A. A member ceases to be a member of a limited liability company upon the occurrence of one or more of the following events:
(1) the member withdraws by voluntary act from a limited liability company whose articles of organization or operating agreement grants him the right to voluntarily withdraw or from a limited liability company with perpetual existence whose articles of incorporation and operating agreement do not prohibit such voluntary withdrawal;
(2) the member ceases to be a member as provided in Subsection D of Section 33 [53-19-33 NMSA 1978] of the Limited Liability Company Act; or
(3) the member is removed as a member:
(a) in accordance with a provision in the articles of organization or an operating agreement; or
(b) by an affirmative vote of all of the members who have not assigned their interests, when such member assigns all of his interest in the limited liability company, unless a provision in the articles of organization or an operating agreement provides otherwise.
B. Unless the articles of organization or an operating agreement provides otherwise, or the member shall obtain the written consent of all members to his continuing membership, a member ceases to be a member of a limited liability company upon the occurrence of one or more of the following events:
(1) the member:
(a) makes an assignment for the benefit of creditors;
(b) files a voluntary petition in bankruptcy;
(c) is adjudicated a bankrupt or insolvent;
(d) files a petition or answer seeking for himself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law or regulation; or
(e) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the member or of all or any substantial part of his assets;
(2) one hundred twenty days shall elapse after any proceeding shall have been commenced against the member seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any law or regulation and such proceeding shall not have been dismissed, or ninety days shall have elapsed after the appointment, without his consent or acquiescence, of a trustee, receiver or liquidator of the member or of all or any substantial part of his assets, and the appointment shall not have been vacated or stayed, or within ninety days after the expiration of any stay, the appointment shall not have been vacated;
(3) in the case of a member who is an individual, his death or the entry of an order by a court adjudicating him incompetent to manage his person or estate;
(4) in the case of a member that is a trust or is a member in his capacity as trustee of a trust, the termination of the trust, but not merely the substitution of a new trustee;
(5) in the case of a member that is a limited liability company, or a partnership, the dissolution and commencement of winding up of the separate limited liability company or partnership;
(6) in the case of a member that is a corporation, the filing of a certificate of its dissolution or the equivalent, or the revocation of its charter, and the lapse of ninety days after notice to the corporation of a revocation of its charter, without a reinstatement of its charter during that ninety days; or
(7) in the case of a member that is an estate, the distribution by the fiduciary of the estate's entire interest in the limited liability company.
C. The members may provide in the articles of organization or an operating agreement for other events the occurrence of which result in a member ceasing to be a member of the limited liability company.
D. A member who ceases to be a member of a limited liability company shall no longer be entitled to vote or to participate in the management or control of the limited liability company or to demand information pursuant to the Limited Liability Company Act, but may, depending upon the circumstances, continue to hold a limited liability company interest in such limited liability company.
History: Laws 1993, ch. 280, § 38.