding months of each third calendar year thereafter. The secretary of state may provide by rule for the orderly transition over several years of report filing for limited liability companies formed before July 1, 2016.
D. If a triennial report does not contain the information required by this section, the secretary of state shall promptly notify the reporting limited liability company or registered foreign limited liability company of the deficiency in a record and return the report for correction.
E. If a triennial report contains the name or address of a registered agent that differs from the information shown in the records of the secretary of state immediately before the report becomes effective, the differing information in the report is considered a statement of change under Section 115 of the Revised Uniform Limited Liability Company Act.
ARTICLE 3
RELATIONS OF MEMBERS AND MANAGERS
TO PERSONS DEALING WITH LIMITED LIABILITY COMPANY
SECTION 301. [NEW MATERIAL] NO AGENCY POWER OF MEMBER AS MEMBER.--
A. A member is not an agent of a limited liability company solely by reason of being a member.
B. A person's status as a member does not prevent or restrict a law other than one in the Revised Uniform Limited Liability Company Act from imposing liability on a limited liability company because of the person's conduct.
SECTION 302. [NEW MATERIAL] STATEMENT OF AUTHORITY.--
A. A limited liability company may deliver to the secretary of state for filing a statement of authority. The statement:
(1) shall include the name of the company and the name and street and mailing addresses of its registered agent;
(2) with respect to any position that exists in or with respect to the company, may state the authority, or limitations on the authority, of all persons holding the position to:
(a) sign an instrument transferring real property held in the name of the company; or
(b) enter into other transactions on behalf of, or otherwise act for or bind, the company; and
(3) may state the authority, or limitations on the authority, of a specific person to:
(a) sign an instrument transferring real property held in the name of the company; or
(b) enter into other transactions on behalf of, or otherwise act for or bind, the company.
B. To amend or cancel a statement of authority filed by the secretary of state, a limited liability company shall deliver to the secretary of state for filing an amendment or cancellation stating:
(1) the name of the company;
(2) the name and street and mailing addresses of the company's registered agent;
(3) the date the statement being affected became effective; and
(4) the contents of the amendment or a declaration that the statement is canceled.
C. A statement of authority affects only the power of a person to bind a limited liability company to persons that are not members.
D. Subject to the provisions of Subsection C of this section and Subsection D of Section 103 of the Revised Uniform Limited Liability Company Act, and except as otherwise provided in Subsections F, G and H of this section, a limitation on the authority of a person or a position contained in an effective statement of authority is not by itself evidence of a person's knowledge or notice of the limitation.
E. Subject to the provisions of Subsection C of this section, a grant of authority not pertaining to transfers of real property and contained in an effective statement of authority is conclusive in favor of a person that gives value in reliance on the grant, except to the extent that when the person gives value:
(1) the person has knowledge to the contrary;
(2) the statement has been canceled or restrictively amended pursuant to the provisions of Subsection B of this section; or
(3) a limitation on the grant is contained in another statement of authority that became effective after the statement containing the grant became effective.
F. Subject to the provisions of Subsection C of this section, an effective statement of authority that grants authority to transfer real property held in the name of the limited liability company, a certified copy of which statement is recorded in the office for recording transfers of the real property, is conclusive in favor of a person that gives value in reliance on the grant without knowledge to the contrary, except to the extent that when the person gives value:
(1) the statement has been canceled or restrictively amended pursuant to the provisions of Subsection B of this section and a certified copy of the cancellation or restrictive amendment has been recorded in the office for recording transfers of the real property; or
(2) a limitation on the grant is contained in another statement of authority that became effective after the statement containing the grant became effective, and a certified copy of the later-effective statement is recorded in the office for recording transfers of the real property.
G. Subject to the provisions of Subsection C of this section, if a certified copy of an effective statement containing a limitation on the authority to transfer real property held in the name of a limited liability company is recorded in the office for recording transfers of that real property, all persons are deemed to know of the limitation.
H. Subject to the provisions of Subsection I of this section, an effective statement of dissolution or termination is a cancellation of any filed statement of authority for the purposes of the provisions of Subsection F of this section and is a limitation on authority for the purposes of the provisions of Subsection G of this section.
I. After a statement of dissolution becomes effective, a limited liability company may deliver to the secretary of state for filing and, if appropriate, may record a statement of authority that is designated as a post-dissolution statement of authority. The statement operates pursuant to the provisions of the provisions of Subsections F and G of this section.
J. Unless earlier canceled, an effective statement of authority is canceled by operation of law five years after the date on which the statement, or its most recent amendment, becomes effective. This cancellation operates without need for any recording pursuant to the provisions of Subsection F or G of this section.
K. An effective statement of denial operates as a restrictive amendment pursuant to the provisions of this section and may be recorded by certified copy for purposes of the provisions of Paragraph (1) of Subsection F of this section.
SECTION 303. [NEW MATERIAL] STATEMENT OF DENIAL.--A person named in a filed statement of authority granting that person authority may deliver to the secretary of state for filing a statement of denial that:
A. provides the name of the limited liability company and the caption of the statement of authority to which the statement of denial pertains; and
B. denies the grant of authority.
SECTION 304. [NEW MATERIAL] LIABILITY OF MEMBERS AND MANAGERS.--
A. A debt, an obligation or another liability of a limited liability company is solely the debt, obligation or other liability of the company. A member or manager is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, an obligation or another liability of the company solely by reason of being or acting as a member or manager. The provisions of this subsection apply regardless of the dissolution of the company.
B. The failure of a limited liability company to observe formalities relating to the exercise of its powers or management of its activities and affairs is not a ground for imposing liability on a member or manager for a debt, an obligation or another liability of the company.
ARTICLE 4
RELATIONS OF MEMBERS TO EACH OTHER AND
TO LIMITED LIABILITY COMPANY
SECTION 401. [NEW MATERIAL] BECOMING MEMBER.--
A. If a limited liability company is to have only one member upon formation, the person becomes a member as agreed by that person and the organizer of the company. That person and the organizer may, but need not, be different persons. If different, the organizer acts on behalf of the initial member.
B. If a limited liability company is to have more than one member upon formation, those persons become members as agreed by the persons before the formation of the company. The organizer acts on behalf of the persons in forming the company and may, but need not, be one of the persons.
C. After formation of a limited liability company, a person becomes a member:
(1) as provided in the operating agreement;
(2) as the result of a transaction effective pursuant to the provisions of Article 10 of the Revised Uniform Limited Liability Company Act;
(3) with the affirmative vote or consent of all of the members; or
(4) as provided in Paragraph (3) of Subsection A of Section 701 of that act.
D. A person may become a member without:
(1) acquiring a transferable interest; or
(2) making or being obligated to make a contribution to the limited liability company.
SECTION 402. [NEW MATERIAL] FORM OF CONTRIBUTION.--A contribution may consist of property transferred to, services performed for or another benefit provided to the limited liability company or an agreement to transfer property to, perform services for or provide another benefit to the company.
SECTION 403. [NEW MATERIAL] LIABILITY FOR CONTRIBUTIONS.--
A. A person's obligation to make a contribution to a limited liability company is not excused by the person's death, disability, termination or other inability to perform personally.
B. If a person does not fulfill an obligation to make a contribution other than money, the person is obligated at the option of the limited liability company to contribute money equal to the value of the part of the contribution that has not been made.
C. The obligation of a person to make a contribution may be compromised only by the affirmative vote or consent of all of the members. If a creditor of a limited liability company extends credit or otherwise acts in reliance on an obligation described in Subsection A of this section without knowledge or notice of a compromise pursuant to the provisions of this subsection, the creditor may enforce the obligation.
SECTION 404. [NEW MATERIAL] SHARING OF AND RIGHT TO DISTRIBUTIONS BEFORE DISSOLUTION.--
A. A distribution made by a limited liability company before its dissolution and winding up shall be in equal shares among members and persons dissociated as members, except to the extent necessary to comply with a transfer effective pursuant to the provisions of Section 502 of the Revised Uniform Limited Liability Company Act or charging order in effect pursuant to the provisions of Section 503 of that act.
B. A person has a right to a distribution before the dissolution and winding up of a limited liability company only if the company decides to make an interim distribution. A person's dissociation does not entitle the person to a distribution.
C. A person does not have a right to demand or receive a distribution from a limited liability company in a form other than money. Except as otherwise provided in Subsection D of Section 707 of the Revised Uniform Limited Liability Company Act, a company may distribute an asset in kind only if each part of the asset is fungible with each other part and each person receives a percentage of the asset equal in value to the person's share of distributions.
D. If a member or transferee becomes entitled to receive a distribution, the member or transferee has the status of, and is entitled to all remedies available to, a creditor of the limited liability company with respect to the distribution. However, the company's obligation to make a distribution is subject to offset for any amount owed to the company by the member or a person dissociated as a member on whose account the distribution is made.
SECTION 405. [NEW MATERIAL] LIMITATIONS ON DISTRIBUTIONS.--
A. A limited liability company shall not make a distribution, including a distribution pursuant to the provisions of Section 707 of the Revised Uniform Limited Liability Company Act, if after the distribution:
(1) the company would not be able to pay its debts as they become due in the ordinary course of the company's activities and affairs; or
(2) the company's total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the company were to be dissolved and wound up at the time of the distribution, to satisfy the preferential rights upon dissolution and winding up of members and transferees whose preferential rights are superior to the rights of persons receiving the distribution.
B. A limited liability company may base a determination that a distribution is not prohibited as provided in Subsection A of this section on:
(1) financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances; or
(2) a fair valuation or other method that is reasonable under the circumstances.
C. Except as otherwise provided in Subsection E of this section, the effect of a distribution as provided in Subsection A of this section is measured:
(1) in the case of a distribution as defined in Paragraph (2) of Subsection D of Section 102 of the Revised Uniform Limited Liability Company Act, as of the earlier of the date that:
(a) money or other property is transferred or debt is incurred by the limited liability company; or
(b) the person entitled to the distribution ceases to own the interest or right being acquired by the company in return for the distribution;
(2) in the case of any other distribution of indebtedness, as of the date the indebtedness is distributed; and
(3) in all other cases, as of the date that the:
(a) distribution is authorized, if the payment occurs within one hundred twenty days after that date; or
(b) payment is made, if the payment occurs more than one hundred twenty days after the distribution is authorized.
D. A limited liability company's indebtedness to a member or transferee incurred by reason of a distribution made in accordance with the provisions of this section is at parity with the company's indebtedness to its general, unsecured creditors, except to the extent that it is subordinated by agreement.
E. A limited liability company's indebtedness, including indebtedness issued as a distribution, is not a liability for purposes of the provisions of Subsection A of this section if the terms of the indebtedness provide that payment of principal and interest is made only if and to the extent that payment of a distribution could be made pursuant to this section. If the indebtedness is issued as a distribution, each payment of principal or interest is treated as a distribution, the effect of which is measured on the date the payment is made.
F. In measuring the effect of a distribution pursuant to the provisions of Section 707 of the Revised Uniform Limited Liability Company Act, the liabilities of a dissolved limited liability company do not include a claim that has been disposed of pursuant to the provisions of Section 704, 705 or 706 of that act.
SECTION 406. [NEW MATERIAL] LIABILITY FOR IMPROPER DISTRIBUTIONS.--
A. Except as otherwise provided in Subsection B of this section, if a member of a member-managed limited liability company or manager of a manager-managed limited liability company consents to a distribution made in violation of the provisions of Section 405 of the Revised Uniform Limited Liability Company Act and in consenting to the distribution fails to comply with the provisions of Section 409 of that act, the member or manager is personally liable to the company for the amount of the distribution that exceeds the amount that could have been distributed without the violation of the provisions of Section 405 of that act.
B. To the extent that the operating agreement of a
member-managed limited liability company expressly relieves a member of the authority and responsibility to consent to distributions and imposes that authority and responsibility on one or more other members, the liability stated in Subsection A of this section applies to the other members and not the member that the operating agreement relieves of the authority and responsibility.
C. A person that receives a distribution knowing that the distribution violated the provisions of Section 405 of the Revised Uniform Limited Liability Company Act is personally liable to the limited liability company, but only to the extent that the distribution received by the person exceeded the amount that could have been properly paid pursuant to the provisions of Section 405 of that act.
D. A person against which an action is commenced because the person is liable pursuant to the provisions of Subsection A of this section may:
(1) implead any other person that is liable pursuant to the provisions of that subsection and seek to enforce a right of contribution from the person; and
(2) implead any person that received a distribution in violation of the provisions of Subsection C of this section and seek to enforce a right of contribution from the person in the amount that the person received in violation that subsection.
E. An action pursuant to the provisions of this section is barred unless it is commenced within two years after the distribution.
SECTION 407. [NEW MATERIAL] MANAGEMENT OF LIMITED LIABILITY COMPANY.--
A. A limited liability company is a member-managed limited liability company unless the operating agreement:
(1) expressly provides that:
(a) the company is or will be "manager-managed";
(b) the company is or will be "managed by managers"; or
(c) management of the company is or will be "vested in managers"; or
(2) includes words of similar import.
B. In a member-managed limited liability company:
(1) except as expressly provided in the Revised Uniform Limited Liability Company Act, the management and conduct of the company are vested in the members;
(2) each member has equal rights in the management and conduct of the company's activities and affairs;
(3) a difference arising among members as to a matter in the ordinary course of the activities and affairs of the company may be decided by a majority of the members; and
(4) the affirmative vote or consent of all the members is required to:
(a) undertake an act outside the ordinary course of the activities and affairs of the company; or
(b) amend the operating agreement.
C. In a manager-managed limited liability company:
(1) except as expressly provided in the Revised Uniform Limited Liability Company Act, any matter relating to the activities and affairs of the company is decided exclusively by the manager or, if there is more than one manager, by a majority of the managers;
(2) each manager has equal rights in the management and conduct of the company's activities and affairs;
(3) the affirmative vote or consent of all members is required to:
(a) undertake an act outside the ordinary course of the company's activities and affairs; or
(b) amend the operating agreement;
(4) a manager may be chosen at any time by the affirmative vote or consent of a majority of the members and remains a manager until a successor has been chosen, unless the manager at an earlier time resigns, is removed, dies or, in the case of a manager that is not an individual, terminates. A manager may be removed, without notice or cause, at any time by the affirmative vote or consent of a majority of the members;
(5) a person need not be a member to be a manager, but the dissociation of a member that is also a manager removes the person as a manager. If a person that is both a manager and a member ceases to be a manager, that cessation does not by itself dissociate the person as a member; and
(6) a person's ceasing to be a manager does not discharge any debt, obligation or other liability to the limited liability company or members that the person incurred while a manager.
D. An action requiring the vote or consent of members pursuant to the provisions of the Revised Uniform Limited Liability Company Act may be taken without a meeting, and a member may appoint a proxy or another agent to vote, consent or otherwise act for the member by signing an appointing record, personally or by the member's agent.
E. The dissolution of a limited liability company does not affect the applicability of this section. However, a person that wrongfully causes dissolution of the company loses the right to participate in management as a member and a manager.
F. A limited liability company shall reimburse a member for an advance to the company beyond the amount of capital that the member agreed to contribute.
G. A payment or advance made by a member that gives rise to an obligation of the limited liability company pursuant to the provisions of Subsection F of this section or Subsection A of Section 408 of the Revised Uniform Limited Liability Company Act constitutes a loan to the company that accrues interest from the date of the payment or advance.
H. A member is not entitled to remuneration for services performed for a member-managed limited liability company, except for reasonable compensation for services rendered in winding up the activities of the company.
SECTION 408. [NEW MATERIAL] REIMBURSEMENT--INDEMNIFICATION--ADVANCEMENT--INSURANCE.--
A. A limited liability company shall reimburse a member of a member-managed company or the manager of a manager-managed company for any payment made by the member or manager in the course of the member's or manager's activities on behalf of the company if the member or manager complied with the provisions of Sections 405, 407 and 409 of the Revised Uniform Limited Liability Company Act in making the payment.
B. A limited liability company shall indemnify and hold harmless a person with respect to any claim or demand against the person and any debt, obligation or other liability incurred by the person by reason of the person's former or present capacity as a member or manager, if the claim, demand, debt, obligation or other liability does not arise from the person's breach of the provisions of Section 405, 407 or 409 of the Revised Uniform Limited Liability Company Act.
C. In the ordinary course of its activities and affairs, a limited liability company may advance reasonable expenses, including attorney fees and costs, incurred by a person in connection with a claim or demand against the person by reason of the person's former or present capacity as a member or manager, if the person promises to repay the company if the person ultimately is determined not to be entitled to be indemnified as provided in Subsection B of this section.
D. A limited liability company may purchase and maintain insurance on behalf of a member or manager against liability asserted against or incurred by the member or manager in that capacity or arising from that status even if, pursuant to the provisions of Paragraph (7) of Subsection C of Section 105 of the Revised Uniform Limited Liability Company Act, the operating agreement could not eliminate or limit the person's liability to the company for the conduct giving rise to the liability.
SECTION 409. [NEW MATERIAL] STANDARDS OF CONDUCT FOR MEMBERS AND MANAGERS.--
A. A member of a member-managed limited liability company owes to the company and, subject to the provisions of Section 801 of the Revised Uniform Limited Liability Company Act, the other members the duties of loyalty and care stated in Subsections B and C of this section.
B. The fiduciary duty of loyalty of a member in a member-managed limited liability company includes the duties to:
(1) account to the company and hold as trustee for it any property, profit or benefit derived by the member:
(a) in the conduct or winding up of the company's activities and affairs;
(b) from a use by the member of the company's property; or
(c) from the appropriation of a company opportunity;
(2) refrain from dealing with the company in the conduct or winding up of the company's activities and affairs as or on behalf of a person having an interest adverse to the company; and
(3) refrain from competing with the company in the conduct of the company's activities and affairs before the dissolution of the company.
C. The duty of care of a member of a member-managed limited liability company in the conduct or winding up of the company's activities and affairs is to refrain from engaging in:
(1) grossly negligent or reckless conduct;
(2) willful or intentional misconduct; and
(3) knowing violation of law.
D. A member shall discharge the duties and obligations provided in the Revised Uniform Limited Liability Company Act or the operating agreement and exercise any rights consistently with the contractual obligation of good faith and fair dealing.
E. A member does not violate a duty or obligation provided in the Revised Uniform Limited Liability Company Act or the operating agreement solely because the member's conduct furthers the member's own interest.
F. All of the members of a member-managed limited liability company or a manager-managed limited liability company may authorize or ratify, after full disclosure of all material facts, a specific act or transaction that otherwise would violate the duty of loyalty.
G. It is a defense to a claim provided in Paragraph (2) of Subsection B of this section and any comparable claim in equity or at common law that the transaction was fair to the limited liability company.
H. If, as permitted by the provisions of Subsection F or Paragraph (6) of Subsection I of this section or the operating agreement, a member enters into a transaction with the limited liability company that otherwise would be prohibited by the provisions of Paragraph (2) of Subsection B of this section, then the member's rights and obligations arising from the transaction are the same as those of a person that is not a member.
I. In a manager-managed limited liability company:
(1) the provisions of Subsections A, B, C and G of this section apply to the manager or managers and not the members;
(2) the duty stated in Paragraph (3) of Subsection B of this section continues until winding up is completed;
(3) the provisions of Subsection D of this section apply to managers and members;
(4) the provisions of Subsection E of this section apply only to members;
(5) the power to ratify pursuant to the provisions of Subsection F of this section applies only to the members; and
(6) subject to the provisions of Subsection D of this section, a member does not have a duty to the company or to any other member solely by reason of being a member.
SECTION 410. [NEW MATERIAL] RIGHTS TO INFORMATION OF MEMBER, MANAGER AND PERSON DISSOCIATED AS MEMBER.--
A. In a member-managed limited liability company:
(1) on reasonable notice, a member may inspect and copy during regular business hours, at a reasonable location specified by the company, any record maintained by the company regarding the company's activities, affairs, financial condition and other circumstances, to the extent that the information is material to the member's rights and duties provided in the operating agreement or the Revised Uniform Limited Liability Company Act;
(2) the company shall furnish to each member:
(a) without demand, any information concerning the company's activities, affairs, financial condition and other circumstances that the company knows and is material to the proper exercise of the member's rights and duties provided in the operating agreement or the Revised Uniform Limited Liability Company Act, except to the extent that the company can establish that it reasonably believes the member already knows the information; and
(b) on demand, any other information concerning the company's activities, affairs, financial condition and other circumstances, except to the extent that the demand for the information demanded is unreasonable or otherwise improper under the circumstances; and
(3) the duty to furnish information pursuant to the provisions of Paragraph (2) of this subsection also applies to each member to the extent that the member knows any of the information described in that paragraph.
B. In a manager-managed limited liability company:
(1) the informational rights stated in Subsection A of this section and the duty stated in Paragraph (3) of Subsection A of this section apply to the managers and not the members;
(2) during regular business hours and at a reasonable location specified by the company, a member may inspect and copy information regarding the activities, affairs, financial condition and other circumstances of the company as is just and reasonable if:
(a) the member seeks the information for a purpose reasonably related to the member's interest as a member;
(b) the member makes a demand in a record received by the company, describing with reasonable particularity the information sought and the purpose for seeking the information; and
(c) the information sought is directly connected to the member's purpose;
(3) within ten days after receiving a demand pursuant to the provisions of Subparagraph (b) of Paragraph (2) of this subsection, the company shall in a record inform the member that made the demand of:
(a) what information the company will provide in response to the demand and the place and time that the company will provide the information; and
(b) the company's reasons for declining, if the company declines to provide any demanded information; and
(4) whenever the provisions of the Revised Uniform Limited Liability Company Act or of an operating agreement provide for a member to vote on or give or withhold consent to a matter, before the vote is cast or consent is given or withheld, the company shall, without demand, provide the member with all information that is known to the company and is material to the member's decision.
C. Subject to the provisions of Subsection H of this section, on ten days' demand made in a record received by a limited liability company, a person dissociated as a member may have access to the information to which the person was entitled while a member if:
(1) the information pertains to the period during which the person was a member;
(2) the person seeks the information in good faith; and
(3) the person satisfies the requirements imposed on a member by the provisions of Paragraph (2) of Subsection B of this section.
D. A limited liability company shall respond to a demand made pursuant to the provisions of Subsection C of this section in the manner provided in Paragraph (3) of Subsection B of this section.
E. A limited liability company may charge a person that makes a demand pursuant to the provisions of this section the reasonable costs of labor and material for copying.
F. A member or person dissociated as a member may exercise the rights provided in this section through an agent or, in the case of an individual under legal disability, a legal representative. A restriction or condition imposed by the provisions of the operating agreement or pursuant to Subsection H of this section applies both to the agent or legal representative and to the member or person dissociated as a member.
G. Subject to the provisions of Section 504 of the Revised Uniform Limited Liability Company Act, the rights stated in this section do not extend to a person as transferee.
H. In addition to any restriction or condition stated in its operating agreement, a limited liability company, as a matter within the ordinary course of its activities and affairs, may impose reasonable restrictions and conditions on access to and use of information to be furnished pursuant to the provisions of this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient. In a dispute concerning the reasonableness of a restriction provided in this subsection, the company has the burden of proving reasonableness.
ARTICLE 5
TRANSFERABLE INTERESTS AND RIGHTS OF TRANSFEREES AND CREDITORS
SECTION 501. [NEW MATERIAL] NATURE OF TRANSFERABLE INTEREST.--A transferable interest is personal property.
SECTION 502. [NEW MATERIAL] TRANSFER OF TRANSFERABLE INTEREST.--
A. Subject to the provisions of Subsection F of Section 503 of the Revised Uniform Limited Liability Company Act, a transfer, in whole or in part, of a transferable interest:
(1) is permissible;
(2) does not by itself cause a member's dissociation or a dissolution and winding up of the limited liability company's activities and affairs; and
(3) subject to the provisions of Section 504 of that act, does not entitle the transferee to:
(a) participate in the management or conduct of the company's activities and affairs; or
(b) except as otherwise provided in Subsection C of this section, have access to records or other information concerning the company's activities and affairs.
B. A transferee has the right to receive, in accordance with the transfer, distributions to which the transferor would otherwise be entitled.
C. In a dissolution and winding up of a limited liability company, a transferee is entitled to an account of the company's transactions only from the date of dissolution.
D. A transferable interest may be evidenced by a certificate of the interest issued by a limited liability company in a record, and, subject to the provisions of this section, the interest represented by a certificate may be transferred by a transfer of the certificate.
E. A limited liability company need not give effect to a transferee's rights pursuant to the provisions of this section until the company knows or has notice of the transfer.
F. A transfer of a transferable interest in violation of a restriction on transfer contained in the operating agreement is ineffective if the intended transferee has knowledge or notice of the restriction at the time of transfer.
G. Except as otherwise provided in Paragraph (2) of Subsection E of Section 602 of the Revised Uniform Limited Liability Company Act, if a member transfers a transferable interest, the transferor retains the rights of a member other than the transferable interest transferred and retains all of the duties and obligations of a member.
H. If a member transfers a transferable interest to a person that becomes a member with respect to the transferred interest, the transferee is liable for the member's obligations pursuant to the provisions of Sections 403 and 406 of the Revised Uniform Limited Liability Company Act and that are known to the transferee when the transferee becomes a member.
SECTION 503. [NEW MATERIAL] CHARGING ORDER.--
A. On application by a judgment creditor of a member or transferee, a court may enter a charging order against the transferable interest of the judgment debtor for the unsatisfied amount of the judgment. Except as otherwise provided in Subsection F of this section, a charging order constitutes a lien on a judgment debtor's transferable interest and requires the limited liability company to pay over to the person to which the charging order was issued any distribution that otherwise would be paid to the judgment debtor.
B. To the extent necessary to effectuate the collection of distributions pursuant to a charging order in effect pursuant to the provisions of Subsection A of this section, the court may:
(1) appoint a receiver of the distributions subject to the charging order, with the power to make all inquiries that the judgment debtor might have made; and
(2) make all other orders necessary to give effect to the charging order.
C. Upon a showing that distributions pursuant to a charging order will not pay the judgment debt within a reasonable time, the court may foreclose the lien and order the sale of the transferable interest. Except as otherwise provided in Subsection F of this section, the purchaser at the foreclosure sale obtains only the transferable interest, does not thereby become a member and is subject to the provisions of Section 502 of the Revised Uniform Limited Liability Company Act.
D. At any time before foreclosure pursuant to the provisions of Subsection C of this section, the member or transferee whose transferable interest is subject to a charging order issued pursuant to the provisions of Subsection A of this section may extinguish the charging order by satisfying the judgment and filing a certified copy of the satisfaction with the court that issued the charging order.
E. At any time before foreclosure pursuant to the provisions of Subsection C of this section, a limited liability company or one or more members whose transferable interests are not subject to the charging order may pay to the judgment creditor the full amount due under the judgment and thereby succeed to the rights of the judgment creditor, including the charging order.
F. If a court orders foreclosure of a charging order lien against the sole member of a limited liability company:
(1) the court shall confirm the sale;
(2) the purchaser at the sale obtains the member's entire interest, not only the member's transferable interest;
(3) the purchaser thereby becomes a member; and
(4) the person whose interest was subject to the foreclosed charging order is dissociated as a member.
G. The provisions of the Revised Uniform Limited Liability Company Act do not deprive a member or transferee of the benefit of any exemption law applicable to the transferable interest of the member or transferee.
H. The provisions of this section provide the exclusive remedy by which a person seeking in the capacity of judgment creditor to enforce a judgment against a member or transferee may satisfy the judgment from the judgment debtor's transferable interest.
SECTION 504. [NEW MATERIAL] POWER OF LEGAL REPRESENTATIVE OF DECEASED MEMBER.--If a member dies, the deceased member's legal representative may exercise:
A. the rights of a transferee provided in Subsection C of Section 502 of the Revised Uniform Limited Liability Company Act; and
B. for the purposes of settling the estate, the rights that the deceased member had pursuant to the provisions of Section 410 of that act.
ARTICLE 6
DISSOCIATION
SECTION 601. [NEW MATERIAL] POWER TO DISSOCIATE AS MEMBER--WRONGFUL DISSOCIATION.--
A. A person may dissociate as a member at any time, rightfully or wrongfully, by withdrawing as a member by express will pursuant to the provisions of Subsection A of Section 602 of the Revised Uniform Limited Liability Company Act.
B. A person's dissociation as a member is wrongful only if the dissociation:
(1) is in breach of an express provision of the operating agreement; or
(2) occurs before the completion of the winding up of the limited liability company and:
(a) the person withdraws as a member by express will;
(b) the person is expelled as a member by judicial order pursuant to the provisions of Subsection F of Section 602 of the Revised Uniform Limited Liability Company Act;
(c) the person is dissociated pursuant to the provisions of Subsection H of Section 602 of that act; or
(d) in the case of a person that is not a trust other than a business trust, an estate or an individual, the person is expelled or otherwise dissociated as a member because it willfully dissolved or terminated.
C. A person that wrongfully dissociates as a member is liable to the limited liability company and, subject to the provisions of Section 801 of the Revised Uniform Limited Liability Company Act, to the other members for damages caused by the dissociation. The liability is in addition to any debt, obligation or other liability of the member to the company or the other members.
SECTION 602. [NEW MATERIAL] EVENTS CAUSING DISSOCIATION.--A person is dissociated as a member when:
A. the limited liability company knows or has notice of the person's express will to withdraw as a member, but if the person has specified a withdrawal date later than the date the company knew or had notice, on that later date;
B. an event stated in the operating agreement as causing the person's dissociation occurs;
C. the person's entire interest is transferred in a foreclosure sale pursuant to the provisions of Subsection F of Section 503 of the Revised Uniform Limited Liability Company Act;
D. the person is expelled as a member pursuant to the provisions of the operating agreement;
E. the person is expelled as a member by the affirmative vote or consent of all the other members if:
(1) it is unlawful to carry on the limited liability company's activities and affairs with the person as a member;
(2) there has been a transfer of all of the person's transferable interest in the company other than a:
(a) transfer for security purposes; or
(b) charging order in effect pursuant to the provisions of Section 503 of the Revised Uniform Limited Liability Company Act and that has not been foreclosed;
(3) the person is an entity and:
(a) the company notifies the person that the person will be expelled as a member because the person has filed a statement of dissolution or the equivalent, the person has been administratively dissolved, the person's charter or the equivalent has been revoked or the person's right to conduct business has been suspended by the person's jurisdiction of formation; and
(b) within ninety days after the notification: 1) the statement of dissolution or the equivalent has not been withdrawn, rescinded or revoked; 2) the person has not been reinstated; or 3) the person's charter or the equivalent or right to conduct business has not been reinstated; or
(4) the person is an unincorporated entity that has been dissolved and whose activities and affairs are being wound up;
F. on application by the limited liability company or a member in a direct action taken pursuant to the provisions of Section 801 of the Revised Uniform Limited Liability Company Act, the person is expelled as a member by judicial order because the person:
(1) has engaged or is engaging in wrongful conduct that has affected adversely and materially, or will affect adversely and materially, the company's activities and affairs;
(2) has committed willfully or persistently, or is committing willfully and persistently, a material breach of the operating agreement or a duty or an obligation provided in Section 409 of the Revised Uniform Limited Liability Company Act; or
(3) has engaged in or is engaging in conduct relating to the company's activities and affairs that makes it not reasonably practicable to carry on the activities and affairs with the person as a member;
G. in the case of an individual:
(1) the individuals dies; or
(2) in a member-managed limited liability company:
(a) a guardian or general conservator for the individual is appointed; or
(b) a court orders that the individual has otherwise become incapable of performing the individual's duties as a member pursuant to the provisions of the Revised Uniform Limited Liability Company Act or the operating agreement;
H. in a member-managed limited liability company, the person:
(1) becomes a debtor in bankruptcy;
(2) signs an assignment for the benefit of creditors; or
(3) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the person or of all or substantially all of the person's property;
I. in the case of a person that is a testamentary or inter vivos trust or is acting as a member by virtue of being a trustee of such a trust, the trust's entire transferable interest in the limited liability company is distributed;
J. in the case of a person that is an estate or is acting as a member by virtue of being a personal representative of an estate, the estate's entire transferable interest in the limited liability company is distributed;
K. in the case of a person that is not an individual, the existence of the person terminates;
L. the limited liability company participates in a merger pursuant to the provisions of Article 10 of the Revised Uniform Limited Liability Company Act and:
(1) the company is not the surviving entity; or
(2) otherwise as a result of the merger, the person ceases to be a member;
M. the limited liability company participates in an interest exchange pursuant to the provisions of Article 10 of the Revised Uniform Limited Liability Company Act and, as a result of the interest exchange, the person ceases to be a member;
N. the limited liability company participates in a conversion pursuant to the provisions of Article 10 of the Revised Uniform Limited Liability Company Act;
O. the limited liability company participates in a domestication pursuant to the provisions of Article 10 of the Revised Uniform Limited Liability Company Act and, as a result of the domestication, the person ceases to be a member; or
P. the limited liability company dissolves and completes winding up.
SECTION 603. [NEW MATERIAL] EFFECT OF DISSOCIATION.--
A. If a person is dissociated as a member:
(1) the person's right to participate as a member in the management and conduct of the limited liability company's activities and affairs terminates;
(2) the person's duties and obligations as a member and as provided in Section 409 of the Revised Uniform Limited Liability Company Act end with regard to matters arising and events occurring after the person's dissociation; and
(3) subject to the provisions of Section 504 and Article 10 of that act, a transferable interest owned by the person in the person's capacity as a member immediately before dissociation is owned by the person solely as a transferee.
B. A person's dissociation as a member does not of itself discharge the person from debt, an obligation or another liability to the limited liability company or the other members that the person incurred while a member.
ARTICLE 7
DISSOLUTION AND WINDING UP
SECTION 701. [NEW MATERIAL] EVENTS CAUSING DISSOLUTION.--
A. A limited liability company is dissolved and its activities and affairs shall be wound up upon the occurrence of:
(1) an event or circumstance that the operating agreement states causes dissolution;
(2) the affirmative vote or consent of all of the members;
(3) the passage of ninety consecutive days during which the company has no members, unless before the end of the period:
(a) consent to admit at least one specified person as a member is given by transferees owning the rights to receive a majority of distributions as transferees at the time the consent is to be effective; and
(b) at least one person becomes a member in accordance with the consent;
(4) on application by a member, the entry by the district court of an order dissolving the company on the grounds that:
(a) the conduct of all or substantially all of the company's activities and affairs is unlawful;
(b) it is not reasonably practicable to carry on the company's activities and affairs in conformity with the certificate of organization and the operating agreement; or
(c) the managers or those members in control of the company: 1) have acted, are acting or will act in a manner that is illegal or fraudulent; or 2) have acted or are acting in a manner that is oppressive and was, is or will be directly harmful to the applicant; or
(5) the signing and filing of a statement of administrative dissolution by the secretary of state pursuant to the provisions of Section 708 of the Revised Uniform Limited Liability Company Act.
B. In a proceeding brought pursuant to the provisions of Subparagraph (c) of Paragraph (4) of Subsection A of this section, the court may order a remedy other than dissolution.
SECTION 702. [NEW MATERIAL] WINDING UP.--
A. A dissolved limited liability company shall wind up its activities and affairs and, except as otherwise provided in Section 703 of the Revised Uniform Limited Liability Company Act, the company continues after dissolution only for the purpose of winding up.
B. In winding up its activities, a limited liability company:
(1) shall discharge the company's debts, obligations and other liabilities, settle and close the company's activities and affairs and marshal and distribute the assets of the company; and
(2) may:
(a) deliver to the secretary of state for filing a statement of dissolution stating the name of the company and that the company is dissolved;
(b) preserve the company activities, affairs and property as a going concern for a reasonable time;
(c) prosecute and defend actions and proceedings, whether civil, criminal or administrative;
(d) transfer the company's property;
(e) settle disputes by mediation or arbitration;
(f) deliver to the secretary of state for filing a statement of termination stating the name of the company and that the company is terminated; and
(g) perform other acts necessary or appropriate to the winding up.
C. If a dissolved limited liability company has no members, the legal representative of the last person to have been a member may wind up the activities and affairs of the company. If the person does so, the person has the powers of a sole manager pursuant to the provisions of Subsection C of Section 407 of the Revised Uniform Limited Liability Company Act and is deemed to be a manager for the purposes of Subsection A of Section 304 of that act.
D. If the legal representative provided in Subsection C of this section declines or fails to wind up the limited liability company's activities and affairs, a person may be appointed to do so by the consent of transferees owning a majority of the rights to receive distributions as transferees at the time the consent is to be effective. A person appointed pursuant to the provisions of this subsection:
(1) has the powers of a sole manager pursuant to the provisions of Subsection C of Section 407 of the Revised Uniform Limited Liability Company Act and is deemed to be a manager for the purposes of the provisions of Subsection A of Section 304 of that act; and
(2) shall deliver promptly to the secretary of state for filing an amendment to the company's certificate of organization stating:
(a) that the company has no members;
(b) the name and street and mailing addresses of the person; and
(c) that the person has been appointed pursuant to the provisions of this subsection to wind up the company.
E. The district court may order judicial supervision of the winding up of a dissolved limited liability company, including the appointment of a person to wind up the company's activities and affairs:
(1) on the application of a member, if the applicant establishes good cause;
(2) on the application of a transferee, if:
(a) the company does not have any members;
(b) the legal representative of the last person to have been a member declines or fails to wind up the company's activities; and
(c) within a reasonable time following the dissolution, a person has not been appointed pursuant to the provisions of Subsection C of this section; or
(3) in connection with a proceeding as provided in Paragraph (4) of Subsection A of Section 701 of the Revised Uniform Limited Liability Company Act.
SECTION 703. [NEW MATERIAL] RESCINDING DISSOLUTION.--
A. Unless a statement of termination applicable to the limited liability company is effective, the district court has entered an order dissolving the company pursuant to the provisions of Paragraph (4) of Subsection A of Section 701 of the Revised Uniform Limited Liability Company Act or the secretary of state has dissolved the company pursuant to the provisions of Section 708 of that act, a limited liability company may rescind its dissolution.
B. Rescinding dissolution pursuant to the provisions of this section requires:
(1) the affirmative vote or consent of each member; and
(2) if the limited liability company has delivered to the secretary of state for filing a statement of dissolution and:
(a) the statement has not become effective, delivery to the secretary of state for filing of a statement of withdrawal pursuant to the provisions of Section 208 of the Revised Uniform Limited Liability Company Act applicable to the statement of dissolution; or
(b) if the statement of dissolution has become effective, delivery to the secretary of state for filing a statement of rescission stating the name of the company and that dissolution has been rescinded pursuant to the provisions of this section.
C. If a limited liability company rescinds its dissolution:
(1) the company resumes carrying on its activities and affairs as if dissolution had never occurred;
(2) subject to the provisions of Paragraph (3) of this subsection, any liability incurred by the company after the dissolution and before the rescission is effective is determined as if dissolution had never occurred; and
(3) the rights of a third party arising out of conduct in reliance on the dissolution before the third party knew or had notice of the rescission shall not be adversely affected.
SECTION 704. [NEW MATERIAL] KNOWN CLAIMS AGAINST DISSOLVED LIMITED LIABILITY COMPANY.--
A. Except as otherwise provided in Subsection D of this section, a dissolved limited liability company may give notice of a known claim pursuant to the provisions of Subsection B of this section, which has the effect provided in Subsection C of this section.
B. A dissolved limited liability company may in a record notify its known claimants of the dissolution. The notice shall:
(1) specify the information required to be included in a claim;
(2) state that a claim shall be in writing and provide a mailing address to which the claim is to be sent;
(3) state the deadline for receipt of a claim, which shall not be less than one hundred twenty days after the date the notice is received by the claimant; and
(4) state that the claim will be barred if not received by the deadline.
C. A claim against a dissolved limited liability company is barred if the requirements provided in Subsection B of this section are met and:
(1) the claim is not received by the specified deadline; or
(2) if the claim is timely received but rejected by the company:
(a) the company causes the claimant to receive a notice in a record stating that the claim is rejected and will be barred unless the claimant commences an action against the company to enforce the claim within ninety days after the claimant receives the notice; and
(b) the claimant does not commence the required action within the ninety days after the claimant receives the notice.
D. This section does not apply to a claim based on an event occurring after the date of dissolution or a liability that on that date is contingent.
SECTION 705. [NEW MATERIAL] OTHER CLAIMS AGAINST DISSOLVED LIMITED LIABILITY COMPANY.--
A. A dissolved limited liability company may publish notice of its dissolution and request persons having claims against the company to present them in accordance with the notice.
B. A notice provided in Subsection A of this section shall:
(1) be published at least once in a newspaper of general circulation in the county in New Mexico in which the dissolved limited liability company's principal office is located or, if the principal office is not located in New Mexico, in the county in which the office of the company's registered agent is or was last located;
(2) describe the information required to be contained in a claim, state that the claim must be in writing and provide a mailing address to which the claim is to be sent; and
(3) state that a claim against the company is barred unless an action to enforce the claim is commenced within three years after publication of the notice.
C. If a dissolved limited liability company publishes a notice in accordance with the provisions of Subsection B of this section, unless the claimant commences an action to enforce the claim against the company within three years after the publication date of the notice, the claim of each of the following claimants is barred:
(1) a claimant that did not receive notice in a record provided in Section 704 of the Revised Uniform Limited Liability Company Act;
(2) a claimant whose claim was timely sent to the company but not acted on; and
(3) a claimant whose claim is contingent at, or based on an event occurring after, the date of dissolution.
D. A claim not barred pursuant to the provisions of this section or Section 704 of the Revised Uniform Limited Liability Company Act may be enforced:
(1) against a dissolved limited liability company, to the extent of its undistributed assets; and
(2) except as otherwise provided in Section 706 of that act, if assets of the company have been distributed after dissolution, against a member or transferee to the extent of that person's proportionate share of the claim or of the company's assets distributed to the member or transferee after dissolution, whichever is less. However, a person's total liability for all claims pursuant to the provisions of this paragraph shall not exceed the total amount of assets distributed to the person after dissolution.
SECTION 706. [NEW MATERIAL] COURT PROCEEDINGS.--
A. A dissolved limited liability company that has published a notice pursuant to the provisions of Section 705 of the Revised Uniform Limited Liability Company Act may file an application with the district court in the county in New Mexico where the company's principal office is located or, if the principal office is not located in New Mexico, where the office of its registered agent is or was last located, for a determination of the amount and form of security to be provided for payment of claims that are reasonably expected to arise after the date of dissolution based on facts known to the company and:
(1) at the time of application:
(a) are contingent; or
(b) have not been made known to the company; or
(2) are based on an event occurring after the date of dissolution.
B. Security is not required for any claim that is or is reasonably anticipated to be barred pursuant to the provisions of Section 705 of the Revised Uniform Limited Liability Company Act.
C. Within ten days after the filing of an application pursuant to the provisions of Subsection A of this section, the dissolved limited liability company shall give notice of the proceeding to each claimant holding a contingent claim known to the company.
D. In a proceeding pursuant to the provisions of this section, the court may appoint a guardian ad litem to represent all claimants whose identities are unknown. The reasonable fees and expenses of the guardian, including all reasonable expert witness fees, shall be paid by the dissolved limited liability company.
E. A dissolved limited liability company that provides security in the amount and form ordered by the court pursuant to the provisions of Subsection A of this section satisfies the company's obligations with respect to claims that are contingent, have not been made known to the company or are based on an event occurring after the date of dissolution, and such claims shall not be enforced against a member or transferee on account of assets received in liquidation.
SECTION 707. [NEW MATERIAL] DISPOSITION OF ASSETS IN WINDING UP.--
A. In winding up its activities and affairs, a limited liability company shall apply its assets to discharge its obligations to creditors, including members that are creditors.
B. After a limited liability company complies with the provisions of Subsection A of this section, any surplus shall be distributed in the following order, subject to any charging order in effect pursuant to the provisions of Section 503 of the Revised Uniform Limited Liability Company Act:
(1) to each person owning a transferable interest that reflects contributions made and not previously returned, an amount equal to the value of the unreturned contributions; and
(2) among persons owning transferable interests, in proportion to their respective rights to share in distributions immediately before the dissolution of the company.
C. If a limited liability company does not have sufficient surplus to comply with the provisions of Paragraph (1) of Subsection B of this section, any surplus shall be distributed among the owners of transferable interests in proportion to the value of the respective unreturned contributions.
D. All distributions made pursuant to the provisions of Subsections B and C of this section shall be paid in money.
SECTION 708. [NEW MATERIAL] ADMINISTRATIVE DISSOLUTION.--
A. The secretary of state may commence a proceeding pursuant to the provisions of Subsection B of this section to dissolve a limited liability company administratively if the company does not:
(1) pay, within six months after it is due, a fee, tax or penalty required to be paid to the secretary of state;
(2) deliver, within six months after it is due, its triennial report to the secretary of state; or
(3) have a registered agent in New Mexico for thirty consecutive days.
B. If the secretary of state determines that one or more grounds exist for administratively dissolving a limited liability company, the secretary of state shall serve the company with notice in a record of the secretary of state's determination.
C. If, within sixty days after service of the notice provided in Subsection B of this section, a limited liability company does not cure or demonstrate to the satisfaction of the secretary of state the nonexistence of each ground determined by the secretary of state, the secretary of state shall administratively dissolve the company by signing a statement of administrative dissolution that recites the grounds for dissolution and the effective date of dissolution. The secretary of state shall file the statement and serve a copy on the company pursuant to the provisions of Section 210 of the Revised Uniform Limited Liability Company Act.
D. A limited liability company that is administratively dissolved continues in existence as an entity but shall not carry on any activities except as necessary to wind up its activities and affairs and liquidate its assets pursuant to the provisions of Sections 702 and 704 through 707 of the Revised Uniform Limited Liability Company Act or to apply for reinstatement pursuant to the provisions of Section 709 of that act.
E. The administrative dissolution of a limited liability company does not terminate the authority of its registered agent.
SECTION 709. [NEW MATERIAL] REINSTATEMENT.--
A. A limited liability company that is administratively dissolved pursuant to the provisions of Section 708 of the Revised Uniform Limited Liability Company Act may apply to the secretary of state for reinstatement within two years after the effective date of dissolution. The application shall state:
(1) the name of the company at the time of its administrative dissolution and, if needed, a different name that satisfies the provisions of Section 112 of that act;
(2) the address of the principal office of the company and the name and street and mailing addresses of its registered agent;
(3) the effective date of the company's administrative dissolution; and
(4) that the grounds for dissolution did not exist or have been cured.
B. To be reinstated, a limited liability company shall pay all fees, taxes, interest and penalties that were due to the secretary of state at the time of the company's administrative dissolution and all fees, taxes, interest and penalties that would have been due to the secretary of state while the company was administratively dissolved.
C. If the secretary of state determines that an application pursuant to the provisions of Subsection A of this section contains the required information, is satisfied that the information is correct and determines that all payments required to be made to the secretary of state pursuant to the provisions of Subsection B of this section have been made, the secretary of state shall:
(1) cancel the statement of administrative dissolution and prepare a statement of reinstatement that states the secretary of state's determination and the effective date of reinstatement; and
(2) file the statement of reinstatement and serve a copy on the limited liability company.
D. When reinstatement pursuant to the provisions of this section is effective:
(1) the reinstatement relates back to and takes effect as of the effective date of the administrative dissolution;
(2) the limited liability company resumes carrying on its activities and affairs as if the administrative dissolution had not occurred; and
(3) the rights of a person arising out of an act or omission in reliance on the dissolution before the person knew or had notice of the reinstatement are not affected.
SECTION 710. [NEW MATERIAL] JUDICIAL REVIEW OF DENIAL OF REINSTATEMENT.--
A. If the secretary of state denies a limited liability company's application for reinstatement following administrative dissolution, the secretary of state shall serve the company with a notice in a record that explains the reasons for the denial.
B. A limited liability company may seek judicial review of denial of reinstatement in the district court within thirty days after service of the notice of denial.
ARTICLE 8
ACTIONS BY MEMBERS
SECTION 801. [NEW MATERIAL] DIRECT ACTION BY MEMBER.--
A. Subject to the provisions of Subsection B of this section, a member may maintain a direct action against another member, a manager or the limited liability company to enforce the member's rights and to protect the member's interests, including rights and interests provided in the operating agreement or the Revised Uniform Limited Liability Company Act or arising independently of the membership relationship.
B. A member maintaining a direct action pursuant to the provisions of this section shall plead and prove an actual or threatened injury that is not solely the result of an injury suffered or threatened to be suffered by the limited liability company.
SECTION 802. [NEW MATERIAL] DERIVATIVE ACTION.--A member may maintain a derivative action to enforce a right of a limited liability company if:
A. the member first makes a demand on the other members in a member-managed limited liability company, or the managers of a manager-managed limited liability company, requesting that they cause the company to bring an action to enforce the right, and the managers or other members do not bring the action within a reasonable time; or
B. a demand made pursuant to the provisions of Subsection A of this section would be futile.
SECTION 803. [NEW MATERIAL] PROPER PLAINTIFF.--A derivative action to enforce a right of a limited liability company may be maintained only by a person that is a member at the time the action is commenced and:
A. was a member when the conduct giving rise to the action occurred; or
B. whose status as a member devolved on the person by operation of law or pursuant to the terms of the operating agreement from a person that was a member at the time of the conduct.
SECTION 804. [NEW MATERIAL] PLEADING.--In a derivative action, the complaint shall state with particularity:
A. the date and content of the plaintiff's demand and the response to the demand by the other members or managers; or
B. why the demand should be excused as futile.
SECTION 805. [NEW MATERIAL] SPECIAL LITIGATION COMMITTEE.--
A. If a limited liability company is named as or made a party in a derivative proceeding, the company may appoint a special litigation committee to investigate the claims asserted in the proceeding and determine whether pursuing the action is in the best interests of the company. If the company appoints a special litigation committee, on motion by the committee made in the name of the company, except for good cause shown, the court shall stay discovery for the time reasonably necessary to permit the committee to make its investigation. The provisions of this subsection do not prevent a court from:
(1) enforcing a person's right to information pursuant to the provisions of Section 410 of the Revised Uniform Limited Liability Company Act; or
(2) granting extraordinary relief in the form of a temporary restraining order or preliminary injunction.
B. A special litigation committee shall be composed of one or more disinterested and independent individuals, who may be members.
C. A special litigation committee may be appointed:
(1) in a member-managed limited liability company:
(a) by the affirmative vote or consent of a majority of the members not named as parties in the proceeding; or
(b) if all members are named as parties in the proceeding, by a majority of the members named as defendants; or
(2) in a manager-managed limited liability company:
(a) by a majority of the managers not named as parties in the proceeding; or
(b) if all managers are named as parties in the proceeding, by a majority of the managers named as defendants.
D. After appropriate investigation, a special litigation committee may determine that it is in the best interests of the limited liability company that the proceeding:
(1) continue under the control of the plaintiff;
(2) continue under the control of the committee;
(3) be settled on terms approved by the committee; or
(4) be dismissed.
E. After making a determination pursuant to the provisions of Subsection D of this section, a special litigation committee shall file with the court a statement of its determination and its report supporting its determination and shall serve each party with a copy of the determination and report. The court shall determine whether the members of the committee were disinterested and independent and whether the committee conducted its investigation and made its recommendation in good faith, independently and with reasonable care, with the committee having the burden of proof. If the court finds that the members of the committee were disinterested and independent and that the committee acted in good faith, independently and with reasonable care, the court shall enforce the determination of the committee. Otherwise, the court shall dissolve the stay of discovery entered pursuant to the provisions of Subsection A of this section and allow the action to continue under the control of the plaintiff.
SECTION 806. [NEW MATERIAL] PROCEEDS AND EXPENSES.--
A. Except as otherwise provided in Subsection B of this section:
(1) any proceeds or other benefits of a derivative action, whether by judgment, compromise or settlement, belong to the limited liability company and not to the plaintiff; and
(2) if the plaintiff receives any proceeds, the plaintiff shall remit them immediately to the company.
B. If a derivative action is successful in whole or in part, the court may award the plaintiff reasonable expenses, including reasonable attorney fees and costs, from the recovery of the limited liability company.
C. A derivative action on behalf of a limited liability company shall not be voluntarily dismissed or settled without the court's approval.
ARTICLE 9
FOREIGN LIMITED LIABILITY COMPANIES
SECTION 901. [NEW MATERIAL] GOVERNING LAW.--
A. The law of the jurisdiction of formation of a foreign limited liability company governs:
(1) the internal affairs of the company;
(2) the liability of a member as member and a manager as manager for a debt, an obligation or another liability of the company; and
(3) the liability of a series of the company.
B. A foreign limited liability company is not precluded from registering to do business in New Mexico because of any difference between the law of its jurisdiction of formation and the law of New Mexico.
C. Registration of a foreign limited liability company to do business in New Mexico does not authorize the foreign company to engage in any activities and affairs or exercise any power that a limited liability company may not engage in or exercise in New Mexico.
SECTION 902. [NEW MATERIAL] REGISTRATION TO DO BUSINESS IN NEW MEXICO.--
A. A foreign limited liability company shall not do business in New Mexico until it registers with the secretary of state pursuant to the provisions of Article 9 of the Revised Uniform Limited Liability Company Act.
B. A foreign limited liability company doing business in New Mexico may not maintain an action or proceeding in New Mexico unless it is registered to do business in New Mexico.
C. The failure of a foreign limited liability company to register to do business in New Mexico does not impair the validity of a contract or act of the company or preclude it from defending an action or proceeding in New Mexico.
D. A limitation on the liability of a member or manager of a foreign limited liability company is not waived solely because the company does business in New Mexico without registering to do business in New Mexico.
E. The provisions of Subsections A and B of Section 901 of the Revised Uniform Limited Liability Company Act apply even if a foreign limited liability company fails to register pursuant to the provisions of Article 9 of that act.
SECTION 903. [NEW MATERIAL] FOREIGN REGISTRATION STATEMENT.--To register to do business in New Mexico, a foreign limited liability company shall deliver a foreign registration statement to the secretary of state for filing. The statement shall state:
A. the name of the company and, if the name does not comply with the provisions of Section 112 of the Revised Uniform Limited Liability Company Act, an alternate name adopted pursuant to the provisions of Subsection A of Section 906 of that act;
B. that the company is a foreign limited liability company;
C. the company's jurisdiction of formation;
D. the street and mailing addresses of the company's principal office and, if the law of the company's jurisdiction of formation requires the company to maintain an office in that jurisdiction, the street and mailing addresses of the required office;
E. the name and address of a registered agent for service of process, which agent meets the requirements of Section 53-19-5 NMSA 1978, whose original, signed statement, together with a copy, which may be a photocopy of the original after it was signed or a photocopy that is conformed to the original, to the effect that such person accepts designation as the registered agent of the foreign limited liability company, shall be submitted with the application; and
F. that the secretary of state is appointed the agent of the foreign limited liability company for service of process if no agent has been appointed upon resignation of an already appointed registered agent or, if appointed, the agent's authority has been revoked or the agent cannot be found or served in the exercise of reasonable diligence.
SECTION 904. [NEW MATERIAL] AMENDMENT OF FOREIGN REGISTRATION STATEMENT.--A registered foreign limited liability company shall deliver to the secretary of state for filing an amendment to its foreign registration statement if there is a change in:
A. the name of the company;
B. the company's jurisdiction of formation;
C. an address required by the provisions of Subsection D of Section 903 of the Revised Uniform Limited Liability Company Act; or
D. the name and street and mailing addresses of the company's registered agent in New Mexico.
SECTION 905. [NEW MATERIAL] ACTIVITIES NOT CONSTITUTING DOING BUSINESS.--
A. Activities of a foreign limited liability company that do not constitute doing business in New Mexico pursuant to the provisions of Article 9 of the Revised Uniform Limited Liability Company Act include:
(1) maintaining, defending, mediating, arbitrating or settling an action or proceeding;
(2) carrying on an activity concerning the company's internal affairs, including holding meetings of its members or managers;
(3) maintaining accounts in financial institutions;
(4) maintaining offices or agencies for the transfer, exchange and registration of securities of the company or maintaining trustees or depositories with respect to those securities;
(5) selling through independent contractors;
(6) soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside New Mexico before they become contracts;
(7) creating as borrower or lender or acquiring indebtedness or mortgages or other security interests in real or personal property;
(8) securing or collecting debts or enforcing mortgages or security interests in property securing the debts and holding, protecting or maintaining property;
(9) conducting an isolated transaction that is not in the course of similar transactions;
(10) owning, without more, property;
(11) investing in or acquiring, in transactions outside New Mexico, royalties and other nonoperating mineral interests; executing division orders, contracts of sale and other instruments incidental to the ownership of such nonoperating mineral interests; and, in general, owning, without more, real or personal property;
(12) conducting an isolated transaction that is completed within thirty days and that is not one in the course of repeated transactions of a like nature; and
(13) transacting business in interstate commerce.
B. A person does not do business in New Mexico solely by being a member or manager of a foreign limited liability company that does business in New Mexico.
C. The provisions of this section do not apply in determining the contacts or activities that may subject a foreign limited liability company to service of process, taxation or regulation pursuant to the provisions of laws of New Mexico other than those in the Revised Uniform Limited Liability Company Act.
SECTION 906. [NEW MATERIAL] NONCOMPLYING NAME OF FOREIGN LIMITED LIABILITY COMPANY.--
A. A foreign limited liability company whose name does not comply with the provisions of Section 112 of the Revised Uniform Limited Liability Company Act shall not register to do business in New Mexico until it adopts, for the purpose of doing business in New Mexico, an alternate name that complies with the provisions of that section. After registering to do business in New Mexico with an alternate name, a company shall do business in New Mexico under:
(1) the alternate name; or
(2) the company's name, with the addition of its jurisdiction of formation.
B. If a registered foreign limited liability company changes its name to one that does not comply with the provisions of Section 112 of the Revised Uniform Limited Liability Company Act, it may not do business in New Mexico until it complies with the provisions of Subsection A of this section by amending its registration to adopt an alternate name that complies with the provisions of Section 112 of that act.
SECTION 907. [NEW MATERIAL] WITHDRAWAL DEEMED ON CONVERSION TO DOMESTIC FILING ENTITY OR DOMESTIC LIMITED LIABILITY PARTNERSHIP.--A registered foreign limited liability company that converts to a domestic limited liability partnership or to a domestic entity whose formation requires delivery of a record to the secretary of state for filing is deemed to have withdrawn its registration on the effective date of the conversion.
SECTION 908. [NEW MATERIAL] WITHDRAWAL ON DISSOLUTION OR CONVERSION TO NONFILING ENTITY OTHER THAN LIMITED LIABILITY PARTNERSHIP.--
A. A registered foreign limited liability company that has dissolved and completed winding up or has converted to a domestic or foreign entity whose formation does not require the public filing of a record, other than a limited liability partnership, shall deliver a statement of withdrawal to the secretary of state for filing. The statement shall state, in the case of a company that has:
(1) completed winding up:
(a) its name and jurisdiction of formation; and
(b) that the company surrenders its registration to do business in New Mexico; and
(2) converted:
(a) the name of the converting company and its jurisdiction of formation;
(b) the type of entity to which the company has converted and its jurisdiction of formation;
(c) that the converted entity surrenders the converting company's registration to do business in New Mexico and revokes the authority of the converting company's registered agent to act as registered agent in New Mexico on behalf of the company or the converted entity; and
(d) a mailing address to which service of process may be made pursuant to the provisions of Subsection B of this section.
B. After a withdrawal pursuant to the provisions of this section is effective, service of process in an action or proceeding based on a cause of action arising during the time that the foreign limited liability company was registered to do business in New Mexico may be made pursuant to the provisions of Section 116 of the Revised Uniform Limited Liability Company Act.
SECTION 909. [NEW MATERIAL] TRANSFER OF REGISTRATION.--
A. When a registered foreign limited liability company has merged into a foreign entity that is not registered to do business in New Mexico or has converted to a foreign entity required to register with the secretary of state to do business in New Mexico, the foreign entity shall deliver to the secretary of state for filing an application for transfer of registration. The application shall state:
(1) the name of the registered foreign limited liability company before the merger or conversion;
(2) that, before the merger or conversion, the registration pertained to a foreign limited liability company;
(3) the name of the applicant foreign entity into which the foreign limited liability company has merged or to which it has been converted and, if the name does not comply with the provisions of Section 112 of the Revised Uniform Limited Liability Company Act, an alternate name adopted pursuant to Subsection A of Section 906 of that act;
(4) the type of entity of the applicant foreign entity and its jurisdiction of formation;
(5) the street and mailing addresses of the principal office of the applicant foreign entity and, if the law of the entity's jurisdiction of formation requires the entity to maintain an office in that jurisdiction, the street and mailing addresses of that office; and
(6) the name and street and mailing addresses of the applicant foreign entity's registered agent in New Mexico.
B. When an application for transfer of registration takes effect, the registration of the foreign limited liability company to do business in New Mexico is transferred without interruption to the foreign entity into which the company has merged or to which it has been converted.
SECTION 910. [NEW MATERIAL] TERMINATION OF REGISTRATION.--
A. The secretary of state may terminate the registration of a registered foreign limited liability company in the manner provided in Subsections B and C of this section if the company does not:
(1) pay, within sixty days after the due date, any fee, tax, interest or penalty required to be paid to the secretary of state pursuant to the provisions of the Revised Uniform Limited Liability Company Act or a law other than one in that act;
(2) deliver to the secretary of state for filing, within sixty days after the due date, a triennial report required by the provisions of Section 212 of that act;
(3) have a registered agent as required by the provisions of Section 115 of that act; or
(4) deliver to the secretary of state for filing a statement of a change pursuant to the provisions of Section 115 of that act within thirty days after a change has occurred in the name or address of the registered agent.
B. The secretary of state may terminate the registration of a registered foreign limited liability company by:
(1) filing a notice of termination or noting the termination in the records of the secretary of state; and
(2) delivering a copy of the notice or the information in the notation to the company's registered agent or, if the company does not have a registered agent, to the company's principal office.
C. The notice shall state, or the information in the notation shall include:
(1) the effective date of the termination, which shall be at least sixty days after the date that the secretary of state delivers the copy; and
(2) the grounds for termination pursuant to the provisions of Subsection A of this section.
D. The authority of a registered foreign limited liability company to do business in New Mexico ceases on the effective date of the notice of termination or notation pursuant to the provisions of Subsection B of this section, unless before that date the company cures each ground for termination stated in the notice or notation. If the company cures each ground, the secretary of state shall file a record so stating.
SECTION 911. [NEW MATERIAL] WITHDRAWAL OF REGISTRATION OF REGISTERED FOREIGN LIMITED LIABILITY COMPANY.--
A. A registered foreign limited liability company may withdraw its registration by delivering a statement of withdrawal to the secretary of state for filing. The statement of withdrawal must state:
(1) the name of the company and its jurisdiction of formation;
(2) that the company is not doing business in New Mexico and that it withdraws its registration to do business in New Mexico;
(3) that the company revokes the authority of its registered agent to accept service on its behalf in New Mexico; and
(4) an address to which service of process may be made pursuant to the provisions of Subsection B of this section.
B. After the withdrawal of the registration of a foreign limited liability company, service of process in any action or proceeding based on a cause of action arising during the time that the company was registered to do business in New Mexico may be made pursuant to the provisions of Section 116 of the Revised Uniform Limited Liability Company Act.
SECTION 912. [NEW MATERIAL] ACTION BY ATTORNEY GENERAL.--The attorney general may maintain an action to enjoin a foreign limited liability company from doing business in New Mexico in violation of the provisions of Article 9 of the Revised Uniform Limited Liability Company Act.
ARTICLE 10
MERGER, INTEREST EXCHANGE, CONVERSION AND DOMESTICATION
SECTION 1001. [NEW MATERIAL] DEFINITIONS.--As used in Article 10 of the Revised Uniform Limited Liability Company Act:
A. "acquired entity" means the entity, all of one or more classes or series of interests of which are acquired in an interest exchange;
B. "acquiring entity" means the entity that acquires all of one or more classes or series of interests of the acquired entity in an interest exchange;
C. "conversion" means a transaction authorized pursuant to the provisions of Sections 1019 through 1024 of the Revised Uniform Limited Liability Company Act;
D. "converted entity" means the converting entity as it continues in existence after a conversion;
E. "converting entity" means the domestic entity that approves a plan of conversion pursuant to the provisions of Section 1021 of the Revised Uniform Limited Liability Company Act or the foreign entity that approves a conversion pursuant to the laws of its jurisdiction of formation;
F. "distributional interest" means the right provided in an unincorporated entity's organic law and organic rules to receive distributions from the entity;
G. "domestic", with respect to an entity, means governed as to the entity's internal affairs by the laws of New Mexico;
H. "domesticated limited liability company" means the domesticating limited liability company as it continues in existence after a domestication;
I. "domesticating limited liability company" means the domestic limited liability company that approves a plan of domestication pursuant to the provisions of Section 1027 of the Revised Uniform Limited Liability Company Act or the foreign limited liability company that approves a domestication pursuant to the laws of its jurisdiction of formation;
J. "domestication" means a transaction authorized in Sections 1025 through 1030 of the Revised Uniform Limited Liability Company Act;
K. "entity":
(1) means:
(a) a business corporation;
(b) a nonprofit corporation;
(c) a general partnership, including a limited liability partnership;
(d) a limited partnership, including a limited liability limited partnership;
(e) a limited liability company;
(f) a general cooperative association;
(g) an unincorporated nonprofit association;
(h) a statutory trust, business trust or common-law business trust; or
(i) another person that has: 1) a legal existence separate from any interest holder of that person; or 2) the power to acquire an interest in real property in its own name; but
(2) does not include:
(a) an individual;
(b) a trust with a predominantly donative purpose or a charitable trust;
(c) an association or relationship that is not an entity listed in Paragraph (1) of this subsection and is not a partnership pursuant to the rules stated in Section 202(c) of the Uniform Partnership Act (1997) (Last Amended 2013), Section 7 of the Uniform Partnership Act (1914) or a similar provision of the laws of another jurisdiction;
(d) a decedent's estate; or
(e) a government or a governmental subdivision, agency or instrumentality;
L. "filing entity" means an entity whose formation requires the filing of a public organic record. "Filing entity" does not include a limited liability partnership;
M. "foreign", with respect to an entity, means an entity governed as to its internal affairs by the laws of a jurisdiction other than New Mexico;
N. "governance interest" means a right provided in the organic law or organic rules of an unincorporated entity, other than as a governor, an agent, an assignee or a proxy, to:
(1) receive or demand access to information concerning, or the books and records of, the entity;
(2) vote for or consent to the election of the governors of the entity; or
(3) receive notice of or vote on or consent to an issue involving the internal affairs of the entity;
O. "governor" means:
(1) a director of a business corporation;
(2) a director or trustee of a nonprofit corporation;
(3) a general partner of a general partnership;
(4) a general partner of a limited partnership;
(5) a manager of a manager-managed limited liability company;
(6) a member of a member-managed limited liability company;
(7) a director of a general cooperative association;
(8) a manager of an unincorporated nonprofit association;
(9) a trustee of a statutory trust, business trust or common-law business trust; or
(10) another person under whose authority the powers of an entity are exercised and under whose direction the activities and affairs of the entity are managed pursuant to the organic law and organic rules of the entity;
P. "interest" means a:
(1) share in a business corporation;
(2) membership in a nonprofit corporation;
(3) partnership interest in a general partnership;
(4) partnership interest in a limited partnership;
(5) membership interest in a limited liability company;
(6) share in a general cooperative association;
(7) membership in an unincorporated nonprofit association;
(8) beneficial interest in a statutory trust, business trust or common-law business trust; or
(9) governance interest or distributional interest in another type of unincorporated entity;
Q. "interest exchange" means a transaction authorized in Sections 1013 through 1018 of the Revised Uniform Limited Liability Company Act;
R. "interest holder" means:
(1) a shareholder of a business corporation;
(2) a member of a nonprofit corporation;
(3) a general partner of a general partnership;
(4) a general partner of a limited partnership;
(5) a limited partner of a limited partnership;
(6) a member of a limited liability company;
(7) a shareholder of a general cooperative association;
(8) a member of an unincorporated nonprofit association;
(9) a beneficiary or beneficial owner of a statutory trust, business trust or common-law business trust; or
(10) any other direct holder of an interest;
S. "interest holder liability" means:
(1) personal liability for a liability of an entity that is imposed on a person:
(a) solely by reason of the status of the person as an interest holder; or
(b) by the organic rules of the entity that make one or more specified interest holders or categories of interest holders liable in their capacity as interest holders for all or specified liabilities of the entity; or
(2) an obligation of an interest holder provided in the organic rules of an entity to contribute to the entity;
T. "merger" means a transaction authorized in Sections 1007 through 1012 of the Revised Uniform Limited Liability Company Act;
U. "merging entity" means an entity that is a party to a merger and exists immediately before the merger becomes effective;
V. "organic law" means the laws of an entity's jurisdiction of formation governing the internal affairs of the entity;
W. "organic rules" means the public organic record and private organic rules of an entity;
X. "plan" means a plan of merger, a plan of interest exchange, a plan of conversion or a plan of domestication;
Y. "plan of conversion" means a plan that conforms to the provisions of Section 1020 of the Revised Uniform Limited Liability Company Act;
Z. "plan of domestication" means a plan pursuant to the provisions of Section 1026 of the Revised Uniform Limited Liability Company Act;
AA. "plan of interest exchange" means a plan that conforms to the provisions of Section 1014 of the Revised Uniform Limited Liability Company Act;
BB. "plan of merger" means a plan that conforms to the provisions of Section 1008 of the Revised Uniform Limited Liability Company Act;
CC. "private organic rules" means the rules, regardless of whether in a record, that govern the internal affairs of an entity, are binding on all of its interest holders and are not part of its public organic record, if any. "Private organic rules" includes the:
(1) bylaws of a business corporation;
(2) bylaws of a nonprofit corporation;
(3) partnership agreement of a general partnership;
(4) partnership agreement of a limited partnership;
(5) operating agreement of a limited liability company;
(6) bylaws of a general cooperative association;
(7) governing principles of an unincorporated nonprofit association; and
(8) trust instrument of a statutory trust or similar rules of a business trust or common-law business trust;
DD. "protected agreement" means:
(1) a record evidencing indebtedness and any related agreement in effect on July 1, 2016;
(2) an agreement that is binding on an entity on that date;
(3) the organic rules of an entity in effect on that date; or
(4) an agreement that is binding on any of the governors or interest holders of an entity on that date;
EE. "public organic record" means the record the filing of which by the secretary of state is required to form an entity and any amendment to or restatement of that record. "Public organic record" includes the:
(1) articles of incorporation of a business corporation;
(2) articles of incorporation of a nonprofit corporation;
(3) certificate of limited partnership of a limited partnership;
(4) certificate of organization of a limited liability company;
(5) articles of incorporation of a general cooperative association; and
(6) certificate of trust of a statutory trust or similar record of a business trust;
FF. "registered foreign entity" means a foreign entity that is registered to do business in New Mexico pursuant to a record filed by the secretary of state;
GG. "statement of conversion" means a statement provided in Section 1023 of the Revised Uniform Limited Liability Company Act;
HH. "statement of domestication" means a statement provided in Section 1029 of the Revised Uniform Limited Liability Company Act;
II. "statement of interest exchange" means a statement provided in Section 1017 of the Revised Uniform Limited Liability Company Act;
JJ. "statement of merger" means a statement provided in Section 1011 of the Revised Uniform Limited Liability Company Act;
KK. "surviving entity" means the entity that continues in existence after or is created by a merger; and
LL. "type of entity" means a generic form of entity:
(1) recognized at common law; or
(2) formed pursuant to the provisions of an organic law, regardless of whether some entities formed pursuant to the provisions of that organic law are subject to provisions of that law that create different categories of the form of entity.
SECTION 1002. [NEW MATERIAL] RELATIONSHIP OF ARTICLE 10 OF THE REVISED UNIFORM LIMITED LIABILITY COMPANY ACT TO OTHER LAWS.--
A. The provisions of Article 10 of the Revised Uniform Limited Liability Company Act do not authorize an act prohibited by, and do not affect the application or requirements of, a law other than one in that article.
B. A transaction effected pursuant to the provisions of Article 10 of the Revised Uniform Limited Liability Company Act shall not create or impair a right, a duty or an obligation of a person pursuant to the provisions of a statutory law of New Mexico other than one in that article relating to a change in control, takeover, business combination, control-share acquisition or similar transaction involving a domestic merging, acquired, converting or domesticating business corporation unless, if the corporation:
(1) does not survive the transaction, the transaction satisfies any requirements of the law; or
(2) survives the transaction, the approval of the plan is by a vote of the shareholders or directors that would be sufficient to create or impair the right, duty or obligation directly pursuant to the provisions of the law.
SECTION 1003. [NEW MATERIAL] REQUIRED NOTICE OR APPROVAL.--
A. A domestic or foreign entity that is required to give notice to, or obtain the approval of, a governmental agency or officer of New Mexico to be a party to a merger shall give the notice or obtain the approval to be a party to an interest exchange, conversion or domestication.
B. Property held for a charitable purpose pursuant to the provisions of the laws of New Mexico by a domestic or foreign entity immediately before a transaction provided in Article 10 of the Revised Uniform Limited Liability Company Act becomes effective shall not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised or otherwise transferred unless, to the extent required by or pursuant to the laws of New Mexico concerning cy-pres or other law dealing with non-diversion of charitable assets, the entity obtains an appropriate order of the district court specifying the disposition of the property. The attorney general shall be given notice and an opportunity to be heard.
C. A bequest, devise, gift, grant or promise contained in a will or other instrument of donation, subscription or conveyance that is made to a merging entity that is not the surviving entity and that takes effect or remains payable after the merger inures to the surviving entity.
D. A trust obligation that would govern property if transferred to a non-surviving entity applies to property that is transferred to the surviving entity pursuant to the provisions of this section.
SECTION 1004. [NEW MATERIAL] NONEXCLUSIVITY.--The fact that a transaction effected pursuant to the provisions of Article 10 of the Revised Uniform Limited Liability Company Act produces a certain result does not preclude the same result from being accomplished in another manner permitted by a law other than one in that article.
SECTION 1005. [NEW MATERIAL] REFERENCE TO EXTERNAL FACTS.--A plan may refer to facts ascertainable outside the plan if the manner in which the facts will operate upon the plan is specified in the plan. The facts may include the occurrence of an event or a determination or action by a person, regardless of whether the event, determination or action is within the control of a party to the transaction.
SECTION 1006. [NEW MATERIAL] APPRAISAL RIGHTS.--An interest holder of a domestic merging, acquired, converting or domesticating limited liability company is entitled to contractual appraisal rights in connection with a transaction provided in Article 10 of the Revised Uniform Limited Liability Company Act to the extent provided in the operating agreement or the plan.
SECTION 1007. [NEW MATERIAL] MERGER AUTHORIZED.--
A. By complying with the provisions of Sections 1007 through 1012 of the Revised Uniform Limited Liability Company Act:
(1) one or more domestic limited liability companies may merge with one or more domestic or foreign entities into a domestic or foreign surviving entity; and
(2) two or more foreign entities may merge into a domestic limited liability company.
B. By complying with the provisions of Sections 1007 through 1012 of the Revised Uniform Limited Liability Company Act applicable to foreign entities, a foreign entity may be a party to a merger pursuant to the provisions of those sections or may be the surviving entity in such a merger if the merger is authorized by the laws of the foreign entity's jurisdiction of formation.
SECTION 1008. [NEW MATERIAL] PLAN OF MERGER.--
A. A domestic limited liability company may become a party to a merger pursuant to the provisions of Sections 1007 through 1012 of the Revised Uniform Limited Liability Company Act by approving a plan of merger. The plan shall be in a record and contain:
(1) as to each merging entity, its name, jurisdiction of formation and type of entity;
(2) if the surviving entity is to be created in the merger, a statement to that effect and the entity's name, jurisdiction of formation and type of entity;
(3) the manner of converting the interests in each party to the merger into interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing;
(4) if the surviving entity exists before the merger, any proposed amendments to its:
(a) public organic record, if any; and
(b) private organic rules that are, or are proposed to be, in a record;
(5) if the surviving entity is to be created in the merger:
(a) its proposed public organic record, if any; and
(b) the full text of its private organic rules that are proposed to be in a record;
(6) the other terms and conditions of the merger; and
(7) any other provision required by the laws of a merging entity's jurisdiction of formation or the organic rules of a merging entity.
B. In addition to the requirements in Subsection A of this section, a plan of merger may contain any other provision not prohibited by law.
SECTION 1009. [NEW MATERIAL] APPROVAL OF MERGER.--
A. A plan of merger is not effective unless it has been approved:
(1) by a domestic merging limited liability company, by all of the members of the company who are entitled to vote on or consent to any matter; and
(2) in a record, by each member of a domestic merging limited liability company that will have interest holder liability for debts, obligations and other liabilities that arise after the merger becomes effective, unless:
(a) the operating agreement of the company provides in a record for the approval of a merger in which some or all of its members become subject to interest holder liability by the affirmative vote or consent of fewer than all of the members; and
(b) the member consented in a record to or voted for that provision of the operating agreement or became a member after the adoption of that provision.
B. A merger involving a domestic merging entity that is not a limited liability company is not effective unless the merger is approved by that entity in accordance with the provisions of its organic law.
C. A merger involving a foreign merging entity is not effective unless the merger is approved by the foreign entity in accordance with the laws of the foreign entity's jurisdiction of formation.
SECTION 1010. [NEW MATERIAL] AMENDMENT OR ABANDONMENT OF PLAN OF MERGER.--
A. A plan of merger may be amended only with the consent of each party to the plan, except as otherwise provided in the plan.
B. A domestic merging limited liability company may approve an amendment of a plan of merger:
(1) in the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended; or
(2) by the company's managers or members in the manner provided in the plan. However, a member that was entitled to vote on or consent to approval of the merger may vote on or consent to any amendment of the plan that will change:
(a) the amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing, to be received by the interest holders of any party to the plan;
(b) the public organic record, if any, or private organic rules of the surviving entity that will be in effect immediately after the merger becomes effective, except for changes that do not require approval of the interest holders of the surviving entity pursuant to the provisions of its organic law or organic rules; or
(c) any other term or condition of the plan, if the change would adversely affect the member in any material respect.
C. After a plan of merger has been approved and before a statement of merger becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic merging limited liability company may abandon the plan in the same manner as the plan was approved.
D. If a plan of merger is abandoned after a statement of merger has been delivered to the secretary of state for filing and before the statement becomes effective, a statement of abandonment, signed by a party to the plan, shall be delivered to the secretary of state for filing before the statement of merger becomes effective. The statement of abandonment takes effect on filing, and the merger is abandoned and does not become effective. The statement of abandonment shall contain:
(1) the name of each party to the plan of merger;
(2) the date on which the statement of merger was filed by the secretary of state; and
(3) a statement that the merger has been abandoned in accordance with the provisions of this section.
SECTION 1011. [NEW MATERIAL] STATEMENT OF MERGER--EFFECTIVE DATE OF MERGER.--
A. A statement of merger shall be signed by each merging entity and delivered to the secretary of state for filing.
B. A statement of merger shall contain:
(1) the name, jurisdiction of formation and type of entity of each merging entity that is not the surviving entity;
(2) the name, jurisdiction of formation and type of entity of the surviving entity;
(3) a statement that the merger was approved by each domestic merging entity, if any, in accordance with the provisions of Sections 1007 through 1012 of the Revised Uniform Limited Liability Company Act and by each foreign merging entity, if any, in accordance with the laws of its jurisdiction of formation;
(4) if the surviving entity exists before the merger and is a domestic filing entity, any amendment to its public organic record approved as part of the plan of merger;
(5) if the surviving entity is created by the merger and is a domestic filing entity, its public organic record, as an attachment;
(6) if the surviving entity is created by the merger and is a domestic limited liability partnership, its statement of qualification, as an attachment; and
(7) if the surviving entity is a foreign entity that is not a registered foreign entity, a mailing address to which the secretary of state may send any process served on the secretary of state pursuant to the provisions of Subsection E of Section 1012 of the Revised Uniform Limited Liability Company Act.
C. In addition to the requirements stated in Subsection B of this section, a statement of merger may contain any other provision not prohibited by law.
D. If the surviving entity is a domestic entity, its public organic record, if any, must satisfy the requirements of the laws of New Mexico, except that the public organic record does not need to be signed.
E. A plan of merger that is signed by all of the merging entities and that meets all of the requirements in Subsection B of this section may be delivered to the secretary of state for filing instead of a statement of merger and on filing has the same effect. If a plan of merger is filed as provided in this subsection, references in Article 10 of the Revised Uniform Limited Liability Company Act to a statement of merger refer to the plan of merger filed pursuant to the provisions of this subsection.
F. If the surviving entity is a domestic limited liability company, the merger is effective when the statement of merger is effective. In all other cases, the merger is effective on the later of:
(1) the date and time provided by the organic law of the surviving entity; or
(2) when the statement is effective.
SECTION 1012. [NEW MATERIAL] EFFECT OF MERGER.--
A. When a merger becomes effective:
(1) the surviving entity continues or comes into existence;
(2) each merging entity that is not the surviving entity ceases to exist;
(3) all property of each merging entity vests in the surviving entity without transfer, reversion or impairment;
(4) all debts, obligations and other liabilities of each merging entity are debts, obligations and other liabilities of the surviving entity;
(5) except as otherwise provided by law or the plan of merger, all of the rights, privileges, immunities, powers and purposes of each merging entity vest in the surviving entity;
(6) if the surviving entity exists before the merger:
(a) all of its property continues to be vested in it without transfer, reversion or impairment;
(b) it remains subject to all its debts, obligations and other liabilities; and
(c) all of its rights, privileges, immunities, powers and purposes continue to be vested in it;
(7) the name of the surviving entity may be substituted for the name of any merging entity that is a party to any pending action or proceeding;
(8) if the surviving entity exists before the merger, its:
(a) public organic record, if any, is amended to the extent provided in the statement of merger; and
(b) private organic rules that are to be in a record, if any, are amended to the extent provided in the plan of merger;
(9) if the surviving entity is created by the merger, its private organic rules are effective, and if it is a:
(a) filing entity, its public organic record is effective; and
(b) limited liability partnership, its statement of qualification is effective; and
(10) the interests in each merging entity that are to be converted in the merger are converted, and the interest holders of those interests are entitled only to the rights provided to them pursuant to the plan of merger and to any appraisal rights that they have pursuant to the provisions of Section 1006 of the Revised Uniform Limited Liability Company Act and the merging entity's organic law.
B. Except as otherwise provided in the organic law or organic rules of a merging entity, the merger does not give rise to any rights that an interest holder, a governor or a third party would have upon a dissolution, liquidation or winding up of the merging entity.
C. When a merger becomes effective, a person that did not have interest holder liability with respect to any of the merging entities and that becomes subject to interest holder liability with respect to a domestic entity as a result of the merger has interest holder liability only to the extent provided by the organic law of that entity and only for those debts, obligations and other liabilities that arise after the merger becomes effective.
D. When a merger becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic merging limited liability company with respect to which the person had interest holder liability is subject to the following rules:
(1) the merger does not discharge any interest holder liability pursuant to the provisions of the Revised Uniform Limited Liability Company Act to the extent that the interest holder liability arose before the merger became effective;
(2) the person does not have interest holder liability pursuant to the provisions of that act for any debt, obligation or other liability that arises after the merger becomes effective;
(3) the provisions of that act continue to apply to the release, collection or discharge of any interest holder liability preserved pursuant to the provisions of Paragraph (1) of this subsection as if the merger had not occurred; and
(4) the person has whatever rights of contribution from any other person as provided by that act, a law other than one in that act or the operating agreement of the domestic merging limited liability company with respect to any interest holder liability preserved pursuant to the provisions of Paragraph (1) of this subsection as if the merger had not occurred.
E. When a merger becomes effective, a foreign entity that is the surviving entity may be served with process in New Mexico for the collection and enforcement of any debts, obligations or other liabilities of a domestic merging limited liability company as provided in Section 116 of the Revised Uniform Limited Liability Company Act.
F. When a merger becomes effective, the registration to do business in New Mexico of any foreign merging entity that is not the surviving entity is canceled.
SECTION 1013. [NEW MATERIAL] INTEREST EXCHANGE AUTHORIZED.--
A. By complying with the provisions of Sections 1013 through 1018 of the Revised Uniform Limited Liability Company Act:
(1) a domestic limited liability company may acquire all of one or more classes or series of interests of another domestic entity or a foreign entity in exchange for interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing; or
(2) all of one or more classes or series of interests of a domestic limited liability company may be acquired by another domestic entity or a foreign entity in exchange for interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing.
B. By complying with the provisions of Sections 1013 through 1018 of the Revised Uniform Limited Liability Company Act applicable to foreign entities, a foreign entity may be the acquiring or acquired entity in an interest exchange pursuant to the provisions of Sections 1013 through 1018 of that act if the interest exchange is authorized by the laws of the foreign entity's jurisdiction of formation.
C. If a protected agreement contains a provision that applies to a merger of a domestic limited liability company but does not refer to an interest exchange, the provision applies to an interest exchange in which the domestic limited liability company is the acquired entity as if the interest exchange were a merger until the provision is amended after July 1, 2016.
SECTION 1014. [NEW MATERIAL] PLAN OF INTEREST EXCHANGE.--
A. A domestic limited liability company may be the acquired entity in an interest exchange pursuant to the provisions of Sections 1013 through 1018 of the Revised Uniform Limited Liability Company Act by approving a plan of interest exchange. The plan shall be in a record and shall contain:
(1) the name of the acquired entity;
(2) the name, jurisdiction of formation and type of entity of the acquiring entity;
(3) the manner of converting the interests in the acquired entity into interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing;
(4) any proposed amendments to the:
(a) certificate of organization of the acquired entity; and
(b) operating agreement of the acquired entity that are, or are proposed to be, in a record;
(5) the other terms and conditions of the interest exchange; and
(6) any other provision required by the laws of New Mexico or the operating agreement of the acquired entity.
B. In addition to the requirements in Subsection A of this section, a plan of interest exchange may contain any other provision not prohibited by law.
SECTION 1015. [NEW MATERIAL] APPROVAL OF INTEREST EXCHANGE.--
A. A plan of interest exchange is not effective unless it has been approved:
(1) by all of the members of a domestic acquired limited liability company entitled to vote on or consent to any matter; and
(2) in a record, by each member of the domestic acquired limited liability company that will have interest holder liability for debts, obligations and other liabilities that arise after the interest exchange becomes effective, unless:
(a) the operating agreement of the company provides in a record for the approval of an interest exchange or a merger in which some or all of its members become subject to interest holder liability by the affirmative vote or consent of fewer than all of the members; and
(b) the member consented in a record to or voted for that provision of the operating agreement or became a member after the adoption of that provision.
B. An interest exchange involving a domestic acquired entity that is not a limited liability company is not effective unless it is approved by the domestic entity in accordance with its organic law.
C. An interest exchange involving a foreign acquired entity is not effective unless it is approved by the foreign entity in accordance with the laws of the foreign entity's jurisdiction of formation.
D. Except as otherwise provided in its organic law or organic rules, the interest holders of the acquiring entity are not required to approve the interest exchange.
SECTION 1016. [NEW MATERIAL] AMENDMENT OR ABANDONMENT OF PLAN OF INTEREST EXCHANGE.--
A. A plan of interest exchange may be amended only with the consent of each party to the plan, except as otherwise provided in the plan.
B. A domestic acquired limited liability company may approve an amendment of a plan of interest exchange:
(1) in the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended; or
(2) by its managers or members in the manner provided in the plan. However, a member that was entitled to vote on or consent to approval of the interest exchange is entitled to vote on or consent to any amendment of the plan that will change:
(a) the amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing, to be received by any of the members of the acquired company pursuant to the plan;
(b) the certificate of organization or operating agreement of the acquired company that will be in effect immediately after the interest exchange becomes effective, except for changes that do not require approval of the members of the acquired company pursuant to the provisions of the Revised Uniform Limited Liability Company Act or the operating agreement; or
(c) any other terms or conditions of the plan, if the change would adversely affect the member in any material respect.
C. After a plan of interest exchange has been approved and before a statement of interest exchange becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic acquired limited liability company may abandon the plan in the same manner the plan was approved.
D. If a plan of interest exchange is abandoned after a statement of interest exchange has been delivered to the secretary of state for filing and before the statement becomes effective, a statement of abandonment, signed by the acquired limited liability company, shall be delivered to the secretary of state for filing before the statement of interest exchange becomes effective. The statement of abandonment takes effect on filing, and the interest exchange is abandoned and does not become effective. The statement of abandonment shall contain:
(1) the name of the acquired company;
(2) the date on which the statement of interest exchange was filed by the secretary of state; and
(3) a statement that the interest exchange has been abandoned in accordance with the provisions of this section.
SECTION 1017. [NEW MATERIAL] STATEMENT OF INTEREST EXCHANGE--EFFECTIVE DATE OF INTEREST EXCHANGE.--
A. A statement of interest exchange shall be signed by a domestic acquired limited liability company and delivered to the secretary of state for filing.
B. A statement of interest exchange shall contain:
(1) the name of the acquired limited liability company;
(2) the name, jurisdiction of formation and type of entity of the acquiring entity;
(3) a statement that the plan of interest exchange was approved by the acquired company in accordance with Sections 1013 through 1018 of the Revised Uniform Limited Liability Company Act; and
(4) any amendments to the company's certificate of organization approved as part of the plan of interest exchange.
C. In addition to the requirements in Subsection B of this section, a statement of interest exchange may contain any other provision not prohibited by law.
D. A plan of interest exchange that is signed by a domestic acquired limited liability company and that meets all of the requirements in Subsection B of this section may be delivered to the secretary of state for filing instead of a statement of interest exchange and on filing has the same effect. If a plan of interest exchange is filed as provided in this subsection, references in Article 10 of the Revised Uniform Limited Liability Company Act to a statement of interest exchange refer to the plan of interest exchange filed pursuant to the provisions of this subsection.
E. An interest exchange is effective when the statement of interest exchange is effective.
SECTION 1018. [NEW MATERIAL] EFFECT OF INTEREST EXCHANGE.--
A. When an interest exchange in which the acquired entity is a domestic limited liability company becomes effective, the:
(1) interests in the acquired company that are the subject of the interest exchange are converted, and the members holding those interests are entitled only to the rights provided to them by the plan of interest exchange and to any appraisal rights that they have pursuant to the provisions of Section 1006 of the Revised Uniform Limited Liability Company Act;
(2) acquiring entity becomes the interest holder of the interests in the acquired company stated in the plan of interest exchange to be acquired by the acquiring entity;
(3) certificate of organization of the acquired company is amended to the extent provided in the statement of interest exchange; and
(4) provisions of the operating agreement of the acquired company that are to be in a record, if any, are amended to the extent provided in the plan of interest exchange.
B. Except as otherwise provided in the operating agreement of a domestic acquired limited liability company, the interest exchange does not give rise to any rights that a member, manager or third party would have upon a dissolution, liquidation or winding up of the acquired company.
C. When an interest exchange becomes effective, a person that did not have interest holder liability with respect to a domestic acquired limited liability company and that becomes subject to interest holder liability with respect to a domestic entity as a result of the interest exchange has interest holder liability only to the extent provided by the organic law of the entity and only for those debts, obligations and other liabilities that arise after the interest exchange becomes effective.
D. When an interest exchange becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic acquired limited liability company with respect to which the person had interest holder liability is subject to the following rules:
(1) the interest exchange does not discharge any interest holder liability pursuant to the provisions of the Revised Uniform Limited Liability Company Act to the extent that the interest holder liability arose before the interest exchange became effective;
(2) the person does not have interest holder liability pursuant to the provisions of that act for any debt, obligation or other liability that arises after the interest exchange becomes effective;
(3) the provisions of that act continue to apply to the release, collection or discharge of any interest holder liability preserved pursuant to the provisions of Paragraph (1) of this subsection as if the interest exchange had not occurred; and
(4) the person has whatever rights of contribution from any other person as are provided by that act, a law other than one in that act or the operating agreement of the acquired company with respect to any interest holder liability preserved pursuant to the provisions of Paragraph (1) of this subsection as if the interest exchange had not occurred.
SECTION 1019. [NEW MATERIAL] CONVERSION AUTHORIZED.--
A. By complying with the provisions of Sections 1019 through 1024 of the Revised Uniform Limited Liability Company Act, a domestic limited liability company may become a:
(1) domestic entity that is a different type of entity; or
(2) foreign entity that is a different type of entity, if the conversion is authorized by the laws of the foreign entity's jurisdiction of formation.
B. By complying with the provisions of Sections 1019 through 1024 of the Revised Uniform Limited Liability Company Act applicable to foreign entities, a foreign entity that is not a foreign limited liability company may become a domestic limited liability company if the conversion is authorized by the laws of the foreign entity's jurisdiction of formation.
C. If a protected agreement contains a provision that applies to a merger of a domestic limited liability company but does not refer to a conversion, the provision applies to a conversion of the company as if the conversion were a merger until the provision is amended after July 1, 2016.
SECTION 1020. [NEW MATERIAL] PLAN OF CONVERSION.--
A. A domestic limited liability company may convert to a different type of entity pursuant to the provisions of Sections 1019 through 1024 of the Revised Uniform Limited Liability Company Act by approving a plan of conversion. The plan shall be in a record and contain:
(1) the name of the converting limited liability company;
(2) the name, jurisdiction of formation and type of entity of the converted entity;
(3) the manner of converting the interests in the converting limited liability company into interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing;
(4) the proposed public organic record of the converted entity if it will be a filing entity;
(5) the full text of the private organic rules of the converted entity that are proposed to be in a record;
(6) the other terms and conditions of the conversion; and
(7) any other provision required by the laws of New Mexico or the operating agreement of the converting limited liability company.
B. In addition to the requirements in Subsection A of this section, a plan of conversion may contain any other provision not prohibited by law.
SECTION 1021. [NEW MATERIAL] APPROVAL OF CONVERSION.--
A. A plan of conversion is not effective unless it has been approved:
(1) by a domestic converting limited liability company, by all of the members of the limited liability company entitled to vote on or consent to any matter; and
(2) in a record, by each member of a domestic converting limited liability company that will have interest holder liability for debts, obligations and other liabilities that arise after the conversion becomes effective, unless:
(a) the operating agreement of the company provides in a record for the approval of a conversion or a merger in which some or all of its members become subject to interest holder liability by the affirmative vote or consent of fewer than all of the members; and
(b) the member voted for or consented in a record to that provision of the operating agreement or became a member after the adoption of that provision.
B. A conversion involving a domestic converting entity that is not a limited liability company is not effective unless it is approved by the domestic converting entity in accordance with its organic law.
C. A conversion of a foreign converting entity is not effective unless it is approved by the foreign entity in accordance with the laws of the foreign entity's jurisdiction of formation.
SECTION 1022. [NEW MATERIAL] AMENDMENT OR ABANDONMENT OF PLAN OF CONVERSION.--
A. A plan of conversion of a domestic converting limited liability company may be amended:
(1) in the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended; or
(2) by its managers or members in the manner provided in the plan, but a member that was entitled to vote on or consent to approval of the conversion is entitled to vote on or consent to any amendment of the plan that will change:
(a) the amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing, to be received by any of the members of the converting company pursuant to the plan;
(b) the public organic record, if any, or private organic rules of the converted entity that will be in effect immediately after the conversion becomes effective, except for changes that do not require the approval of the interest holders of the converted entity pursuant to the provisions of its organic law or organic rules; or
(c) any other terms or conditions of the plan, if the change would adversely and materially affect the member.
B. After a plan of conversion has been approved by a domestic converting limited liability company and before a statement of conversion becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic converting limited liability company may abandon the plan in the same manner as the plan was approved.
C. If a plan of conversion is abandoned after a statement of conversion has been delivered to the secretary of state for filing and before the statement becomes effective, a statement of abandonment, signed by the converting entity, shall be delivered to the secretary of state for filing before the statement of conversion becomes effective. The statement of abandonment takes effect on filing, and the conversion is abandoned and does not become effective. The statement of abandonment shall contain:
(1) the name of the converting limited liability company;
(2) the date on which the statement of conversion was filed by the secretary of state; and
(3) a statement that the conversion has been abandoned in accordance with the provisions of this section.
SECTION 1023. [NEW MATERIAL] STATEMENT OF CONVERSION--EFFECTIVE DATE OF CONVERSION.--
A. A statement of conversion shall be signed by the converting entity and delivered to the secretary of state for filing.
B. A statement of conversion shall contain:
(1) the name, jurisdiction of formation and type of entity of the converting entity;
(2) the name, jurisdiction of formation and type of entity of the converted entity;
(3) if the converting entity is a domestic limited liability company, a statement that the plan of conversion was approved in accordance with the provisions of Sections 1019 through 1024 of the Revised Uniform Limited Liability Company Act or, if the converting entity is a foreign entity, a statement that the conversion was approved by the foreign entity in accordance with the laws of its jurisdiction of formation;
(4) if the converted entity is a domestic filing entity, its public organic record, as an attachment;
(5) if the converted entity is a domestic limited liability partnership, its statement of qualification, as an attachment; and
(6) if the converted entity is a foreign entity, a mailing address to which the secretary of state may send any process served on the secretary of state pursuant to the provisions of Subsection E of Section 1024 of the Revised Uniform Limited Liability Company Act.
C. In addition to the requirements in Subsection B of this section, a statement of conversion may contain any other provision not prohibited by law.
D. If the converted entity is a domestic entity, its public organic record, if any, shall satisfy the requirements of the laws of New Mexico, except that the public organic record does not need to be signed.
E. A plan of conversion that is signed by a domestic converting limited liability company and that meets all of the requirements in Subsection B of this section may be delivered to the secretary of state for filing instead of a statement of conversion and on filing has the same effect. If a plan of conversion is filed as provided in this subsection, references in Article 10 of the Revised Uniform Limited Liability Company Act to a statement of conversion refer to the plan of conversion filed pursuant to the provisions of this subsection.
F. If the converted entity is a domestic limited liability company, the conversion is effective when the statement of conversion is effective. In all other cases, the conversion is effective on the later of:
(1) the date and time provided by the organic law of the converted entity; or
(2) when the statement is effective.
SECTION 1024. [NEW MATERIAL] EFFECT OF CONVERSION.--
A. When a conversion becomes effective:
(1) the converted entity is:
(a) organized pursuant to the provisions of and subject to the organic law of the converted entity; and
(b) without interruption, the same entity as the converting entity;
(2) all property of the converting entity continues to be vested in the converted entity without transfer, reversion or impairment;
(3) all debts, obligations and other liabilities of the converting entity continue as debts, obligations and other liabilities of the converted entity;
(4) except as otherwise provided by law or the plan of conversion, all of the rights, privileges, immunities, powers and purposes of the converting entity remain in the converted entity;
(5) the name of the converted entity may be substituted for the name of the converting entity in any pending action or proceeding;
(6) the certificate of organization of the converted entity is effective;
(7) the provisions of the operating agreement of the converted entity that are to be in a record, if any, approved as part of the plan of conversion are effective; and
(8) the interests in the converting entity are converted, and the interest holders of the converting entity are entitled only to the rights provided to them pursuant to the plan of conversion and to any appraisal rights that they have pursuant to the provisions of Section 1006 of the Revised Uniform Limited Liability Company Act.
B. Except as otherwise provided in the operating agreement of a domestic converting limited liability company, the conversion does not give rise to any right that a member, manager or third party would have upon a dissolution, liquidation or winding up of the converting entity.
C. When a conversion becomes effective, a person that did not have interest holder liability with respect to the converting entity and becomes subject to interest holder liability with respect to a domestic entity as a result of the conversion has interest holder liability only to the extent provided by the organic law of the entity and only for those debts, obligations and other liabilities that arise after the conversion becomes effective.
D. When a conversion becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic converting limited liability company with respect to which the person had interest holder liability is subject to the following rules:
(1) the conversion does not discharge any interest holder liability pursuant to the provisions of the Revised Uniform Limited Liability Company Act to the extent that the interest holder liability arose before the conversion became effective;
(2) the person does not have interest holder liability pursuant to the provisions of that act for any debt, obligation or other liability that arises after the conversion becomes effective;
(3) the provisions of that act continue to apply to the release, collection or discharge of any interest holder liability preserved pursuant to the provisions of Paragraph (1) of this subsection as if the conversion had not occurred; and
(4) the person has whatever rights of contribution from any other person as are provided by that act, a law other than one in that act or the organic rules of the converting entity with respect to any interest holder liability preserved pursuant to the provisions of Paragraph (1) of this subsection as if the conversion had not occurred.
E. When a conversion becomes effective, a foreign entity that is the converted entity may be served with process in New Mexico for the collection and enforcement of any of its debts, obligations and other liabilities as provided in Section 116 of the Revised Uniform Limited Liability Company Act.
F. If the converting entity is a registered foreign entity, its registration to do business in New Mexico is canceled when the conversion becomes effective.
G. A conversion does not require the entity to wind up its affairs and does not constitute or cause the dissolution of the entity.
SECTION 1025. [NEW MATERIAL] DOMESTICATION AUTHORIZED.--
A. By complying with the provisions of Sections 1025 through 1030 of the Revised Uniform Limited Liability Company Act, a domestic limited liability company may become a foreign limited liability company if the domestication is authorized by the laws of the foreign jurisdiction.
B. By complying with the provisions of Sections 1025 through 1030 of the Revised Uniform Limited Liability Company Act applicable to foreign limited liability companies, a foreign limited liability company may become a domestic limited liability company if the domestication is authorized by the laws of the foreign limited liability company's jurisdiction of formation.
C. If a protected agreement contains a provision that applies to a merger of a domestic limited liability company but does not refer to a domestication, the provision applies to a domestication of the limited liability company as if the domestication were a merger until the provision is amended after July 1, 2016.
SECTION 1026. [NEW MATERIAL] PLAN OF DOMESTICATION.--
A. A domestic limited liability company may become a foreign limited liability company in a domestication by approving a plan of domestication. The plan shall be in a record and shall contain:
(1) the name of the domesticating limited liability company;
(2) the name and jurisdiction of formation of the domesticated limited liability company;
(3) the manner of converting the interests in the domesticating limited liability company into interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing;
(4) the proposed certificate of organization of the domesticated limited liability company;
(5) the full text of the provisions of the operating agreement of the domesticated limited liability company that are proposed to be in a record;
(6) the other terms and conditions of the domestication; and
(7) any other provision required by the laws of New Mexico or the operating agreement of the domesticating limited liability company.
B. In addition to the requirements in Subsection A of this section, a plan of domestication may contain any other provision not prohibited by law.
SECTION 1027. [NEW MATERIAL] APPROVAL OF DOMESTICATION.--
A. A plan of domestication of a domestic domesticating limited liability company is not effective unless it has been approved:
(1) by all of the members entitled to vote on or consent to any matter; and
(2) in a record, by each member that will have interest holder liability for debts, obligations and other liabilities that arise after the domestication becomes effective, unless:
(a) the operating agreement of the domesticating company in a record provides for the approval of a domestication or merger in which some or all of its members become subject to interest holder liability by the affirmative vote or consent of fewer than all of the members; and
(b) the member voted for or consented in a record to that provision of the operating agreement or became a member after the adoption of that provision.
B. A domestication of a foreign domesticating limited liability company is not effective unless it is approved in accordance with the laws of the foreign limited liability company's jurisdiction of formation.
SECTION 1028. [NEW MATERIAL] AMENDMENT OR ABANDONMENT OF PLAN OF DOMESTICATION.--
A. A plan of domestication of a domestic domesticating limited liability company may be amended:
(1) in the same manner as the plan was approved, if the plan does not provide for the manner in which it may be amended; or
(2) by its managers or members in the manner provided in the plan, but a member that was entitled to vote on or consent to the approval of the domestication is entitled to vote on or consent to any amendment of the plan that will change:
(a) the amount or kind of interests, securities, obligations, money, other property, rights to acquire interests or securities or any combination of the foregoing, to be received by any of the members of the domesticating limited liability company pursuant to the provisions of the plan;
(b) the certificate of organization or operating agreement of the domesticated limited liability company that will be in effect immediately after the domestication becomes effective, except for changes that do not require the approval of the members of the domesticated limited liability company pursuant to the provisions of its organic law or operating agreement; or
(c) any other terms or conditions of the plan, if the change would adversely affect the member in any material respect.
B. After a plan of domestication has been approved by a domestic domesticating limited liability company and before a statement of domestication becomes effective, the plan may be abandoned as provided in the plan. Unless prohibited by the plan, a domestic domesticating limited liability company may abandon the plan in the same manner as the plan was approved.
C. If a plan of domestication is abandoned after a statement of domestication has been delivered to the secretary of state for filing and before the statement becomes effective, a statement of abandonment, signed by the domesticating limited liability company, shall be delivered to the secretary of state for filing before the statement of domestication becomes effective. The statement of abandonment takes effect on filing, and the domestication is abandoned and does not become effective. The statement of abandonment shall contain:
(1) the name of the domesticating limited liability company;
(2) the date on which the statement of domestication was filed by the secretary of state; and
(3) a statement that the domestication has been abandoned in accordance with the provisions of this section.
SECTION 1029. [NEW MATERIAL] STATEMENT OF DOMESTICATION--EFFECTIVE DATE OF DOMESTICATION.--
A. A statement of domestication shall be signed by the domesticating limited liability company and delivered to the secretary of state for filing.
B. A statement of domestication shall contain:
(1) the name and jurisdiction of formation of the domesticating limited liability company;
(2) the name and jurisdiction of formation of the domesticated limited liability company;
(3) if the domesticating limited liability company is a domestic limited liability company, a statement that the plan of domestication was approved in accordance with the provisions of Sections 1025 through 1030 of the Revised Uniform Limited Liability Company Act or, if the domesticating limited liability company is a foreign limited liability company, a statement that the domestication was approved in accordance with the laws of its jurisdiction of formation;
(4) the certificate of organization of the domesticated limited liability company, as an attachment; and
(5) if the domesticated entity is a foreign limited liability company, a mailing address to which the secretary of state may send any process served on the secretary of state pursuant to the provisions of Subsection E of Section 1030 of the Revised Uniform Limited Liability Company Act.
C. In addition to the requirements in Subsection B of this section, a statement of domestication may contain any other provision not prohibited by law.
D. The certificate of organization of a domestic domesticated limited liability company shall satisfy the requirements of the Revised Uniform Limited Liability Company Act, but the certificate does not need to be signed.
E. A plan of domestication that is signed by a domestic domesticating limited liability company and meets all of the requirements in Subsection B of this section may be delivered to the secretary of state for filing instead of a statement of domestication and on filing has the same effect. If a plan of domestication is filed as provided in this subsection, references in Article 10 of the Revised Uniform Limited Liability Company Act to a statement of domestication refer to the plan of domestication filed pursuant to the provisions of this subsection.
F. If the domesticated entity is a domestic limited liability company, the domestication is effective when the statement of domestication is effective. If the domesticated entity is a foreign limited liability company, the domestication is effective on the later of:
(1) the date and time provided by the organic law of the domesticated entity; or
(2) when the statement is effective.
SECTION 1030. [NEW MATERIAL] EFFECT OF DOMESTICATION.--
A. When a domestication becomes effective:
(1) the domesticated entity is:
(a) organized pursuant to the provisions of and subject to the organic law of the domesticated entity; and
(b) without interruption, the same entity as the domesticating entity;
(2) all property of the domesticating entity continues to be vested in the domesticated entity without transfer, reversion or impairment;
(3) all debts, obligations and other liabilities of the domesticating entity continue as debts, obligations and other liabilities of the domesticated entity;
(4) except as otherwise provided by law or the plan of domestication, all of the rights, privileges, immunities, powers and purposes of the domesticating entity remain in the domesticated entity;
(5) the name of the domesticated entity may be substituted for the name of the domesticating entity in any pending action or proceeding;
(6) the certificate of organization of the domesticated entity is effective;
(7) the provisions of the operating agreement of the domesticated entity that are to be in a record, if any, approved as part of the plan of domestication are effective; and
(8) the interests in the domesticating entity are converted to the extent and as approved in connection with the domestication, and the members of the domesticating entity are entitled only to the rights provided to them pursuant to the plan of domestication and to any appraisal rights that they have pursuant to the provisions of Section 1006 of the Revised Uniform Limited Liability Company Act.
B. Except as otherwise provided in the organic law or operating agreement of the domesticating limited liability company, the domestication does not give rise to any rights that a member, manager or third party would otherwise have upon a dissolution, liquidation or winding up of the domesticating company.
C. When a domestication becomes effective, a person that did not have interest holder liability with respect to the domesticating limited liability company and becomes subject to interest holder liability with respect to a domestic company as a result of the domestication has interest holder liability only to the extent provided by the Revised Uniform Limited Liability Company Act and only for those debts, obligations and other liabilities that arise after the domestication becomes effective.
D. When a domestication becomes effective, the interest holder liability of a person that ceases to hold an interest in a domestic domesticating limited liability company with respect to which the person had interest holder liability is subject to the following rules:
(1) the domestication does not discharge any interest holder liability pursuant to the provisions of the Revised Uniform Limited Liability Company Act to the extent that the interest holder liability arose before the domestication became effective;
(2) a person does not have interest holder liability pursuant to the provisions of that act for any debt, obligation or other liability that arises after the domestication becomes effective;
(3) the provisions of that act continue to apply to the release, collection or discharge of any interest holder liability preserved pursuant to the provisions of Paragraph (1) of this subsection as if the domestication had not occurred; and
(4) a person has whatever rights of contribution from any other person as provided by that act, a law other than one in that act or the operating agreement of the domestic domesticating limited liability company with respect to any interest holder liability preserved pursuant to the provisions of Paragraph (1) of this subsection as if the domestication had not occurred.
E. When a domestication becomes effective, a foreign limited liability company that is the domesticated company may be served with process in New Mexico for the collection and enforcement of any of its debts, obligations and liabilities as provided in Section 116 of the Revised Uniform Limited Liability Company Act.
F. If the domesticating limited liability company is a registered foreign entity, the registration of the company is canceled when the domestication becomes effective.
G. A domestication does not require a domestic domesticating limited liability company to wind up its affairs and does not constitute or cause the dissolution of the company.
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 1101. [NEW MATERIAL] UNIFORMITY OF APPLICATION AND CONSTRUCTION.--In applying and construing the provisions of the Revised Uniform Limited Liability Company Act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.
SECTION 1102. [NEW MATERIAL] RELATION TO ELECTRONIC SIGNATURES IN GLOBAL AND NATIONAL COMMERCE ACT.--The Revised Uniform Limited Liability Company Act modifies, limits and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 U.S.C. Section 7001 et seq., but does not modify, limit or supersede Section 101(c) of that act, 15 U.S.C. Section 7001(c) or authorize electronic delivery of any of the notices described in Section 103(b) of that act, 15 U.S.C. Section 7003(b).
SECTION 1103. [NEW MATERIAL] SAVING CLAUSE.--The Revised Uniform Limited Liability Company Act does not affect an action commenced, a proceeding brought or a right accrued before July 1, 2016.
SECTION 1104. REPEAL.--Sections 53-19-1 through 53-19-74 NMSA 1978 (being Laws 1993, Chapter 280, Sections 1 through 58, Laws 1995, Chapter 213, Sections 7 and 8, Laws 2001, Chapter 200, Section 79, Laws 1995, Chapter 213, Sections 9 through 13, Laws 1993, Chapter 280, Sections 63 through 66, Laws 2001, Chapter 200, Sections 74 and 75 and Laws 1993, Chapter 280, Sections 67 through 74, as amended) are repealed.
SECTION 1105. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2016.
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