CHAPTER 53
                             Corporations

ARTICLE 1
State Corporation Commission (Repealed.)

53-1-1 to 53-1-6. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1978, ch. 132, § 6, repealed 51-1-1, 1953 Comp. (former 53-1-1
NMSA 1978), relating to bonds of members of the state corporation commission,
effective March 6, 1978.

Laws 1998, ch. 108, § 81 repealed 53-1-2 to 53-1-6 NMSA 1978, as enacted by Laws
1913, ch. 68, §§ 2, 3, 18, and 11, Code 1915, §§ 5369 to 5372 and Laws 1951, ch. 93,
§ 1, relating to bonds for the chief clerks and department heads of the state corporation
commission and to funds paid to the commissioner, effective January 1, 1999. See 8-8-
1 NMSA 1978 et seq.

ARTICLE 2
Fees and Miscellaneous Corporation Law

53-2-1. Fees of secretary of state.

    A. For filing documents and issuing certificates, the secretary of state shall charge
and collect for:

         (1) filing articles of incorporation and issuing a certificate of incorporation, a
fee of one dollar ($1.00) for each one thousand shares of the total amount of authorized
shares, but in no case less than one hundred dollars ($100) or more than one thousand
dollars ($1,000);

         (2) filing articles of amendment and issuing a certificate of amendment
increasing the total amount of authorized shares or filing restated articles of
incorporation and issuing a restated certificate of incorporation increasing the total
amount of authorized shares, a fee equal to the difference between the fee computed at
the rate set forth in Paragraph (1) of this subsection upon the total amount of authorized
shares, including the proposed increase, and the fee computed at the rate set forth in
Paragraph (1) of this subsection upon the total amount of authorized shares, excluding
the proposed increase, but in no case less than one hundred dollars ($100) or more
than one thousand dollars ($1,000);
         (3) filing articles of amendment and issuing a certificate of amendment not
involving an increase in the total amount of authorized shares or filing restated articles
of incorporation and issuing a restated certificate of incorporation not involving an
increase in the total amount of authorized shares, a fee of one hundred dollars ($100);

         (4) filing articles of merger, consolidation or exchange and issuing a certificate
of merger or consolidation or exchange, a fee equal to the difference between the fee
computed at the rate set forth in Paragraph (1) of this subsection upon the total amount
of authorized shares in the articles of merger or consolidation in excess of the total
amount of authorized shares of the corporations merged or consolidated or upon the
amount of the shares exchanged, but in no case less than two hundred dollars ($200) or
more than one thousand dollars ($1,000);

         (5) filing an application to reserve a corporate name or filing a notice of
transfer of a reserved corporate name, a fee of twenty-five dollars ($25.00);

         (6) filing a statement of a change of address of the registered office or change
of the registered agent, or both, a fee of twenty-five dollars ($25.00);

         (7) filing an agent's statement of change of address of registered agent, a fee
of twenty-five dollars ($25.00);

         (8) filing a statement of the establishment of a series of shares, a fee of one
hundred dollars ($100);

         (9) filing a statement of reduction of authorized shares, a fee of one hundred
dollars ($100);

         (10) filing a statement of intent to dissolve, a statement of revocation of
voluntary dissolution proceedings or articles of dissolution, a fee of fifty dollars ($50.00);

         (11) filing an application of a foreign corporation for an amended certificate of
authority to transact business in this state and issuing an amended certificate of
authority, a fee of fifty dollars ($50.00);

         (12) filing a copy of articles of merger or conversion of a foreign corporation
holding a certificate of authority to transact business in this state not increasing the total
amount of authorized shares, a fee of two hundred dollars ($200);

         (13) filing an application for a certificate of authority of a foreign corporation
and issuing to it a certificate of authority, a fee of one dollar ($1.00) for each one
thousand shares of the total number of authorized shares represented in this state, but
in no case less than two hundred dollars ($200) or more than one thousand dollars
($1,000);
         (14) filing articles of merger or consolidation increasing the total amount of
authorized shares that the surviving or new corporation is authorized to issue in excess
of the aggregate number of shares that the merging or consolidating domestic and
foreign corporations authorized to transact business in this state had authority to issue,
a fee of one dollar ($1.00) for each one thousand shares of the increase in the total
amount of authorized shares represented in this state, but in no case less than two
hundred dollars ($200) or more than one thousand dollars ($1,000);

         (15) filing an application for withdrawal of a foreign corporation and issuing a
certificate of withdrawal, a fee of fifty dollars ($50.00);

         (16) filing a corporate report and filing a supplemental report, a fee of twenty-
five dollars ($25.00);

         (17) filing any other statement, corrected document or report of a domestic or
foreign corporation, a fee of twenty-five dollars ($25.00);

         (18) issuing a certificate of good standing and compliance, a fee of fifty dollars
($50.00); and

         (19) issuing a letter of reinstatement of a domestic or foreign corporation, a fee
of two hundred dollars ($200).

    B. The secretary of state shall also charge and collect for furnishing copies of any
document, instrument or paper relating to a corporation a fee of:

         (1) ten dollars ($10.00) for an uncertified copy of documents, instruments or
papers; and

         (2) twenty-five dollars ($25.00) for a certified copy of documents, instruments
or papers.

    C. As used in this section:

         (1) "total amount of authorized shares" means all shares of stock that the
corporation is authorized to issue; and

         (2) "number of authorized shares represented in this state" means the
proportion of a corporation's total amount of authorized shares that the sum of the value
of its property located in this state and the gross amount of business transacted by it or
from places of business in this state bears to the sum of the value of all of its property,
wherever located, and the gross amount of its business, wherever transacted, as
determined from information contained in its application for a certificate of authority to
transact business in this state.
    D. The secretary of state shall also charge and collect fees, according to a fee
schedule approved by the department of finance and administration, for the provision of
services requested by persons, agencies and entities dealing with the secretary.

    E. The secretary of state may adopt rules establishing reasonable fees for the
following services rendered in connection with a service required or permitted to be
rendered pursuant to a provision of Chapter 53 NMSA 1978:

         (1) an expedited service;

         (2) the handling of checks, drafts, credit or debit cards or other means of
payment upon adoption of rules authorizing their use, for which sufficient funds are not
on deposit; and

         (3) the handling of credit cards and debit cards.

    F. Amounts collected for the handling of credit cards and debit cards are
appropriated to the secretary of state for the purpose of defraying the expense of
providing the service. At the end of a fiscal year, those amounts shall not revert to the
general fund.

History: 1953 Comp., § 51-12-1, enacted by Laws 1975, ch. 65, § 1; 1977, ch. 103, § 1;
1983, ch. 304, § 1; 1988, ch. 93, § 1; 1993, ch. 311, § 1; 1994, ch. 67, § 1; 2001, ch.
200, § 9; 2003, ch. 318, § 2; 2015, ch. 66, § 1.

                                               ANNOTATIONS

Cross references. -- For rural electric cooperatives, see 62-15-19 and 62-15-27
NMSA 1978.

For conservancy districts, see 73-14-16 NMSA 1978.

For fees charged agricultural marketing associations, see 76-12-8 and 76-12-20 NMSA
1978.

The 2015 amendment, effective July 1, 2015, adjusted fees for copying services
provided by the secretary of state and imposed a fee for credit and debit card payments
to the secretary of state; in the catchline, deleted "public regulation commission" and
added "secretary of state"; in the introductory sentence of Subsection A, deleted "public
regulation commission" and added "secretary of state"; in Paragraph (7) of Subsection
A, after "registered agent", deleted "for each affected corporation"; in Subsection B,
after "The", deleted "public regulation commission" and added "secretary of state", and
after "corporation a fee of", deleted "one dollar ($1.00) per page, but in no case less
than ten dollars ($10.00). In addition, a fee of twenty-five dollars ($25.00) shall be paid
in each instance where the commission provides the copies of the document to be
certified"; added Paragraphs (1) and (2) of Subsection B; in Paragraph (1) of Subsection
C, after "shares of stock", added "that"; in Subsection D, deleted "public regulation
commission" and added "secretary of state", and after "dealing with the", deleted
"commission" and added "secretary"; in the introductory sentence of Subsection E,
deleted "public regulation commission" and added "secretary of state"; in Paragraph (1)
of Subsection E, after "service", deleted "or"; in Paragraph (2) of Subsection E, after the
semicolon, added "and"; added Paragraph (3) of Subsection E; and added Subsection
F.

The 2003 amendment, effective July 1, 2003, inserted present Paragraph A(7) and
redesignated the remaining paragraphs accordingly; and substituted "two hundred
dollars ($200)" for "one hundred dollars ($100)" at the end of Paragraph A(19).

The 2001 amendment, effective July 1, 2001, substituted "public regulation
commission" for "state corporation commission" throughout the section; inserted "or
conversion" following "merger" in Paragraph A(11); and added Subsection E.

The 1994 amendment, effective May 18, 1994, substituted "one thousand dollars
($1,000)" for "five thousand dollars ($5,000)" in Paragraphs A(1), A(2) and A(4);
combined the provisions of former Paragraph A(12) and former Subparagraph A(12)(a)
and made related stylistic changes; inserted the language beginning "a fee of" in
Paragraph A(12); redesignated former Subparagraph A(12)(b) as Paragraph A(13) and
redesignated former Paragraphs A(13) to A(17) accordingly; substituted "furnishing" for
"certifying" in Subsection B; inserted Paragraph C(2) and redesignated the former
provisions of Subsection C accordingly.

The 1993 amendment, effective July 1, 1993, in Subsection A, in Paragraph (1),
substituted "one" for "ten" preceding "thousand" and "one hundred dollars ($100)" for
"fifty dollars ($50.00) nor", substituted "one hundred dollars ($100)" for "fifty dollars
($50.00) nor" in Paragraph (2), substituted "one hundred dollars ($100)" for "fifty dollars
($50.00)" in Paragraph (3), substituted "two hundred dollars ($200)" for "one hundred
dollars ($100) nor" in Paragraph (4), substituted "twenty-five dollars ($25.00)" for "ten
dollars ($10.00)" in Paragraphs (5) and (6), substituted "one hundred dollars ($100)" for
"twenty-five dollars ($25.00)" in Paragraphs (7) and (8), substituted "fifty dollars
($50.00)" for "twenty-five dollars ($25.00)" in Paragraphs (9) and (10), substituted "two
hundred dollars ($200)" for "twenty-five dollars ($25.00)" in Paragraph (11), in
Paragraph (12)(b), substituted "two hundred dollars ($200)" for "one hundred dollars
($100) nor" and deleted the following language which formerly appeared at the end of
the subparagraph: "until the filing of a corporate report and thereafter from information
contained in the latest corporate report filed by the corporation", substituted "fifty dollars
($50.00)" for "twenty-five dollars ($25.00)" in Paragraph (13), substituted "twenty-five
dollars ($25.00)" for "twenty dollars ($20.00)" in Paragraph (14), in Paragraph (15),
inserted "corrected document" and substituted "twenty-five dollars ($25.00)" for "ten
dollars ($10.00); and", substituted "fifty dollars ($50.00); and" for "twenty-five dollars
($25.00)" in Paragraph (16), and added Paragraph (17); and, in Subsection B,
substituted "twenty-five dollars ($25.00)" for "one dollar ($1.00) per page" in the second
sentence.
The 1988 amendment, effective May 18, 1988, deleted former Subsection A(17) which
read "reviewing documents and reports to be delivered to the commission, and
indicating approval thereof before delivery to the commission, a fee of one hundred
dollars ($100.00)."

The 1983 amendment, effective June 17, 1983, substituted "authorized shares" for
"capital stock authorized" throughout the section, redesignated former Paragraphs (9)
through (11), (13) through (16), and (18) and (19) of Subsection A as present
Paragraphs (8) through (16) of Subsection A, added Paragraph (17) of Subsection A,
deleted former Paragraph (8) of Subsection A, which read: "filing a statement of
cancellation of shares, a fee of twenty-five dollars ($25.00):", deleted former Paragraph
(12) of Subsection A, which read: "filing a copy of an amendment to the articles of
incorporation of a foreign corporation holding a certificate of authority to transact
business in this state not increasing the total amount of capital stock authorized, a fee of
twenty-five dollars ($25.00);", redesignated former Subparagraph (c) of former
Paragraph (14) of Subsection A as present Subparagraph (b) of present Paragraph (12)
and deleted former Subparagraph (b) of former Paragraph (14), which read: "articles of
amendment of a foreign corporation increasing the total amount of capital stock
authorized;", deleted former Paragraph (17), which read: "filing articles of incorporation
of any religious or charitable association or society or other corporation having no
capital stock and not authorized for pecuniary profit and issuing to it a certificate of
incorporation, a fee of ten dollars ($10.00)"; in Paragraph (1) of Subsection A,
substituted "ten thousand shares" for "one thousand dollars ($1,000)" and added "nor
more than five thousand dollars ($5,000)," substituted "nor" for "or" near the end of
Paragraph (2), inserted "or exchange" following "consolidation" in two places, inserted
"or upon the amount of the shares exchanged" and added "nor more than five thousand
dollars ($5,000)" in Paragraph (4), substituted "shares" for "dollars ($1,000)" following
"one thousand" in the first sentence of Subparagraph (b) of Paragraph (12), substituted
"corporate" for "annual" in two places in the last sentence of Subparagraph (b) of
Paragraph (12), deleted "annual" following "corporate", substituted "a supplemental
report" for "supplemental corporate annual reports," and substituted "twenty dollars
($20.00)" for "ten dollars ($10.00)" in Paragraph (14), substituted "twenty-five dollars
($25.00)" for "ten dollars ($10.00)" in Paragraph (16); substituted "one dollar ($1.00)" for
"seventy-five cents ($.75)" in the first sentence of Subsection B, deleted "the aggregate
par value, expressed in dollars, of" following "means" in Subsection C, deleted the
former last sentence of Subsection C, which read: "For the purposes of this subsection,
shares without par value shall be deemed to have a par value of one dollar ($1.00) per
share," and added Subsection D.

Section inapplicable to regulatory audits. -- This section does not authorize the
commission to require a regulated entity to pay for a regulatory audit required by the
commission. ENMR Tel. Coop. v. N.M. SCC, 1994-NMSC-119, 118 N.M. 654, 884 P.2d
810.

Entrance fee for foreign corporation. -- The entrance fee exacted by a state from a
foreign corporation for a license to carry on local business is not a tax but compensation
for a privilege, and the validity of the charge is not dependent upon the method by which
the amount is determined. Atl. Ref. Co. v. Virginia, 302 U.S. 22, 58 S. Ct. 75, 82 L. Ed.
24 (1937).

Method for setting such fee constitutional. -- It is not an unconstitutional burden
upon interstate commerce that a state statute makes the authorized capital stock of a
foreign corporation seeking to do intrastate business the measure of the fee to be paid
as a condition to admission to the state. Atl. Ref. Co. v. Virginia, 302 U.S. 22, 58 S. Ct.
75, 82 L. Ed. 24 (1937).

Fee proper whenever differential between prior authorized and new stock. -- The
corporation commission (now secretary of state) would be complying with the statute by
charging filing fees upon the differential amount between the prior authorized capital
stock and the new capital stock, regardless of the fact whether or not the increased
authorized stock would take the corporation into a new bracket in computing the fee.
1953 Op. Att'y Gen. No. 53-5667 (rendered under former law).

Amendment changing no par stock to par. -- Where a foreign corporation had paid
an admission fee to the state corporation commission (now secretary of state) upon
filing its articles of incorporation, and now has filed an amendment changing its no par
value common stock to that of par value and in connection therewith increasing the
number of shares of common stock, it is not entitled to file the amendment without
payment of any fee. 1954 Op. Att'y Gen. No. 54-6064 (rendered under former law).

Fees are in nature of franchise tax. -- The fees payable to the corporation
commission (now secretary of state) are in the nature of a franchise tax for the privilege
of operating as a corporation. 1941 Op. Att'y Gen. No. 41-3901.

Law reviews. -- For note, "The Entry and Regulation of Foreign Corporations Under
New Mexico Law and Under the Model Business Corporation Act," see 6 Nat. Res. J.
617 (1966).

For article, "1975 Amendments to the New Mexico Business Corporations Act," see 6
N.M.L. Rev. 57 (1975).

For comment, "Coal Taxation in the Western States: The Need for a Regional Tax
Policy," see 16 Nat. Res. J. 415 (1976).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

53-2-2. Authority to make refunds.

    In response to a written claim for a refund for overpayment of a fee collected by the
commission [secretary of state] pursuant to Section 53-2-1 NMSA 1978, the
commission [secretary of state] or its delegate may authorize the refund to a
corporation, a foreign corporation or a person of any amount determined by the
commission [secretary of state] or its delegate to have been erroneously paid to the
commission [secretary of state].

History: 1953 Comp., § 51-12-1.1, enacted by Laws 1977, ch. 103, § 2.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-2-3. Disposition of fees.

    Except as otherwise provided by law, the secretary of state shall turn over to the
state treasurer the fees collected under the provisions of Chapter 53, Article 2 NMSA
1978 in the manner required by law. The secretary is not responsible for a fraudulent or
worthless check, draft, warrant, order or other means of payment accepted in good faith
for the payment of a fee or on behalf of a corporation, but the secretary may deduct the
fee from money held to be paid into the state treasury. If a fraudulent or worthless
check, draft, warrant or order is not made good immediately, it is the duty of the attorney
general, as soon as the facts are made known to the attorney general, to institute suit
against the corporation and, if sent by the incorporators, its incorporators in the name of
the state for the recovery of the amount of the check, draft, warrant, order or other
means of payment, and protest fees and costs of the action shall be assessed against
the defendant.

History: Laws 1905, ch. 79, § 120; Code 1915, § 1004; Laws 1917, ch. 112, § 8; C.S.
1929, § 32-224; 1941 Comp., § 54-1002; 1953 Comp., § 51-12-2; 2001, ch. 200, § 10;
2015, ch. 66, § 2.

                                               ANNOTATIONS

The 2015 amendment, effective July 1, 2015, required the secretary of state to turn
over fees collected to the state treasurer; in the first sentence, deleted "The public
regulation commission" and added "Except as otherwise provided by law, the secretary
of state", and after "provisions of", changed "this article" to "Chapter 53, Article 2 NMSA
1978"; in the second sentence, changed "commission" to "secretary", after "payment
accepted", deleted "by it", after "corporation, but", deleted "it shall be permitted to" and
added "the secretary may"; and in the third sentence, after "facts are made known to",
deleted "him" and added "the attorney general".

The 2001 amendment, effective July 1, 2001, inserted the section heading; substituted
"public regulation commission" for "state corporation commission" throughout the
section; in the second sentence, inserted "or other means of payment", substituted
"money held by it to be paid into the state treasury" for "moneys in its hands to be
covered into the state treasury"; in the third sentence, inserted "if sent by the
incorporators", deleted "or directors" preceding "in the name of the state", inserted "or
other means of payment" and deleted "or the defendants as they may be" from the end
of the sentence.

53-2-3.1. Fees of secretary of state; dishonored check; civil penalty;
suspension of future filings.

    A. In addition to any penalties, fees or costs incurred pursuant to the provisions of
Section 53-2-3 NMSA 1978, any person who pays a fee, tax, penalty or interest by
check to the secretary of state and which check is dishonored upon presentation is
liable to the secretary for such fee, tax, penalty or interest, together with a civil penalty
of twenty dollars ($20.00) for each such check.

    B. The secretary of state shall not accept for filing any document, instrument or
paper from a person that is liable to the secretary for a fee, tax, penalty, interest or civil
penalty until the liability is discharged.

History: 1978 Comp., § 53-2-3.1, enacted by Laws 1979, ch. 179, § 1; 1993, ch. 311, §
2; 2015, ch. 66, § 3.

                                               ANNOTATIONS

The 2015 amendment, effective July 1, 2015, authorized the secretary of state to
suspend filing privileges for any person that is liable to the secretary of state for a fee
until the liability is discharged; in the catchline, changed "state corporation commission"
to "secretary of state", and added "suspension of future filings"; designated the existing
language in the section as Subsection A; in Subsection A, after "costs", deleted "under"
and added "incurred pursuant to the provisions of", after "check to the", changed "state
corporation commission" to "secretary of state", and after "liable to the", deleted
"commission" and added "secretary"; and added Subsection B.

The 1993 amendment, effective July 1, 1993, substituted "twenty dollars ($20.00)" for
"ten dollars ($10.00)".

53-2-4. Corporations; compilation.

    The public regulation commission [secretary of state] shall compile annually from the
records of its office a complete list, in alphabetical order, of the original and amended
certificates of incorporation filed during the preceding year, together with the location of
the principal office in this state of the corporations affected, the name of the agent in
charge, the amount of the authorized capital stock, the amount of stock with which
business is to be commenced, the date of filing the certificate and the period for which
the corporation is to continue.

History: Laws 1905, ch. 79, § 123; Code 1915, § 1007; C.S. 1929, § 32-227; 1941
Comp., § 54-1004; 1953 Comp., § 51-12-4; Laws 1983, ch. 304, § 2; 2001, ch. 200, §
11.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2001 amendment, effective July 1, 2001, substituted "public regulation
commission" for "state corporation commission"; inserted "of stock" preceding "with
which business"; and made stylistic changes throughout the section.

The 1983 amendment, effective June 17, 1983, added the catchline and deleted "and
published" preceding "a complete list" near the beginning of the section.

53-2-5. [Mutual associations; creation of capital stock.]

    The members of any mutual association, heretofore or hereafter incorporated, may
provide for and create a capital stock of such corporation, upon the consent in writing of
all the members of the corporation, and may provide for the payment of such stock, and
fix and prescribe the rights and privileges of the stockholders therein.

History: Laws 1905, ch. 79, § 122; Code 1915, § 1006; C.S. 1929, § 32-226; 1941
Comp., § 54-1005; 1953 Comp., § 51-12-5.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 431 to
434, 484.

Effect of charter provisions, 15 A.L.R. 1232.

18 C.J.S. Corporations §§ 129 to 143.

53-2-6. [Life insurance on directors, officers, agents and
employees; evidence of authority for corporate action.]

    Whenever a corporation, organized under the laws of this state, has heretofore
caused or shall hereafter cause to be insured the life of any director, officer, agent or
employee, and whenever such corporation is named as a beneficiary in or assignee of
any policy of life insurance, due authority to effect, assign, release, relinquish, convert,
surrender, change the beneficiary, or to take any other or different action with reference
to such insurance, shall be sufficiently evidenced to the insurance company by a written
statement to that effect, signed by the president and the secretary or other
corresponding officer of such corporation, under its corporate seal. Such statement shall
be binding upon such corporation and shall protect the insurance company concerned
in any act done or suffered by it upon the faith thereof without further inquiry into the
validity of the corporate authority or the regularity of the corporate proceedings.

    No person shall be disqualified, by reason of interest in the subject matter, from
acting as a director or as a member of the executive committee of such corporation on
any corporate act touching such insurance.

History: Laws 1927, ch. 33, § 1; C.S. 1929, § 32-1101; 1941 Comp., § 54-217; 1953
Comp., § 51-2-17; recompiled as 1953 Comp., § 51-12-9 by Laws 1967, ch. 87, § 4.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations § 2121.

53-2-7. Amendments by corporations formed under other acts.

    Any corporation organized under any general or special act of the territory or state of
New Mexico, including railroad, telegraph and express companies, building and loan
associations, banks and savings banks, trust companies, land and irrigation companies
and other corporations possessing the right to take and condemn lands, may increase
or decrease its capital stock, change its name, the par value of the shares of its capital
stock or the location of its principal office in or out of this state, extend its corporate
existence and fix any method of altering its by-laws [bylaws] permitted by the Business
Corporation Act [Chapter 53, Articles 11 to 18 NMSA 1978]. Any corporation organized
under Laws 1878, Chapter 1 [63-1-1 to 63-1-8 NMSA 1978], may extend its corporate
existence in the manner prescribed in the Business Corporation Act. Any corporation
except a corporation exercising the right of eminent domain may, in the same manner,
relinquish one or more branches of its business to such branches as might have been
inserted in its original certificate of incorporation; provided, however, that original
articles of incorporation of railroad corporations, and articles of incorporation and
consolidation of railroad corporations incorporated or consolidated under the laws of the
territory or state of New Mexico, or under the laws of the territory or state and any other
state or states, or any such articles which may have heretofore been amended, may be
amended or further amended by providing that the term of corporate existence of the
corporation shall be perpetual.

History: Laws 1905, ch. 79, § 31; Code 1915, § 915; Laws 1915, ch. 76, § 1; C.S.
1929, § 32-132; Laws 1937, ch. 84, § 1; 1941 Comp., § 54-221; Laws 1947, ch. 29, § 1;
1953 Comp., § 51-2-21; recompiled as 1953 Comp., § 51-12-10 by Laws 1967, ch. 87,
§ 5.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Filing with county clerks. -- No requirement exists in this provision for filing or
recording articles of incorporation, or amendments, with the county clerks. 1968 Op.
Att'y Gen. No. 68-108.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations §§ 79 to
95.

18 C.J.S. Corporations §§ 54 to 61.

53-2-8. No stockholder's liability; separate class of corporation.

    No stockholder's liability for unpaid stock shall attach to stock issued by a
corporation pursuant to this section if, at the time of filing the certificate of incorporation,
a separate certificate is signed and executed in the same manner as the certificate of
incorporation, declaring that there is no stockholder's liability on account of stock issued,
and is filed in the office of the public regulation commission [secretary of state] together
with the certificate of incorporation. The separate certificate shall be certified and
recorded in the office of the county clerk, and both the certificate of incorporation and
the certificate of nonliability of stockholders shall be published as provided in this
section. This section does not apply to any of the provisions for the issuance of stock
and fixing liability and the means of enforcing liability upon the same contained in any
other law, but is a separate provision creating a separate class of corporations. Each
corporation taking advantage of the provisions of this section must add to its corporate
name in the certificate of incorporation, in every other certificate, report or record
required by law and in every contract or other corporate instrument, the words "no
stockholder's liability". No corporation shall be organized under this section after
December 31, 1967.

History: Laws 1905, ch. 79, § 23; Code 1915, § 907; Laws 1917, ch. 112, § 4; C.S.
1929, § 32-124; 1941 Comp., § 54-309; 1953 Comp., § 51-3-9; recompiled as 1953
Comp., § 51-12-11 by Laws 1967, ch. 87, § 6; 2001, ch. 200, § 12.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Cross references. -- For general provision regarding liability of subscribers and
shareholders, see 53-11-25 NMSA 1978.

For filing of articles of incorporation, see 53-12-3 NMSA 1978.

The 2001 amendment, effective July 1, 2001, in the first sentence, inserted "of
incorporation" following "certificate", substituted "public regulation commission" for
"state corporation commission", and substituted "the certificate of nonliability" for "the
declaration of nonliability" in the second sentence.

A corporation may file amended articles of incorporation, accompanied by the
certificate of stockholders of nonliability. 1922 Op. Att'y Gen. No. 22-3615.

Building and loan associations. -- The certificate of nonliability provided for by this
section cannot be extended to building and loan associations. 1912 Op. Att'y Gen. No.
12-897.

Stockholder's liability. -- Under this section, a liability rests upon the stockholders for
another sum equal to the amount so certified to have been paid in. 1915 Op. Att'y Gen.
No. 15-1592 (rendered under former law).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations §§ 42, 45;
18A Am. Jur. 2d Corporations §§ 186 to 188, 196, 197, 249 to 257, 736.
Failure to enter transfer of stock on books of corporation as affecting liability of heirs, 60
A.L.R. 120.

Discharge from liability by surrender of stock, 66 A.L.R. 436.

Stockholder's liability after cancellation of charter, 71 A.L.R. 103, 90 A.L.R. 1350.

Extension of time on corporate debt, stockholder's liability as affected by, 97 A.L.R. 641.

Irregularities in organization of corporation as affecting liability of stockholders, 102
A.L.R. 327.

Enforceability in another jurisdiction of personal liability of stockholders for debts of
corporation whose organization is incomplete or defective, 42 A.L.R.2d 659.

Liability of director or dominant shareholder for enforcing debt legally owed him by
corporation, 56 A.L.R.3d 212.

18 C.J.S. Corporations § 418.

53-2-9. Validation of unsealed instruments.

    All instruments executed prior to the effective date of this section by a corporation
are confirmed and validated notwithstanding the lack of a seal required by law. These
instruments have the same effect as if they were properly sealed at the time of
execution, and any records of copies shall be received in evidence the same as
properly sealed originals.

History: 1953 Comp., § 51-12-12, enacted by Laws 1967, ch. 87, § 7.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 300 to
304.

18 C.J.S. Corporations § 106.

53-2-10. Private remedy.

    A. Any person who suffers any loss of money or property as a result of being
designated a director of a corporation without giving his consent may bring an action
against the designating corporation to recover actual damages or one thousand dollars
($1,000), whichever is greater.

    B. The court may award attorneys' fees and costs to the party injured as a result of
the director designation if he prevails. The court may award attorneys' fees to the
corporation charged if the court finds that the action brought against the corporation was
groundless.

    C. The relief provided in this section is in addition to remedies otherwise available
against the same conduct under the common law or other statutes of this state.

History: Laws 1991, ch. 170, § 1; 1993, ch. 318, § 5.

                                               ANNOTATIONS

The 1993 amendment, effective June 18, 1993, substituted "giving his consent" for "his
express written consent" in Subsection A.

53-2-11. Electronic filing and certification of documents; use of
electronic payment of fees.

    A. The secretary of state may permit the electronic filing of documents, including
original documents, and the certification of electronically filed documents when filing or
certification is required or permitted pursuant to a provision of Chapter 53 NMSA 1978.
The secretary of state may accept electronic filings for the purposes of satisfying
requirements for original documents or copies. As used in this section, "electronic filing"
means filing by facsimile, email or other electronic transmission. If the secretary of state
accepts the filing of a document by electronic transmission, the secretary of state shall
accept for filing a document by electronic transmission containing a copy of a signature,
however made.

    B. The secretary of state may accept a credit or debit card, in lieu of cash or check,
or other means of payment specified in the secretary of state's rules, as payment of a
fee pursuant to a provision of Chapter 53 NMSA 1978. The secretary of state shall
determine those credit or debit cards or other means of payment that may be accepted
for payment.

History: Laws 2001, ch. 200, § 13; 2019, ch. 160, § 1.

                                               ANNOTATIONS

The 2019 amendment, effective July 1, 2019, provided that the secretary of state shall
accept for filing a document by electronic transmission containing a copy of a signature;
in Subsection A, after the first occurrence of "The", deleted "public regulation
commission" and added "secretary of state", after the second occurrence of "The",
deleted "rules shall provide for the appropriate treatment of" and added "secretary of
state may accept", after "documents or copies", deleted "and shall provide the
requirements for signature with respect to electronic filings", after "If the", deleted
"commission" and added "secretary of state", after "document by electronic
transmission", deleted "it may" and added "the secretary of state shall", and after "filing
a document", added "by electronic transmission"; and in Subsection B, after "The",
deleted "public regulation commission" and added "secretary of state", after "payment
specified in", deleted "its" and added "the secretary of state's", and after the next
occurrence of "The", deleted "commission" and added "secretary of state".

ARTICLE 3
Franchise Tax (Repealed, Recompiled.)

53-3-1 to 53-3-6. Recompiled.

                                               ANNOTATIONS

Recompilations. -- Laws 1978, ch. 139, § 23, recompiled 51-13-1, 51-13-2, 51-13-2.1,
51-13-2.2, 51-13-6 and 51-13-7, 1953 Comp. (51-13-1 to 51-13-6 NMSA 1978), relating
to the franchise tax, as 51-13-14, 51-13-16, 51-13-20, 51-13-17, 51-13-18 and 51-13-
19, 1953 Comp. (53-3-12, 53-3-13, 53-3-17, 53-3-14, 53-3-15 and 53-3-16 NMSA
1978), respectively, effective January 1, 1979.

53-3-7. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1978, ch. 139, § 24, repealed 51-13-8, 1953 Comp. (53-3-7 NMSA
1978), relating to review of assessments, effective January 1, 1979.

53-3-8. Recompiled.

                                               ANNOTATIONS

Recompilations. -- Laws 1978, ch. 139, § 23, recompiled 51-13-10, 1953 Comp. (53-
3-8 NMSA 1978), relating to additional data, as 51-13-22, 1953 Comp. (53-3-19 NMSA
1978), effective January 1, 1979.

53-3-9, 53-3-10. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1978, ch. 139, § 24, repealed 51-13-12, 1953 Comp. (53-3-9 NMSA
1978), relating to disposition of amounts collected, and 51-13-12.1, 1953 Comp. (53-3-
10 NMSA 1978), relating to refunds, effective January 1, 1979.

53-3-11 to 53-3-17. Repealed.

                                               ANNOTATIONS
Repeals. -- Laws 1986, ch. 20, § 136D repealed former 53-3-11 through 53-3-17
NMSA 1978, relating to the Franchise Tax Act, effective May 21, 1986. For present
provisions, see Chapter 7, Article 2A NMSA 1978.

53-3-18. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1979, ch. 390, § 12, repealed 53-3-18 NMSA 1978, relating to late
filing of the annual report, assessment and notice of franchise tax, penalties and
interest, effective July 1, 1979.

53-3-19 to 53-3-31. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1986, ch. 20, § 136D repealed former 53-3-19 through 53-3-31
NMSA 1978, relating to the Franchise Tax Act, effective May 21, 1986. For present
provisions, see Chapter 7, Article 2A NMSA 1978.

53-3-32. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1979, ch. 390, § 12, repealed 53-3-32 NMSA 1978, relating to fraud
in the payment or collection of the franchise tax, effective July 1, 1979.

53-3-33. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1986, ch. 20, § 136D repealed former 53-3-33 NMSA 1978, as
enacted by Laws 1979, ch. 390, § 10, relating to the Franchise Tax Act, effective May
21, 1986. For present provisions, see Chapter 7, Article 2A NMSA 1978.

53-3-34. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1998, ch. 108, § 81 repealed 53-3-34 NMSA 1978, as enacted by
Laws 1979, ch. 390, § 11, relating to limitations on actions involving franchise taxes,
effective January 1, 1999.
ARTICLE 4
Cooperative Associations

53-4-1. Definitions.

    Unless the subject matter or context requires otherwise, wherever used herein
[Chapter 53, Article 4 NMSA 1978]:

    A. "association" means a group enterprise legally incorporated hereunder, and shall
be deemed to be a nonprofit corporation;

    B. "member" means not only a member in a nonshare association but also a
member in a share association;

    C. "net savings" means the total income of an association minus the costs of
operation;

    D. "interest-dividends" means the return on share or membership capital which is
limited in accordance with the provisions of Section 22 [53-4-22 NMSA 1978] herein;

    E. "savings returns" means the amount returned to the patrons in proportion to their
patronage in accordance with the provisions of Section 31 [53-4-31 NMSA 1978] herein;

    F. "cooperative basis" as applied to any incorporated or unincorporated group not
organized hereunder means:

         (1) that each member has one vote and only one vote except as may be
altered in the articles or by-laws [bylaws] by provision for voting by member
organizations;

         (2) that the maximum rate at which any return is paid on share or membership
capital is limited;

         (3) that the allocation or distribution of net savings after payment, if any, of
said limited return on capital and after making provision for such separate funds as may
be required or specially permitted by statute, articles or by-laws [bylaws], is made to
member patrons, or to all patrons, in proportion to their partonage [patronage].

History: Laws 1939, ch. 164, § 1; 1941 Comp., § 54-1401; 1953 Comp., § 51-15-1.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Cross references. -- For Uniform Unclaimed Property Act, see Chapter 7, Article 8A
NMSA 1978.

For rural electric cooperatives, see 62-15-1 NMSA 1978 et seq.

For cooperative marketing associations of agricultural producers, see 76-12-1 NMSA
1978 et seq.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 64 Am. Jur. 2d Public Utilities § 5.

53-4-1.1. Short title.

    Chapter 53, Article 4 NMSA 1978 may be cited as the "Cooperative Association
Act".

History: Laws 2001, ch. 200, § 14.

                                               ANNOTATIONS

Effective dates. -- Laws 2001, ch. 200, § 101 made Laws 2001, ch. 200, § 14 effective
July 1, 2001.

53-4-2. Who may incorporate.

    Any five or more natural persons or two or more associations may incorporate
hereunder.

History: Laws 1939, ch. 164, § 2; 1941 Comp., § 54-1402; 1953 Comp., § 51-15-2.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations § 1.

53-4-3. Purposes.

    An association may be incorporated hereunder to engage in any one or more lawful
mode or modes of acquiring, selling, producing, building, operating, manufacturing,
furnishing, exchanging or distributing any type or types of property, commodities, goods
or services, and for the transaction of any lawful business.

History: Laws 1939, ch. 164, § 3; 1941 Comp., § 54-1403; 1953 Comp., § 51-15-3.

                                               ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations § 4; 18 Am. Jur. 2d Corporations §§ 28, 30, 31; 18A Am. Jur. 2d
Corporations §§ 192 to 198.

Farm or dairy products, cooperative marketing of, by producers' association, 25 A.L.R.
1113, 33 A.L.R. 247, 47 A.L.R. 936, 77 A.L.R. 405, 98 A.L.R. 1406, 12 A.L.R.2d 130.

18 C.J.S. Corporations § 28; 43 C.J.S. Industrial Cooperative Societies § 3.

53-4-4. Powers.

    An association shall have the capacity to act possessed by natural persons and the
authority to do anything required or permitted herein and also:

    A. to continue as a corporation for the time specified in its articles;

    B. to have a corporate seal and to alter the same at pleasure;

    C. to sue and be sued in its corporate name;

    D. to make by-laws [bylaws] for the government and regulation of its affairs;

    E. to acquire, own, hold, sell, lease, pledge or mortgage any property incident to its
purposes;

    F. to own and hold membership in and share capital of other associations and
corporations, and any types of bonds or other obligations; and while the owner thereof
to exercise all the rights of ownership;

    G. to borrow money, contract debts and make contracts, including agreements of
mutual aid or federation with other associations and other groups organized on a
cooperative basis;

    H. to conduct its affairs without as well as within this state;

    I. to exercise in addition any power granted to ordinary business corporations, save
those powers inconsistent herewith;

    J. to exercise all powers not inconsistent herewith which may be necessary,
convenient, or expedient for the accomplishment of its purposes, and, to that end, the
foregoing enumeration of powers shall not be deemed exclusive.

History: Laws 1939, ch. 164, § 4; 1941 Comp., § 54-1404; 1953 Comp., § 51-15-4.

                                               ANNOTATIONS
Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Cross references. -- For Uniform Unclaimed Property Act, see Chapter 7, Article 8A
NMSA 1978.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 30 to 32; 18 Am. Jur. 2d Corporations §§ 28, 32, 33; 18A Am. Jur. 2d
Corporations §§ 196, 197; 18B Am. Jur. 2d Corporations §§ 1990 to 1992, 1995 to
1999, 2001 to 2008, 2085.

Exemption of cooperative associations from operation of statutes relating to use of
highways by private motor carriers and contract motor carriers for hire, 109 A.L.R. 550,
175 A.L.R. 1333.

Membership corporation or association or cooperative group furnishing to its members
service commonly supplied by public utility, as subject to governmental regulation or to
jurisdiction of public service commission, 132 A.L.R. 1495.

Validity and construction of provisions for liquidated damages in contract with
cooperative marketing association, 12 A.L.R.2d 130.

19 C.J.S. Corporations §§ 554 to 739; 43 C.J.S. Industrial Cooperative Societies § 6.

53-4-5. Articles of incorporation; contents.

    Articles of incorporation shall be signed by each of the incorporators and
acknowledged by at least three of them, if natural persons, and by the presidents and
the secretaries, if associations, before an officer authorized to take acknowledgments.
Within the limitations set forth in the Cooperative Association Act, the articles shall
contain:

    A. a statement as to the purpose for which the association is formed;

    B. the name of the association, which shall include the word "cooperative";

    C. the term of existence of the association, which may be perpetual;

    D. the location and address of the principal office of the association;

    E. the names and addresses of the incorporators of the association;

    F. the names and addresses of the directors who will manage the affairs of the
association for the first year, unless sooner changed by the members;
    G. a statement of whether the association is organized with or without shares and
the number of shares or memberships subscribed for;

    H. if the association is organized with shares, the amount of authorized capital, the
number and types of shares and the par value thereof, which may be placed at any
figure, and the rights, preferences and restrictions of each type of share;

    I. the minimum number of shares of the association that shall be owned in order to
qualify for membership;

    J. the maximum amount or percentage of capital of the association that may be
owned or controlled by any member;

    K. the method by which any surplus, upon dissolution of the association, shall be
distributed in conformity with the requirements of the Cooperative Association Act for
division of such surplus;

    L. the address of the initial registered office of the association and the name of the
initial registered agent at that address; and

    M. a statement executed by the registered agent in which the agent acknowledges
acceptance of the appointment by the filing association, if the agent is an individual, or a
statement executed by an authorized officer of a corporation in which the officer
acknowledges the corporation's acceptance of the appointment by the filing association
as its registered agent, if the agent is a corporation.

    The articles may also contain other provisions not inconsistent with the Cooperative
Association Act.

History: Laws 1939, ch. 164, § 5; 1941 Comp., § 54-1405; 1953 Comp., § 51-15-5;
1978 Comp., § 53-4-5; Laws 1991, ch. 170, § 2; 1993, ch. 311, § 3; 1993, ch. 318, § 1;
2001, ch. 200, § 15; 2003, ch. 318, § 3.

                                               ANNOTATIONS

The 2003 amendment, effective July 1, 2003, inserted "is" preceding "organized with
shares" in Subsection H; added Subsection M; and deleted "any" preceding "other
provisions not" in the last paragraph.

The 2001 amendment, effective July 1, 2001, substituted "the Cooperative Association
Act" for "Chapter 53, Article 4 NMSA 1978" in three places; inserted "the association" in
the beginning of Subsection H; inserted "of the association" in Subsections I and J; and
added Subsection L.

The 1993 amendment, effective June 18, 1993, deleted former Subsection G, which
read: "a statement that an affidavit signed by each director stating that he consents to
being a director is on file with the cooperative association", and redesignated former
Subsections H through L as present Subsections G through K.

The 1991 amendment, effective January 1, 1992, substituted "in Chapter 53, Article 4
NMSA 1978" for "herein" in the second sentence in the introductory paragraph; added
Subsection G; redesignated former paragraphs (1) to (11) as Subsections A to F and H
to L; substituted "Section 53-4-36 NMSA 1978" for "Section 36 herein" in Subsection L;
substituted "with Chapter 53, Article 4 NMSA 1978" for "herewith" at the end of the
section; and made minor stylistic changes.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 13 to 15; 18A Am. Jur. 2d Corporations §§ 199, 202, 203, 205, 206.

18 C.J.S. Corporations § 25 et seq.; 43 C.J.S. Industrial Cooperative Societies § 14.

53-4-6. Articles of incorporation; filing; recordation; fees.

    The articles of incorporation of the association shall be filed with the public
regulation commission [secretary of state] together with a fee of fifty dollars ($50.00)
and shall be recorded with the county clerk of the county where the principal office of
the association is located for a fee of one dollar ($1.00).

History: Laws 1939, ch. 164, § 6; 1941 Comp., § 54-1406; 1953 Comp., § 51-15-6;
Laws 1993, ch. 311, § 4; 2001, ch. 200, § 16.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2001 amendment, effective July 1, 2001, inserted "of the association" following
"articles of incorporation" and "the principal office"; and substituted "public regulation
commission" for "state corporation commission".

The 1993 amendment, effective July 1, 1993, inserted "of incorporation", deleted "of
New Mexico" following "commission", and substituted "fifty dollars ($50.00)" for "twenty-
five dollars ($25.00)".
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 13 to 15; 18A Am. Jur. 2d Corporations §§ 208, 209, 211, 213, 214.

18 C.J.S. Corporations § 25 et seq.

53-4-6.1. Registered office and registered agent.

    An association shall have and continuously maintain in New Mexico:

    A. a registered office, which may be the same as its principal office; and

    B. a registered agent that may be:

         (1) an individual resident in the state whose business office is identical with
the registered office of the association;

         (2) a for-profit or not-for-profit domestic corporation having an office identical
with the registered office of the association; or

         (3) a for-profit or not-for-profit foreign corporation authorized to transact
business or conduct affairs in New Mexico and having an office identical with the
registered office of the corporation.

History: Laws 2001, ch. 200, § 23.

                                               ANNOTATIONS

Effective dates. -- Laws 2001, ch. 200, § 101 made Laws 2001, ch. 200, § 23 effective
July 1, 2001.

53-4-6.2. Change of registered office or registered agent.

    A. An association may change its registered office or its registered agent, or both,
by filing in the office of the public regulation commission [secretary of state] a statement
that includes:

         (1) the name of the association;

         (2) the address of its registered office;

         (3) if the address of the association's registered office is changed, the
address to which the registered office is changed;

         (4) the name of its registered agent;

         (5) if the association's registered agent is changed:
             (a) the name of its successor registered agent; and

             (b) if the successor registered agent is an individual, a statement executed by
the successor registered agent acknowledging acceptance of the appointment by the
filing association as its registered agent; or

             (c) if the successor registered agent is a corporation, a statement executed
by an authorized officer of the corporation in which the officer acknowledges the
corporation's acceptance of the appointment by the filing association as its registered
agent; and

         (6) a statement that the address of the association's registered office and the
address of the office of its registered agent, as changed, will be identical.

    B. The statement made pursuant to the provisions of Subsection A of this section
shall be executed by the association by any two members and delivered to the public
regulation commission [secretary of state]. If the commission [secretary of state] finds
that the statement conforms to the provisions of the Sanitary Projects Act [Chapter 3,
Article 29 NMSA 1978], it shall file the statement in the office of the commission
[secretary of state]. The change of address of the registered office, or the appointment
of a new registered agent, or both, shall become effective upon filing of the statement
required by this section.

    C. A registered agent of an association may resign as agent upon filing a written
notice thereof, executed in duplicate, with the public regulation commission [secretary of
state]. The commission [secretary of state] shall mail a copy immediately to the
association in care of an officer, who is not the resigning registered agent, at the
address of the officer as shown by the most recent annual report of the association. The
appointment of the agent shall terminate upon the expiration of thirty days after receipt
of the notice by the commission [secretary of state].

History: Laws 2001, ch. 200, § 24; 2003, ch. 318, § 4.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.
The 2003 amendment, effective July 1, 2003, deleted "his" following "registered agent
acknowledging" in Subparagraph A(5)(b); substituted "a statement executed by an
authorized officer" for "an affidavit executed by the president or vice president" following
"is a corporation" in Subparagraph A(5)(c); deleted Paragraph A(7) which read: "a
statement that the change was authorized by resolution duly adopted by its board of
directors".

53-4-6.3. Service of process on association.

    The registered agent appointed by an association shall be an agent of the
association upon whom any process, notice or demand required or permitted by law to
be served upon the association may be served. Nothing in this section limits or affects
the right for process, notice or demand to be served upon an association in any other
manner permitted by law.

History: Laws 2001, ch. 200, § 25.

                                               ANNOTATIONS

Effective dates. -- Laws 2001, ch. 200, § 101 made Laws 2001, ch. 200, § 25 effective
July 1, 2001.

53-4-6.4. Recompiled.

                                               ANNOTATIONS

Recompilations. -- Laws 2001, ch. 200, § 26, relating to the cancellation of
certification of incorporation of some domestic corporations, was erroneously compiled
as 53-4-6.4 NMSA 1978. It was recompiled as 53-5-7.1 NMSA 1978.

53-4-7. Articles of incorporation; amendments; fee.

    A. Amendments to the articles of incorporation may be proposed by a two-thirds'
vote of the board of directors or by petition of one-tenth of the association's members.
Notice of the meeting to consider the amendment shall be sent by the secretary at least
thirty days in advance to each member at his last known address, accompanied by the
full text of the proposal and by that part of the articles to be amended. Two-thirds of the
members voting may adopt the amendment and, when verified by the president and the
secretary, it shall be filed with the public regulation commission [secretary of state]
within thirty days of its adoption, and a fee of twenty-five dollars ($25.00) shall be paid.

    B. If the amendment is to alter the preferences of outstanding shares of any type or
to authorize the issuance of shares having preferences superior to outstanding shares
of any type, the vote of two-thirds of the members owning the outstanding shares
affected by the change shall also be required for the adoption of the amendment.
    C. The amount of capital and the number and par value of shares may be
diminished or increased by amendment of the articles, but the capital shall not be
diminished below the amount of paid-up capital existing at the time of amendment.

History: Laws 1939, ch. 164, § 7; 1941 Comp., § 54-1407; 1953 Comp., § 51-15-7;
Laws 1993, ch. 311, § 5; 2001, ch. 200, § 17.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2001 amendment, effective July 1, 2001, inserted "of incorporation" following
"articles" and substituted "public regulation commission" for "state corporation
commission".

The 1993 amendment, effective July 1, 1993, added the subsection designations; and
in Subsection A, substituted "twenty-five dollars ($25.00)" for "ten dollars ($10.00)" and
made minor stylistic changes throughout the subsection.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 13 to 15; 18 Am. Jur. 2d Corporations §§ 79 to 95.

18 C.J.S. Corporations § 25 et seq.

53-4-8. Adoption, amendment, or repeal of by-laws [bylaws].

    By-laws [Bylaws] shall be adopted, amended, or repealed by a majority vote of the
members voting.

History: Laws 1939, ch. 164, § 8; 1941 Comp., § 54-1408; 1953 Comp., § 51-15-8.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 13 to 15; 18A Am. Jur. 2d Corporations §§ 327 to 330, 332.

18 C.J.S. Corporations §§ 111 to 121.

53-4-9. Contents of by-laws [bylaws].

    The by-laws [bylaws] may, within the limitations set forth herein provide for:

    A. the method and terms of admission to membership and the disposal of members'
interests on cessation of membership for any reason;

    B. the time, place and manner of calling and conducting meetings;

    C. the number or percentage of the members constituting a quorum;

    D. the number, qualifications, powers, duties, term of office, and manner, time and
vote for election, of directors and officers; and the classification, if any, of directors;

    E. the compensation, if any, of the directors, and the number of directors necessary
to constitute a quorum;

    F. the method of distributing the net savings;

    G. the various discretionary provisions herein as well as other provisions incident to
the purposes and activities of the association.

History: Laws 1939, ch. 164, § 9; 1941 Comp., § 54-1409; 1953 Comp., § 51-15-9.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 13 to 15; 18 Am. Jur. 2d Corporations §§ 17, 18; 18A Am. Jur. 2d
Corporations §§ 310, 311, 314 to 318, 320, 321, 323, 325, 326, 331.

18 C.J.S. Corporations §§ 113 to 115; 43 C.J.S. Industrial Cooperative Societies § 4.

53-4-9.1. Indemnification of officers and directors.

    Each association shall have the power to indemnify any director or officer or former
director or officer of the association against reasonable expenses, costs and attorneys'
fees actually and reasonably incurred by him in connection with the defense of any
action, suit or proceeding, civil or criminal, in which he is made a party by reason of
being or having been a director or officer. The indemnification may include any amounts
paid to satisfy a judgment or to compromise or settle a claim. The director or officer
shall not be indemnified if he shall be adjudged to be liable on the basis that he has
breached or failed to perform the duties of his office and the breach or failure to perform
constitutes willful misconduct or recklessness. Advance indemnification may be allowed
of a director or officer for reasonable expenses to be incurred in connection with the
defense of the action, suit or proceeding, provided that the director or officer shall
reimburse the association if it is subsequently determined that the director or officer was
not entitled to indemnification. Each association may make any other indemnification as
authorized by the articles of incorporation or bylaws or by a resolution adopted after
notice by the members entitled to vote. As used in this section, "director" means any
person who is or was a director of the association and any person who, while a director
of the association, is or was serving at the request of the association as a director,
officer, partner, trustee, employee or agent of any foreign or domestic corporation or
nonprofit corporation, cooperative, partnership, joint venture, trust, other incorporated or
unincorporated enterprise or employee benefit plan or trust.

History: 1978 Comp., § 53-4-9.1, enacted by Laws 1987, ch. 238, § 1.

                                               ANNOTATIONS

Cross references. -- For indemnification of officers and directors, see 53-8-26 NMSA
1978.

Law reviews. -- For article, "Statutory Adoption of Several Liability in New Mexico: A
Commentary and Quasi-Legislative History," see 18 N.M.L. Rev. 483 (1988).

53-4-10. Regular and special meetings.

    Regular meetings of members shall be held as prescribed in the by-laws [bylaws],
but shall be held at least once a year. Special meetings may be demanded by a majority
vote of the directors or by written petition of at least one-tenth of the members, in which
case it shall be the duty of the secretary to call such meeting to take place within 30
days after such demand. Regular or special meetings, including meetings by units as
hereinafter provided, may be held within or without this state as the articles or by-laws
[bylaws] may prescribe.

History: Laws 1939, ch. 164, § 10; 1941 Comp., § 54-1410; 1953 Comp., § 51-15-10.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1456,
1461, 1464, 1465, 1467, 1470, 1471.
18 C.J.S. Corporations §§ 362 to 396; 43 C.J.S. Industrial Cooperative Societies § 12.

53-4-11. Notice of meeting.

    The secretary shall give notice of the time and place of meetings by sending a notice
thereof to each member at his last-known address not less than the number of days in
advance of the meeting specified in the by-laws [bylaws]. In case of a special meeting
the notice shall specify the purpose for which such meeting is called.

History: Laws 1939, ch. 164, § 11; 1941 Comp., § 54-1411; 1953 Comp., § 51-15-11.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1448,
1452 to 1455, 1457, 1458, 1460, 1480 to 1482.

18 C.J.S. Corporations §§ 365 to 367.

53-4-12. Meetings by units of the membership.

    The articles or by-laws [bylaws] may provide for the holding of meetings by units of
the membership and may provide for a method of transmitting the votes there cast to
the central meeting, or for a method of representation by the election of delegates to the
central meeting; or for a combination of both such methods.

History: Laws 1939, ch. 164, § 12; 1941 Comp., § 54-1412; 1953 Comp., § 51-15-12.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1466,
1467, 1684 to 1686, 1726, 1727.

53-4-13. One member - one vote.

    Each member of an association shall have one and only one vote, except that,
where an association has, as members, other associations, or groups organized on a
cooperative basis, the voting rights of such member associations or groups may be
prescribed in the article or by-laws [bylaws].
    No voting agreement or other device to evade the one member-one vote rule shall
be enforceable at law or in equity.

History: Laws 1939, ch. 164, § 13; 1941 Comp., § 54-1413; 1953 Comp., § 51-15-13.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations § 1476.

18 C.J.S. Corporations § 378.

53-4-14. No proxy.

    No member shall be permitted to vote by proxy.

History: Laws 1939, ch. 164, § 14; 1941 Comp., § 54-1414; 1953 Comp., § 51-15-14.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations § 32; 18B Am. Jur. 2d Corporations § 1478.

18 C.J.S. Corporations §§ 385 to 394.

53-4-15. Voting by mail.

    The articles or by-laws [bylaws] may provide for either or both of the following types
of voting by mail:

    A. that the secretary shall send to the members a copy of any proposed schedule to
be offered at a meeting, together with the notice of said meeting, and that the mail votes
cast by the members shall be counted together with those cast at the meeting if such
mail votes are returned to the association within a specified number of days;

    B. that the secretary shall send to any member absent from a meeting an exact
copy of the proposal acted upon at the meeting, and that the mail vote of the member
upon such proposal, if returned within a specified number of days, shall be counted
together with the votes cast at said meeting.

    The articles or by-laws [bylaws] may also determine whether and to what extent mail
votes shall be counted in computing a quorum.

History: Laws 1939, ch. 164, § 15; 1941 Comp., § 54-1415; 1953 Comp., § 51-15-15.
                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

53-4-16. Application of voting provisions herein to voting by mail.

    If an association has provided for voting by mail, any provision herein referring to
votes cast by the members shall be construed to include the votes cast by mail.

History: Laws 1939, ch. 164, § 16; 1941 Comp., § 54-1416; 1953 Comp., § 51-15-16.

53-4-17. Application of voting provisions herein to voting by
delegates.

    If an association has provided for voting by delegates, any provision herein referring
to votes cast by the members shall apply to votes cast by delegates; but this shall not
permit delegates to vote by mail.

History: Laws 1939, ch. 164, § 17; 1941 Comp., § 54-1417; 1953 Comp., § 51-15-17.

53-4-18. Directors.

    An association shall be managed by a board of not less than five directors, who shall
be elected by and from the members of the association, and shall hold office until their
successors are elected, or until removed. Vacancies in the board of directors, otherwise
than by removal or expiration of term, shall be filled in such manner as the by-laws
[bylaws] may provide.

    The by-laws [bylaws] may provide for a method of apportioning the number of
directors among the units into which the association may be divided, and for the election
of directors by the respective units to which they are apportioned.

    An executive committee of the board of directors may be elected in such a manner
and with such powers and duties as the articles or by-laws [bylaws] may prescribe.

    Meetings of directors or of the executive committee may be held within or without the
state.

History: Laws 1939, ch. 164, § 18; 1941 Comp., § 54-1418; 1953 Comp., § 51-15-18.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 18, 19; 18A Am. Jur. 2d Corporations §§ 953 to 955, 986, 1159; 18B
Am. Jur. 2d Corporations §§ 1362, 1363, 1365, 1366, 1371, 1381.

19 C.J.S. Corporations §§ 433 to 553; 43 C.J.S. Industrial Cooperative Societies § 8.

53-4-18.1. Duties of directors.

    A director shall perform his duties as a director, including his duties as a member of
any committee of the board upon which the director may serve, in good faith, in a
manner the director believes to be in or not opposed to the best interests of the
association and with such care as an ordinarily prudent person would use under similar
circumstances in a like position. In performing such duties, a director shall be entitled to
rely on factual information, opinions, reports or statements including financial
statements and other financial data in each case prepared or presented by:

    A. one or more officers or employees of the association whom the director
reasonably believes to be reliable and competent in the matters presented;

    B. counsel, public accountants or other persons as to matters which the director
reasonably believes to be within such persons' professional or expert competence; or

    C. a committee of the board upon which the director does not serve, duly
designated in accordance with a provision of the articles of incorporation or the bylaws
as to matters within its designated authority, which committee the director reasonably
believes to merit confidence, but the director shall not be considered to be acting in
good faith if the director has knowledge concerning the matter in question that would
cause such reliance to be unwarranted.

History: 1978 Comp., § 53-4-18.1, enacted by Laws 1987, ch. 238, § 2.

53-4-18.2. Liability of directors.

    No director of the association shall be personally liable to the association or its
members for monetary damages for breach of fiduciary duty as a director unless:

    A. the director has breached or failed to perform the duties of the director's office in
compliance with Section 53-4-18.1 NMSA 1978; and

    B. the breach or failure to perform constitutes willful misconduct or recklessness.

    The provisions of this section shall, however, only eliminate the liability of a director
for action taken as a director or any failure to take action as a director at meetings of the
board of directors or of a committee of the board of directors on or after the date when
the provisions of this section become effective.
History: 1978 Comp., § 53-4-18.2, enacted by Laws 1987, ch. 238, § 3.

                                               ANNOTATIONS

Compiler's notes. -- The phrase "the date when the provisions of this section become
effective" in the last sentence refers to April 9, 1987, the effective date of Laws 1987,
Chapter 238.

53-4-18.3. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1993, ch. 318, § 6 repealed 53-4-18.3 NMSA 1978, as enacted by
Laws 1991, ch. 170, § 3, requiring any person elected or appointed to a board of
directors to file an affidavit with the corporation stating that he consents to be a member
of the board of directors, effective June 18, 1993. For provisions of former section, see
the 1992 NMSA 1978 on NMOneSource.com.

53-4-19. Officers.

    The officers of an association shall include a president, one or more vice presidents,
a secretary and a treasurer or a secretary-treasurer. The officers shall be elected
annually by the directors unless the by-laws [bylaws] otherwise provide. The president
and at least one vice president must be directors, but no other officer need be a
director.

History: Laws 1939, ch. 164, § 19; 1941 Comp., § 54-1419; 1953 Comp., § 51-15-19.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 33, 35; 18B Am. Jur. 2d Corporations §§ 1360, 1361, 1364, 1406.

19 C.J.S. Corporations §§ 433 to 553; 43 C.J.S. Industrial Cooperative Societies § 8.

53-4-20. Removal of directors and officers.

    A director or officer may be removed with or without cause, by a vote of two-thirds of
the members voting at a regular or special meeting. The director or officer involved shall
have an opportunity to be heard at said meeting. A vacancy caused by any such
removal shall be filled by the vote provided in the by-laws [bylaws] for election of
directors.
History: Laws 1939, ch. 164, § 20; 1941 Comp., § 54-1420; 1953 Comp., § 51-15-20.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1430,
1432, 1439, 1440, 1443, 1690, 2065, 2077, 2078.

19 C.J.S. Corporations §§ 454 to 457; 43 C.J.S. Industrial Cooperative Societies § 8.

53-4-21. Referendum.

    The articles or by-laws [bylaws] may provide that within a specified period of time
any action taken by the directors must be referred to the members for approval or
disapproval if demanded by petition of at least ten percent (10%) of all the members or
by vote of at least a majority of the directors. However, the rights of third parties which
have vested between the time of such action and such referendum shall not be impaired
thereby.

History: Laws 1939, ch. 164, § 21; 1941 Comp., § 54-1421; 1953 Comp., § 51-15-21.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

53-4-21.1. Disposition of property.

    An association may not sell, convey, lease, exchange, transfer or otherwise dispose
of all or any substantial portion of its property unless such sale, conveyance, lease,
exchange, transfer or other disposition is authorized at a duly held meeting of the
members thereof by the affirmative vote of not less than two-thirds of all of the members
of the association and unless the notice of such proposed sale, lease or other
disposition shall have been contained in the notice of the meeting; provided, however,
that notwithstanding anything herein contained or any other provisions of law, the board
of directors of an association, without authorization by the members thereof, shall have
full power and authority to authorize the execution and delivery of a mortgage or
mortgages or a deed or deeds of trust upon, or the pledging, assignment for security
purposes or encumbering of any or all of the property, assets, rights, privileges,
licenses, franchises and permits of the association, whether acquired or to be acquired
and wherever situated, as well as the revenues and income therefrom, all upon such
terms and conditions as the board of directors shall determine, to secure any
indebtedness of the association.
History: 1978 Comp., § 53-4-21.1, enacted by Laws 1987, ch. 238, § 4.

53-4-22. Limitations on interest-dividends.

    Interest-dividends shall not exceed fifteen percent per year and shall be
noncumulative. Total interest-dividends distributed for any single period shall not
exceed fifty percent of the net savings for that period.

History: Laws 1939, ch. 164, § 22; 1941 Comp., § 54-1422; 1953 Comp., § 51-15-22;
Laws 1983, ch. 14, § 1.

                                               ANNOTATIONS

The 1983 amendment, effective June 17, 1983, combined the former first and second
paragraphs into the present single paragraph and substituted "fifteen percent per year"
for "six percent per annum" in the first sentence.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations § 22; 18B Am. Jur. 2d Corporations §§ 1175, 1263 to 1276, 1305.

Distribution of funds by nonprofit corporation absent dissolution, 51 A.L.R.3d 1318.

Validity and enforceability of bylaw amendment reducing benefits available to members,
61 A.L.R.3d 976.

53-4-23. Eligibility and admission to membership.

    Any natural person, association, incorporated or unincorporated group organized on
a cooperative basis, or any nonprofit group shall be eligible for membership in an
association if it has met any qualifications for eligibility stated in the articles or by-laws
[bylaws], and shall be deemed a member upon payment in full for the minimum amount
of share or membership capital stated in the articles as necessary to qualify for
membership.

History: Laws 1939, ch. 164, § 23; 1941 Comp., § 54-1423; 1953 Comp., § 51-15-23.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

A cooperative incorporated under the Cooperative Association Act may not
lawfully receive state funds. -- A cooperative incorporated under the Cooperative
Association Act (CAA) may not be comprised of public entities, and therefore no New
Mexico public funds may be provided to a cooperative organized under the CAA and
meeting the requirements for tax exempt status of Internal Revenue Code Section
501(c)(12), unless such funds satisfy the requirements of the New Mexico anti-donation
clause. This limitation applies to state funds only, and does not apply to any federal
funds that are channeled through a state entity. Legality of a 501(c)(12) Cooperative to
Receive State and Federal Funding for the Development and Operation of Fiber-Optic
Broadband Networks (7/19/22), Att'y Gen. Adv. Ltr. 2022-06.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 14, 21; 18A Am. Jur. 2d Corporations §§ 728 to 730.

18 C.J.S. Corporations §§ 293 to 304.

53-4-24. Subscribers.

    Any natural person or group eligible for membership and legally obligated to
purchase a share or shares of, or membership in, an association shall be deemed a
subscriber; the articles or by-laws [bylaws] may determine whether, and the conditions
under which, any rights of membership shall be granted to subscribers.

History: Laws 1939, ch. 164, § 24; 1941 Comp., § 54-1424; 1953 Comp., § 51-15-24.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 578 to
580.

53-4-25. Share and membership certificates; issuance and
contents.

    No certificate for shares or for membership shall be issued until paid for in full. There
shall be printed upon each certificate issued by an association a statement embodying
the requirements of Sections 13, 14 and 26 [53-4-13, 53-4-14, 53-4-26 NMSA 1978]
herein and of any provisions in its articles which limit the right of the certificate holder to
assign or transfer such certificate.

History: Laws 1939, ch. 164, § 25; 1941 Comp., § 54-1425; 1953 Comp., § 51-15-25.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations §§ 42, 45;
18A Am. Jur. 2d Corporations §§ 663, 736, 890.

18 C.J.S. Corporations § 122 et seq.; 43 C.J.S. Industrial Cooperatives § 12.
53-4-26. Transfer of shares and membership; withdrawal.

    If a member desires to withdraw from the association or dispose of any or all of his
holdings therein, the directors shall have the power to purchase such holdings by
paying him out of surplus funds the par value of any or all of the holdings offered. The
directors shall then reissue or cancel the same. A vote of the majority of the members
voting at a regular or special meeting may order the directors to exercise this power to
purchase.

    If the association fails, within 60 days of the original offer, to purchase all or any part
of the holdings offered, the member may dispose of the unpurchased interest
elsewhere, subject to the approval of the transferee by a majority vote of the directors.
Any would-be transferee not approved by the directors may appeal to the members at
their first regular or special meeting thereafter, and the action of the meeting shall be
final. If such transferee is not approved, the directors are under a duty to exercise their
power to purchase, if and when there are sufficient surplus funds.

History: Laws 1939, ch. 164, § 26; 1941 Comp., § 54-1426; 1953 Comp., § 51-15-26.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations § 25; 18A Am. Jur. 2d Corporations §§ 689 to 691, 699.

43 C.J.S. Industrial Cooperative Societies § 19.

53-4-27. Share and membership certificates; recall.

    The by-laws [bylaws] may give the directors the power to use the surplus funds to
recall, at par value, the holdings of any member in excess of the amount requisite for
membership; and may also provide that if any member has failed to patronize the
association during a period of time specified in the by-laws [bylaws], the directors may
use the surplus funds to recall all his holdings and thereupon he shall cease to be a
member of the association. When so recalled, such share or membership certificates
shall be either reissued or canceled.

History: Laws 1939, ch. 164, § 27; 1941 Comp., § 54-1427; 1953 Comp., § 51-15-27.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 488,
541, 542.
43 C.J.S. Industrial Cooperative Societies § 19.

53-4-28. Share and membership certificates; attachment.

    The holdings of any member of an association, to the extent of the minimum amount
necessary for membership, shall be exempt from attachment, execution, or garnishment
for the debts of the owner. If any holdings in excess of this amount are subject to such
liability, the directors of the association may either admit the purchaser thereof to
membership, or may, if and when there are sufficient surplus funds, purchase from him
such holdings at par value.

History: Laws 1939, ch. 164, § 28; 1941 Comp., § 54-1428; 1953 Comp., § 51-15-28.

                                               ANNOTATIONS

Cross references. -- For rules governing garnishment and writs of execution in the
district, magistrate, and metropolitan courts, see Rules 1-065.1, 2-801, and 3-801,
NMRA respectively.

For form for claim of exemptions on executions, see Rule 4-803 NMRA.

For form for order on claim of exemption and order to pay in execution proceedings, see
Rule 4-804 NMRA.

For form for application for writ of garnishment and affidavit, see Rule 4-805 NMRA.

For form for notice of right to claim exemptions from execution, see Rule 4-808A NMRA.

For form for claim of exemption from garnishment, see Rule 4-809 NMRA.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 43 C.J.S. Industrial Cooperative
Societies § 10.

53-4-29. Liability of members.

    Members shall not be jointly or severally liable for any debts of the association, nor
shall subscribers be so liable except to the extent of the unpaid amount on the shares or
membership certificates subscribed by them. No subscriber shall be released from such
liability by reason of any assignment of his interest in the shares or membership
certificate, but shall remain jointly and severally liable with the assignee until the shares
or certificates are fully paid up.

History: Laws 1939, ch. 164, § 29; 1941 Comp., § 54-1429; 1953 Comp., § 51-15-29.

                                               ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 30 to 32; 18A Am. Jur. 2d Corporations §§ 249 to 257.

Liability of member or former member of marketing or purchasing cooperative for its
debts or losses, 96 A.L.R.3d 1243.

18 C.J.S. Corporations §§ 414 to 432.

53-4-30. Expulsion.

    A member may be expelled by the vote of a majority of the members voting at a
regular or special meeting. The member against whom the charges are to be preferred
shall be informed thereof in writing at least 10 days in advance of the meeting, and shall
have an opportunity to be heard in person or by counsel at said meeting. On decision of
the association to expel a member, the board of directors shall purchase the member's
holdings at par value, if and when there are sufficient surplus funds.

History: Laws 1939, ch. 164, § 30; 1941 Comp., § 54-1430; 1953 Comp., § 51-15-30.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 15, 26; 18A Am. Jur. 2d Corporations §§ 935 to 938, 940 to 942, 944 to
947.

53-4-31. Allocation and distribution of net savings.

    At least once a year the members and/or the directors, as the articles or by-laws
[bylaws] may provide, shall apportion the net savings of the association in the following
order:

    A. not less than ten percent (10%) shall be placed in a surplus fund until such time
as the fund shall equal at least fifty percent (50%) of the paid-up capital;

    B. interest-dividends, within the limitations of Section 22 [53-4-22 NMSA 1978] may
be paid upon share capital, or, if the by-laws [bylaws] so provide, upon the membership
certificates of a nonshare association;

    C. a portion of the remainder, as determined by the articles or by-laws [bylaws],
shall be allocated to an educational fund to be used in teaching cooperation, and a
portion may also be allocated to funds for the general welfare of the members of the
association;

    D. the remainder shall be allocated at the same uniform rate to all patrons of the
association in proportion to their individual patronage, provided that:
         (1) in the case of a member patron, his proportionate amount of savings
return shall be distributed to him;

         (2) in the case of a subscriber, his proportionate amount of savings return
may, as the articles or by-laws [bylaws] provide, be distributed to him or credited to his
account until the amount of capital subscribed for has been fully paid;

         (3) in the case of nonmember patrons their proportionate amount of savings
returns shall be set aside in a general fund for such patrons and shall be allocated to
individual nonmember patrons only upon request and presentation of evidence of the
amount of their patronage. Any savings return so allocated shall be credited to such
patron towards payment of the minimum amount of share or membership capital
necessary for membership. When a sum equal to this amount has been accumulated at
any time within a period of time specified in the by-laws [bylaws], such patron shall be
deemed and become a member of the association if he so agrees or requests, and
complies with any provisions in the bylaws for admission to membership. The
certificates of shares or membership to which he is entitled shall then be issued to him;

         (4) if within any periods of time specified in the articles or by-laws [bylaws], (a)
any subscriber has not accumulated and paid in the amount of capital subscribed for; or
(b) any nonmember patron has not accumulated in his individual account the sum
necessary for membership; or (c) any nonmember patron has accumulated the sum
necessary for membership but does not request or agree to become a member or fails
to comply with the provisions of the bylaws, if any, for admission to membership, then:
the amounts so accumulated or paid in and any part of the general fund for nonmember
patrons, which has not been allocated to individual nonmember patrons, shall go to the
educational fund and thereafter no member or other patron shall have any rights in said
paid in [paid-in] capital or accumulated savings returns as such.

History: Laws 1939, ch. 164, § 31; 1941 Comp., § 54-1431; 1953 Comp., § 51-15-31.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations § 22; 18B Am. Jur. 2d Corporations §§ 1168, 1169.

Distribution of funds by nonprofit corporation absent dissolution, 51 A.L.R.3d 1318.

18 C.J.S. Corporations §§ 293 to 304.

53-4-32. Bonding.
    Every individual acting as officer or employee of an association and handling funds
or securities amounting to one thousand dollars ($1,000.00) or more, in any one year,
shall be covered by an adequate bond as determined by the board of directors, and at
the expense of the association; and the by-laws [bylaws] may also provide for the
bonding of other employees or officers.

History: Laws 1939, ch. 164, § 32; 1941 Comp., § 54-1432; 1953 Comp., § 51-15-32.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 63A Am. Jur. 2d Public Officers and
Employees §§ 491, 499, 500.

53-4-33. Books; auditing.

    To record its business operation, every association shall keep a set of books, which
shall be audited at the end of each fiscal year by an experienced bookkeeper or
accountant who shall not be an officer or director. Where the annual business amounts
to less than ten thousand dollars [($10,000)], the audit may be performed by an auditing
committee of three, who shall not be directors, officers, or employees. A written report of
the audit, including a statement of the amount of business transacted with members,
and the amount transacted with nonmembers, the balance sheet, and the income and
expenses, shall be submitted to the annual meeting of the association.

History: Laws 1939, ch. 164, § 33; 1941 Comp., § 54-1433; 1953 Comp., § 51-15-33.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 14, 21; 18A Am. Jur. 2d Corporations §§ 348 to 354, 356 to 363, 365 to
368, 381, 383, 384.

18 C.J.S. Corporations §§ 110, 332 to 338.

53-4-34. Annual report.

    A. An association shall, annually within sixty days of the close of its operations for
that year, make a report of its condition sworn to by the president and the secretary,
which report shall be filed with the public regulation commission [secretary of state]. The
report shall state:
         (1) the name and principal address of the association;

         (2) the names and addresses of the officers and directors and the name and
address of the initial registered agent and registered office of the association;

         (3) the amount and nature of the association's authorized, subscribed and
paid-in capital, the number of its shareholders, the par value of its shares and the rate at
which any interest-dividends have been paid. For nonshare associations, the annual
report shall state the total number of members, the number admitted or withdrawn
during the year and the amount of membership fees received; and

         (4) the receipts, expenditures, assets and liabilities of the association.

    B. A copy of the report required pursuant to Subsection A of this section shall be
kept on file at the principal office of the association.

    C. A person who signs or verifies a report required pursuant to Subsection A of this
section that contains a false statement, known to that person to be false, shall upon
conviction be fined not exceeding five hundred dollars ($500) or imprisoned not
exceeding one year, or both.

    D. Every association shall pay an annual fee of ten dollars ($10.00) upon filing the
report.

    E. A supplemental report shall be filed with the public regulation commission
[secretary of state] within thirty days if, after filing of the annual report, a change is made
in:

         (1) the mailing address, street address, rural route number, box number, or
the geographical location of its registered office in this state;

         (2) the name of the agent at the address of the registered office upon whom
process against the association may be served; or

         (3) the name or address of any of the directors or officers of the association or
the date when term of office expires.

History: Laws 1939, ch. 164, § 34; 1941 Comp., § 54-1434; 1953 Comp., § 51-15-34;
Laws 1993, ch. 311, § 6; 2001, ch. 200, § 18.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2001 amendment, effective July 1, 2001, in Subsection A, substituted "public
regulation commission" for "state corporation commission" in the preliminary language,
inserted "of the association" at the end of Paragraph (2), inserted "the association's"
preceding "authorized" in Paragraph (3); inserted the Subsection B designation and
renumbered the remaining subsections accordingly; inserted "required pursuant to
Subsection A of this section" in Subsection B; substituted "A person who signs or
verifies a report required pursuant to Subsection A of this section that contains a false
statement" for "Any person who subscribes or makes oath to such report containing a
false statement"; and added Subsection E.

The 1993 amendment, effective July 1, 1993, added the Subsections A and B
designations and added Subsection C; in Subsection A(2), deleted "occupations and
date of expiration of the terms" following "addresses" and substituted "and the name
and address of its initial registered agent and registered office" for "and their
compensation, if any"; and made minor stylistic changes throughout the section.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations § 362.

19 C.J.S. Corporations § 542.

53-4-35. Notice of delinquent reports; forfeitures; reinstatement.

    If an association fails to make a report within the required period of sixty days, the
public regulation commission [secretary of state] shall, within sixty days from the
expiration of the period, send the association a registered letter, directed to its principal
office, stating the delinquency and its consequences. If the association fails to file the
report within sixty days from the mailing of such notice, the commission [secretary of
state] shall notify it by registered letter that its corporate rights stand forfeited, shall
remove its name from its list of live corporations and notify the attorney general, who
shall cause its affairs to be wound up. If, within sixty days from such forfeiture, the
association files the report and pays a penalty of ten dollars ($10.00) and all actual
expenses of any suit begun to wind it up, the commission [secretary of state] shall set
aside the forfeiture, the suit shall be dismissed and the association shall be reinstated to
its former rights and legal status.

History: Laws 1939, ch. 164, § 35; 1941 Comp., § 54-1435; 1953 Comp., § 51-15-35;
2001, ch. 200, § 19.
                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2001 amendment, effective July 1, 2001, substituted "public regulation
commission" for "state corporation commission of New Mexico"; and substituted
"commission" for "state corporation commission" and "corporation commission".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations § 22; 19 Am. Jur. 2d Corporations §§ 2734, 2740, 2741, 2746, 2788 to
2805, 2807 to 2810.

19 C.J.S. Corporations § 542.

53-4-36. Voluntary dissolution.

    An association may, at any regular or special meeting legally called, be directed to
dissolve by a vote of two-thirds of the entire membership. By a vote of a majority of the
members voting three of their number shall be designated as trustees, who shall, on
behalf of the association and within a time fixed in their designation or within any
extension thereof, liquidate its assets, pay its debts and expenses; return to the
members the par value of their shares or of their membership certificates; return to
subscribers the amount paid on their subscriptions, to patrons the amount of savings
returns credited to their accounts toward purchase of shares or membership certificates;
and distribute any surplus in either or both of the following ways, as the articles may
provide:

    A. among those patrons who have been members or subscribers at any time during
the past six years, on the basis of their patronage during that period;

    B. as a gift to any consumers' cooperative association or other nonprofit enterprise
which may be designated in the articles.

History: Laws 1939, ch. 164, § 36; 1941 Comp., § 54-1436; 1953 Comp., § 51-15-36.

                                               ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations § 22; 19 Am. Jur. 2d Corporations §§ 2740, 2741, 2746, 2748, 2750 to
2756, 2758 to 2762, 2764 to 2766, 2770 to 2778, 2780, 2781, 2785, 2834, 2880 to
2883.

19 C.J.S. Corporations §§ 811 to 882.

53-4-37. Use of name "cooperative"; penalty.

    A. Only the following entities are entitled to use the term "cooperative" or an
abbreviation or derivation of that term as part of their business names or to represent
themselves as conducting business on a cooperative basis:

         (1) associations organized pursuant to the Cooperative Association Act;

         (2) groups organized on a cooperative basis pursuant to any other law of this
state; and

         (3) foreign corporations authorized to do business in this state on a
cooperative basis pursuant to the Cooperative Association Act or any other law of this
state.

    B. Any person, firm or corporation violating the provisions of Subsection A of this
section shall be guilty of a misdemeanor, punishable by a fine of not more than two
hundred dollars ($200), and the attorney general or any aggrieved individual or
association or group organized on a cooperative basis may sue to enjoin an alleged
violation of this section.

    C. Should the courts or the attorney general or the public regulation commission
[secretary of state] decide that any person, firm or corporation, using the name
"cooperative" prior to these provisions and not organized on a cooperative basis, is
entitled to continue in such use, any such business shall always place immediately after
its name, the words "does not comply with the cooperative laws of New Mexico" in the
same kind of type and in letters not less than two-thirds as large as those used in the
term "cooperative".

History: Laws 1939, ch. 164, § 37; 1941 Comp., § 54-1437; 1953 Comp., § 51-15-37;
2001, ch. 200, § 20.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Cross references. -- For optional use of "cooperative" in title of cooperative marketing
association of agricultural producers, see 76-12-7 NMSA 1978.

The 2001 amendment, effective July 1, 2001, added the subsection designations;
substituted "pursuant to the Cooperative Association Act" for "hereunder" in Paragraph
A(1) and for "under this" in Paragraph A(3); and substituted "public regulation
commission" for "state corporation commission" in Subsection C.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 5 to 9.

18 C.J.S. Corporations §§ 98 to 105.

53-4-38. Promotion expenses; limitations; penalty.

    An association shall not, directly or indirectly, use any of its funds, nor issue shares
nor incur any indebtedness, for the payment of any promotion expenses or
compensation for the organization of the association in excess of 5% of the amount paid
in for the shares or membership certificates involved in the promotion transaction. Any
association giving, or any person, firm, corporation or association receiving, such
promotion commission [secretary of state] in violation of this section shall be guilty of a
misdemeanor, and upon conviction thereof, shall be fined not less than one hundred
dollars ($100.00) nor more than five hundred dollars ($500.00).

History: Laws 1939, ch. 164, § 38; 1941 Comp., § 54-1438; 1953 Comp., § 51-15-38.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations §§ 98, 101
to 105.

18 C.J.S. Corporations §§ 67 to 97.

53-4-39. Spreading false reports; penalty.

    Any person, firm, corporation or association which maliciously and knowingly
spreads false reports about the management or finances of any association shall be
guilty of a misdemeanor and be subject to a fine of not less than one hundred dollars
($100.00) and not more than five hundred dollars ($500.00) for each such offense.

History: Laws 1939, ch. 164, § 39; 1941 Comp., § 54-1439; 1953 Comp., § 51-15-39.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1885,
1887, 1888, 2130.

19 C.J.S. Corporations § 543.

53-4-40. Existing cooperative corporations.

    A group incorporated under another law of this state and operating on a cooperative
basis may elect by a vote of two-thirds of the members voting to secure the benefits of
and be bound by the provisions of the Cooperative Association Act and shall amend its
articles and bylaws not in conformity with those provisions. A certified copy of the
amended articles shall be filed with the public regulation commission [secretary of state]
and a fee of twenty-five dollars ($25.00) shall be paid.

History: Laws 1939, ch. 164, § 40; 1941 Comp., § 54-1440; 1953 Comp., § 51-15-40;
2001, ch. 200, § 21.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.
The 2001 amendment, effective July 1, 2001, substituted "the provisions of the
Cooperative Association Act" for "these provisions" and substituted "public regulation
commission" for "corporation commission".

53-4-41. Foreign corporations.

    A foreign corporation operating on a cooperative basis and complying with the
applicable laws of the state in which it is organized is entitled to receive from the public
regulation commission [secretary of state] a certificate authorizing it to do business in
this state as a foreign cooperative corporation.

History: Laws 1939, ch. 164, § 41; 1941 Comp., § 54-1441; 1953 Comp., § 51-15-41;
2001, ch. 200, § 22.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2001 amendment, effective July 1, 2001, substituted "public regulation
commission" for "corporation commission".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations § 513.

19 C.J.S. Corporations § 901 et seq.

53-4-42. Legality declared; not in restraint of trade.

    No association, or method or act thereof which complies with these provisions shall
be deemed a conspiracy or combination in restraint of trade or an illegal monopoly, or
an attempt to lessen competition or fix prices arbitrarily, or to accomplish any improper
or illegal purposes.

History: Laws 1939, ch. 164, § 42; 1941 Comp., § 54-1442; 1953 Comp., § 51-15-42.

                                               ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Cooperative
Associations §§ 30, 34.

Construction of § 1 of the Capper-Volstead Act (7 U.S.C. § 291) authorizing persons
engaged in production of agricultural products to act together in association, 20 A.L.R.
Fed. 924.

53-4-43. Laws not applicable.

    No law of this state conflicting or inconsistent herewith shall, to the extent of the
conflict or inconsistency be construed as applicable to associations formed hereunder.

History: Laws 1939, ch. 164, § 43; 1941 Comp., § 54-1443; 1953 Comp., § 51-15-43.

53-4-44. Subsequent laws.

    No law of this state subsequent to these provisions shall be construed as amending
or repealing these provisions or any part thereof unless such amendment or repeal is
expressly stated therein.

History: Laws 1939, ch. 164, § 44; 1941 Comp., § 54-1444; 1953 Comp., § 51-15-44.

53-4-45. Taxation.

    Associations formed under Chapter 53, Article 4 NMSA 1978 and foreign
corporations admitted under Section 53-4-41 NMSA 1978 to do business in this state
shall pay an annual license fee of twenty dollars ($20.00).

History: Laws 1939, ch. 164, § 45; 1941 Comp., § 54-1445; 1953 Comp., § 51-15-45;
Laws 1993, ch. 311, § 7.

                                               ANNOTATIONS

The 1993 amendment, effective July 1, 1993, substituted "under Chapter 53, Article 4
NMSA 1978" for "hereunder", "53-4-41 NMSA 1978" for "41", and "twenty dollars
($20.00)" for "five dollars ($5.00)".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2802,
2824, 2839.

ARTICLE 5
Corporate Reports

53-5-1. Short title.
    Chapter 53, Article 5 NMSA 1978 may be cited as the "Corporate Reports Act".

History: 1953 Comp., § 51-21-1, enacted by Laws 1959, ch. 181, § 1; 1998, ch. 108, §
23.

                                               ANNOTATIONS

The 1998 amendment, effective January 1, 1999, substituted "Chapter 53, Article 5
NMSA 1978" for "This act" at the beginning of the section.

Law reviews. -- For note, "The Entry and Regulation of Foreign Corporations Under
New Mexico Law and Under the Model Business Corporation Act," see 6 Nat. Res. J.
617 (1966).

For comment, "Coal Taxation in the Western States: The Need for a Regional Tax
Policy," see 16 Nat. Res. J. 415 (1976).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

53-5-2. Corporate and supplemental reports.

    A. Pursuant to rules that the secretary of state adopts to implement this section, a
domestic or foreign corporation that is not exempted shall file in the office of the
secretary of state within thirty days after the date on which its certificate of incorporation
or its certificate of authority, as the case may be, is issued by the secretary of state, and
biennially thereafter on or before the fifteenth day of the fourth month following the end
of its taxable year, a corporate report in the form prescribed and furnished to the
corporation not less than thirty days prior to such reporting date, by the secretary of
state, and signed and sworn to by the chair of the board, president, vice president,
secretary, principal accounting officer or authorized agent of the corporation, showing
among other information prescribed by the secretary of state:

         (1) the current status of:

             (a) the name of the corporation;

             (b) the mailing address and: 1) street address if within a municipality; or 2)
rural route number and box number or the geographical location, using well-known
landmarks, if outside a municipality, of the corporation's registered office in this state
and the name of the agent upon whom process against the corporation may be served;

             (c) the names and addresses of all the directors and officers of the
corporation and when the term of office of each expires;
             (d) the address of the corporation's principal place of business within the state
and, if a foreign corporation, the address of its registered office in the state or country
under the laws of which it is incorporated and the principal office of the corporation, if
different from the registered office; and

             (e) the date for the next annual meeting of the shareholders for the election of
directors; and

         (2) the corporation's taxpayer identification number issued by the revenue
processing division of the taxation and revenue department.

    B. When the secretary of state receives a report required to be filed by a corporation
under the Corporate Reports Act, the secretary of state shall determine if the report
conforms to the requirements of this section. If the secretary of state finds that the
report conforms, it shall be filed. If the secretary of state finds that the report does not
conform, the secretary of state shall promptly return the report to the corporation for any
necessary corrections, in which event the penalties prescribed in the Corporate Reports
Act for failure to file the report in the time provided shall not apply if the report is
corrected and returned to the secretary of state within thirty days from the date on which
it was mailed to the corporation by the secretary of state.

    C. The secretary of state may refuse to file a corporate report or a supplemental
report received from a corporation that has not paid all fees, including penalties and
interest due and payable, to the secretary of state at the time of filing. However, if the
corporation and the secretary of state are engaged in any adversary proceeding over
the assessment of any fees, the secretary of state shall file the report of the corporation
upon its submission to the secretary of state.

    D. A supplemental report shall be filed with the secretary of state within thirty days
if, after the filing of the corporate report required under the Corporate Reports Act, a
change is made in:

         (1) the mailing address, street address, rural route number and box number
or the geographical location of its registered office in this state and the name of the
agent upon whom process against the corporation may be served;

         (2) the name or address of any of the directors or officers of the corporation or
the date when the term of office of each expires; or

         (3) its principal place of business within or without the state.

History: 1953 Comp., § 51-21-1, enacted by Laws 1978, ch. 9, § 1; 1979, ch. 181, § 1;
1983, ch. 304, § 4; 1989, ch. 386, § 1; 2001, ch. 200, § 27; 2003, ch. 318, § 5; 2018, ch.
35, § 1.

                                               ANNOTATIONS
Cross references. -- For filing fee, see 53-2-1 NMSA 1978.

For penalty for failure to file corporate reports, see 53-5-7 NMSA 1978.

The 2018 amendment, effective July 1, 2018, changed the biennial report due date for
certain corporations; and in Subsection A, after "the fifteenth day of the", deleted "third"
and added "fourth"; and replaced "public regulation commission" or "commission" with
"secretary of state" throughout the section.

The 2003 amendment, effective July 1, 2003, deleted "or franchise taxes" following "of
any fees" in Subsection C; inserted "and" following "rural route number" in Paragraph
D(1).

The 2001 amendment, effective July 1, 2001, substituted "public regulation
commission" for "state corporation commission" throughout the section; in Subsection
A, deleted "state corporation" preceding "commission" in the preliminary language,
substituted "the address of the corporation's principal place" for "the character of its
business and the address of its principal place" in Paragraph (1)(d); in Subsection D,
deleted Paragraph (1), which read "the name of the corporation", and renumbered the
remaining paragraphs accordingly, and deleted "the character of its business and" from
the beginning of Paragraph (3).

The 1989 amendment, effective January 1, 1990, in Subsection A substituted all of the
present language of Subparagraph (1)(b) preceding "if outside a municipality" for "the
mailing address, and street address if within a municipality, or a description of the
geographical location", deleted former Paragraph (2), which provided for reporting
information on the number of shares, value and location of property, gross receipts and
financial condition, and redesignated former Paragraph (3) as present Paragraph (2);
and in Subsection D(2) substituted "rural route number, box number or" for "or the
description of".

The 1983 amendment, effective June 17, 1983, substituted the present catchline for
"Annual and supplemental corporate reports"; in the introductory language of
Subsection A inserted "Pursuant to . . . this section," substituted "biannually" for
"annually" and inserted "corporate" preceding "report" near the middle of the
introductory language, and inserted "chairman of the board" and "among other
information prescribed by the commission" near the end of the introductory language;
substituted "corporation" for "company" in Subparagraph (c) of Paragraph (1) of
Subsection A, substituted "shareholders" for "stockholders" in Subparagraph (e) of
Paragraph (1), substituted "taxable" for "preceding fiscal" and inserted "the following
information for the reporting period of the report" in the introductory language of
Paragraph (2), rewrote Subparagraph (a) of Paragraph (2), substituted "reporting
period" for "preceding year" in Subparagraph (c) of Paragraph (2), substituted
"authorized shares" for "capital stock" in Subparagraph (e) of Paragraph (2); inserted
"state corporation" in the first sentence of Subsection B; inserted "state corporation,"
substituted "may" for "shall," substituted "a corporate" for "an annual," and deleted "and
franchise taxes" preceding "including" in the first sentence of Subsection C, deleted
"annual" preceding "report" in the last sentence of Subsection C; inserted "state
corporation" and substituted "corporate" for "annual" preceding "report" in the
introductory language of Subsection D; and deleted Subsection E, which read: "No
annual or supplemental report required to be filed under this section shall be deemed to
have been filed if the fees accompanying the report have been paid by check, and
which check is dishonored upon presentation."

Law reviews. -- For article, "Attachment in New Mexico - Part I," see 1 Nat. Res. J.
303 (1961).

For note, "The Entry and Regulation of Foreign Corporations Under New Mexico Law
and Under the Model Business Corporation Act," see 6 Nat. Res. J. 617 (1966).

For article, "1975 Amendments to the New Mexico Business Corporations Act," see 6
N.M. L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 333,
339.

19 C.J.S. Corporations § 542.

53-5-3. Public regulation commission [secretary of state] to supply
definitions.

    The public regulation commission [secretary of state] shall prepare and make
available with appropriate corporate report forms a list of definitions of corporate and
financial terms used in the annual corporate reports.

History: 1953 Comp., § 51-21-3, enacted by Laws 1959, ch. 181, § 3; 2001, ch. 200, §
28.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.
The 2001 amendment, effective July 1, 2001, substituted "Public regulation
commission" for 'Corporation commission" throughout the section.

Law reviews. -- For note, "The Entry and Regulation of Foreign Corporations Under
New Mexico Law and Under the Model Business Corporation Act," see 6 Nat. Res. J.
617 (1966).

53-5-4. Exempt corporations.

    The following corporations shall be exempt from filing a report pursuant to the
Corporate Reports Act:

    A. state banks or insurance companies incorporated under the laws of New Mexico;

    B. insurance companies which are incorporated under the laws of the United States,
other states or foreign countries, and which are licensed to transact business in the
state of New Mexico;

    C. national banks; and

    D. nonprofit corporations.

History: 1953 Comp., § 51-21-4, enacted by Laws 1959, ch. 181, § 4; 1969, ch. 154, §
1; 1977, ch. 103, § 4.

                                               ANNOTATIONS

A capital stock building and loan association organized under the general
corporation laws of this state cannot be a bank within the meaning of this section and is
not exempt from the reporting requirements of 53-5-2 NMSA 1978. 1965 Op. Att'y Gen.
No. 65-62.

A mutual building and loan association is not a bank within the meaning of this
section and is not exempt from the reporting requirements of 53-5-2 NMSA 1978. 1965
Op. Att'y Gen. No. 65-62.

A financial corporation for the purposes of this act is a corporation treated as a
financial corporation for the purposes of the Gross Receipts and Compensating Tax Act
(Sections 7-9-1 to 7-9-90 NMSA 1978) and the former Banking and Financial
Corporations Tax Act (Sections 7-6-1 to 7-6-9 NMSA 1978) (see Corporate Income Tax
Act, 7-2A-1 NMSA 1978 et seq.). If there is any doubt as to the status of a corporation,
the corporation commission (now secretary of state) may require the corporation to
submit proof that it is being treated as a financial corporation by the bureau of revenue
(now taxation and revenue department). 1970 Op. Att'y Gen. No. 70-30 (rendered prior
to 1977 amendment).
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations § 14.

53-5-5. Corporate reports; affirmation; penalty.

    A. All reports required to be filed with the commission [secretary of state] pursuant
to the Corporate Reports Act shall contain the following affirmation: "Under penalties of
perjury, I declare and affirm that I have examined this report, including the
accompanying schedules and statements, and that all statements contained therein are
true and correct."

    B. Any person who makes and subscribes any report required under the Corporate
Reports Act that contains a false statement, which statement is known to be false by
such person, is guilty of perjury and upon conviction shall be punished as provided for in
the perjury statutes of this state.

History: 1978 Comp., § 53-5-5, enacted by Laws 1979, ch. 181, § 2.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Cross references. -- For penalty for failure to file corporate reports, see 53-5-7 NMSA
1978.

53-5-6. Application for period of extension.

    A. A corporation may, upon application to the public regulation commission
[secretary of state] by the date upon which a report is required to be filed under the
Corporate Reports Act, petition the commission [secretary of state] for an extension of
time in which to file the required report.

    B. For good cause shown, the public regulation commission [secretary of state] may
extend for no more than a total of twelve months the date on which any return required
by the provisions of the Corporate Reports Act must be filed or the date on which the
payment of any fee is required for a specific corporation subject to the Corporate
Reports Act. No extension shall prevent the accrual of interest as otherwise provided by
law.
    C. The public regulation commission [secretary of state] shall, when an extension of
time has been granted a corporation under the United States Internal Revenue Code of
1986 for the time in which to file a return, grant the corporation the same extension of
time to file the required return and to pay the required fees and tax if a copy of the
approved federal extension of time is attached to the corporation's annual report. No
extension of time granted shall prevent the accrual of interest as otherwise provided by
law.

    D. Nothing contained in this section shall prevent the collection of any tax, penalty
or interest due upon the failure of any corporation to submit the required report.

History: 1953 Comp., § 51-21-6, enacted by Laws 1959, ch. 181, § 6; 1961, ch. 197, §
7; 1977, ch. 103, § 6; 1979, ch. 181, § 3; 1989, ch. 102, § 1; 2001, ch. 200, § 29.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Cross references. -- For the United States Internal Revenue Code, see 26 U.S.C. § 1
et seq.

The 2001 amendment, effective July 1, 2001, substituted "public regulation
commission" for "state corporation commission" throughout the section.

The 1989 amendment, effective January 1, 1990, substituted "by the date" for "not less
than fifteen days prior to the date" in Subsection A and "state corporation commission"
for "commission" throughout the section.

53-5-7. Failure to file corporate reports; penalty.

    A. A domestic corporation required to file an annual corporate report, as provided in
the Corporate Reports Act, that fails to submit the report within the time prescribed for a
reporting period shall incur a civil penalty of two hundred dollars ($200) in addition to the
fee for filing the report, such civil penalty to be paid upon filing the report. Sixty days
after written notice of failure to file a report has been mailed to the corporation's mailing
address as shown in the last corporate report filed with the secretary of state, the
corporation shall have its certificate of incorporation canceled by the secretary without
further proceedings, unless the report is filed and all fees and penalties are paid within
that sixty-day period.

    B. A foreign corporation required to file an annual corporate report that fails to
submit the report within the time prescribed for any reporting period shall incur a civil
penalty of two hundred dollars ($200) in addition to the fee for filing the report. The civil
penalty shall be paid upon filing the report. Sixty days after written notice of failure to file
a report has been mailed to the corporation's mailing address as shown in the last
corporate report filed with the secretary of state, the corporation shall have its certificate
of authority to do business in this state canceled by the secretary without further
proceedings, unless the report is filed and all fees and penalties are paid within that
sixty-day period. Nothing in this section authorizes a forfeiture of the right or privilege of
engaging in interstate commerce.

    C. A domestic or foreign corporation not exempted from filing a supplemental report,
as provided in the Corporate Reports Act, that fails to submit the required report within
the time prescribed for a reporting period shall incur a civil penalty of two hundred
dollars ($200) in addition to the fee for filing the report, such civil penalty to be paid
upon filing the report.

    D. An order of the secretary of state may be appealed to the district court of Santa
Fe county within sixty days of the date it was issued by the secretary.

    E. If a report required under the Corporate Reports Act is mailed, the secretary of
state shall deem the date shown on the postmark the date of submission when
determining whether a filing is timely.

History: 1953 Comp., § 51-21-7, enacted by Laws 1959, ch. 181, § 7; 1961, ch 63, § 1;
1967, ch. 252, § 2; 1969, ch. 22, § 3; 1977, ch. 103, § 7; 1979, ch. 181, § 4; 1983, ch.
304, § 5; 1988, ch. 42, § 1; 2001, ch. 200, § 30; 2003, ch. 318, § 6; 2015, ch. 66, § 4.

                                               ANNOTATIONS

The 2015 amendment, effective July 1, 2015, authorized the secretary of state to
cancel certificates of incorporation when corporations fail to file corporate reports;
changed "public regulation commission" to "secretary of state", and "commission" to
"secretary" throughout the section; and in Subsection E, after "shall", deleted "allow
three additional days when considering" and added "deem the date shown on", after
"postmark", deleted "as", and after "determining", deleted "if" and added "whether".

The 2003 amendment, effective July 1, 2003, substituted "A" for "Every" at the
beginning of Subsections A and C; substituted "two hundred dollars ($200)" for "one
hundred dollars ($100)" following "civil penalty of" in Subsections A to C; substituted
"and penalties" for "franchise taxes penalties and interest" following "and all fees" in
Subsections A and B; substituted "the corporation's mailing address" for "its registered
agent and also to the principal office of the corporation" following "been mailed to" in
Subsection A; substituted "the corporation's mailing address as" for "a corporation's
registered agent and also either to the principal office of the corporation in the state or
county under the laws of which it is incorporated or to the principal office of the
corporation as each address is" following "been mailed to" in Subsection B.

The 2001 amendment, effective July 1, 2001, inserted "public regulation" preceding
"commission" in the second sentence of Subsection A and in Subsection D; deleted "as
provided in the Corporate Reports Act" following "annual corporate report" in Subsection
B; and substituted "public regulation commission" for "state corporation commission" in
Subsections B and E.

The 1988 amendment, effective May 18, 1988, corrected a misspelling in Subsection A
and substituted "shall allow three additional days when considering the postmark" for
"shall use the date of the postmark" in Subsection E.

The 1983 amendment, effective June 17, 1983, substituted "for any reporting period"
for "in any year" in the first sentences of Subsections A and B and in Subsection C,
substituted "one hundred dollars ($100)" for "twenty-five dollars ($25.00)" in the first
sentence of Subsection A, added the last sentence of Subsection A deleted "statutory"
preceding "agent" near the beginning of the second sentence of Subsection B,
substituted "corporate" for "annual" preceding "report" near the middle of the second
sentence of Subsection B, inserted "state corporation" preceding "commission" near the
middle of the second sentence of Subsection B, added "unless the report . . . sixty-day
period." at the end of the second sentence of Subsection B, deleted the former first
three sentences of Subsection D, which read: "Any domestic corporation which fails to
submit a corporate report required by the Corporate Reports Act for a period of one year
shall have its name and its records stricken from the files of the commission after
proceedings held pursuant to the Corporate Reports Act. The commission shall issue a
notice of dissolution setting a date for hearing. Service of process and notice of the
proceeding shall be by certified mail to the last known agent for service of process of
the corporation," and inserted "State Corporation" in Subsection E.

Forfeitures not favored. -- In view of the fact that forfeitures are not favored, as long
as no detriment results to the public, statutes providing for forfeiture in case of an abuse
of corporate powers or failure to carry out some statutory requirement, as the making
and filing of annual reports, will be construed liberally. State v. Sunset Ditch Co., 1944-
NMSC-004, 48 N.M. 17, 145 P.2d 219.

Effect of forfeiture on corporation's contracts. -- In a proceeding in nature of a bill
of review to vacate a decree of specific performance in favor of a corporation on the
ground that corporation, by its failure to file required reports, had forfeited right to
transact business when it negotiated for a lease, the petitioner was not entitled to aid of
the court where the company's default was known to petitioner or could have been
ascertained through reasonable diligence for presentation at time of the suit for specific
performance. Ringle Dev. Corp. v. Town of Tome Land Grant, Inc., 1945-NMSC-024, 49
N.M. 192, 160 P.2d 441.
Generally. -- The corporation department (now secretary of state) of the corporation
commission may continue, under the Corporate Reports Act of 1959, its practice of
forfeiting the right of corporations, both foreign and domestic, to transact business in
this state if they fail to file their annual report by the due date. 1960 Op. Att'y Gen. No.
60-17.

Law reviews. -- For note, "The Entry and Regulation of Foreign Corporations Under
New Mexico Law and Under the Model Business Corporation Act," see 6 Nat. Res. J.
617 (1966).

For article, "How to Stand Still Without Really Trying: A Critique of the New Mexico
Administrative Procedures Act," see 10 Nat. Res. J. 840 (1970).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1885,
1887, 1888, 2130.

19 C.J.S. Corporations § 542.

53-5-7.1. Canceled corporations stricken from public regulation
commission [secretary of state] files.

    A domestic corporation whose certificate of incorporation has been canceled by the
public regulation commission [secretary of state] pursuant to Section 53-5-7 NMSA
1978 shall be stricken from the files of the commission [secretary of state] without
further proceedings. A foreign corporation whose certificate of authority to do business
in the state has been canceled by the commission [secretary of state] pursuant to
Section 53-5-7 NMSA 1978 shall be stricken from the files of the commission [secretary
of state] without further proceedings.

History: Laws 2001, ch. 200, § 26.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Effective dates. -- Laws 2001, ch. 200, § 101 made Laws 2001, ch. 200, § 26 effective
July 1, 2001.
Recompilations. -- Laws 2001, ch. 200, § 26 was erroneously compiled as 53-4-6.4
NMSA 1978 and was recompiled as 53-5-7.1 NMSA 1978.

53-5-8. Public regulation commission [secretary of state] may
furnish forms; release of information; penalty.

    A. The public regulation commission [secretary of state] may, upon application,
furnish the necessary blank forms used in the preparation of the annual corporate
reports.

    B. The public regulation commission [secretary of state] shall provide pursuant to
the provisions of the Public Records Act [Chapter 14, Article 3 NMSA 1978] for the
retention, storage and destruction of annual corporate reports filed with the commission
[secretary of state].

    C. Information obtained from reports filed pursuant to the provisions of the
Corporate Reports Act shall be made available to interested persons during proper
hours, except that data contained in Paragraph (2) of Subsection A of Section 53-5-2
NMSA 1978 shall not be released unless in statistical form classified to prevent
identification of particular corporations.

    D. All reports required under the Corporate Reports Act may be used as evidence at
any trial or hearing of the public regulation commission.

    E. All reports required under the Corporate Reports Act shall be made available to
the revenue processing division of the taxation and revenue department upon written
request and the revenue processing division shall be subject to the same restrictions
upon revealing the information as are imposed by this section upon the public regulation
commission [secretary of state].

    F. Any other state agency or department or United States agency or department
upon written request to the public regulation commission [secretary of state] may
examine reports filed with the commission [secretary of state] upon a showing that the
corporate reports sought to be examined are germane to an investigation being
conducted by the petitioning agency or department, and any information revealed is
subject to Subsection G of this section.

    G. Any person who releases information contrary to the provisions of this section is
guilty of a misdemeanor and upon conviction shall be punished by a fine of not more
than one thousand dollars ($1,000) nor less than one hundred dollars ($100) or by
imprisonment in the county jail not more than ninety days nor less than thirty days or by
both fine and imprisonment in the discretion of the judge.

History: 1953 Comp., § 51-21-8, enacted by Laws 1959, ch. 181, § 8; 1961, ch. 152, §
2; 1977, ch. 103, § 8; 2001, ch. 200, § 31.
                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2001 amendment, effective July 1, 2001, substituted "public regulation
commission" for "state corporation commission" in the section heading and Subsection
A; inserted "public regulation" preceding "commission" throughout the section; updated
the internal reference in Subsection C; in Subsection E, substituted "the revenue
processing division of the taxation and revenue department" for "bureau of revenue"
and "revenue processing division shall be subject" for "bureau shall be subject"; and
deleted "concerning the release of such information contrary to law by any person in the
requesting agency or department" from the end of Subsection F.

Examination of reports filed prior to effective date of act. -- As to reports filed
previous to the effective date of the Corporate Reports Act, the corporation commission
(now secretary of state) has no power to permit the examination of such reports except
under the circumstances set out in 51-13-11, 1953 Comp. (repealed by Laws 1959, ch.
181, § 10), i.e., at a hearing of the commission or of any court under the provisions of
the act. 1960 Op. Att'y Gen. No. 60-244 (rendered under former law).

Disclosing date of forfeiture for failure to pay franchise tax. -- Analysis of 53-3-2
and 53-3-3 NMSA 1978 (now 53-3-1 NMSA 1978) reflects that disclosure of the date of
a corporation's forfeiture would in no way circumvent nor violate that which is
confidential. The date of forfeiture or reinstatement of a corporation's right to do
business in New Mexico for failure to pay franchise tax is public information, may be
disclosed to interested parties and is not part of 53-5-2B NMSA 1978 data. 1968 Op.
Att'y Gen. No. 68-104 (rendered under former law).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations § 15.

19 C.J.S. Corporations § 542.

53-5-9. Dormant corporations; statement in lieu of corporate report.

    A. Whenever a corporation is no longer engaged in active business in this state or
in carrying out the purposes of its incorporation, two of its shareholders, directors or
officers may unite in signing a statement to that effect; the statement shall be filed with
the public regulation commission [secretary of state] in lieu of the required corporate
report. Upon the filing of this statement and the payment of all fees and penalties, the
commission [secretary of state] is authorized to strike the name of the corporation from
the list of active corporations in this state; but this action shall not be construed in any
sense as a formal dissolution of the corporation and the corporation shall not be
relieved thereby from any outstanding obligation. A dormant corporation may be fully
revived by the resumption of active business and the filing of a corporate report.

    B. A dormant corporation may continue in dormant status by filing a statement of
renewal every five years to the effect that it is not engaged in active business in this
state and is not carrying out the purposes of its incorporation. Sixty days after written
notice of failure to file a statement of renewal has been mailed to its registered agent
and also to the principal office of the corporation as shown in the last corporate report
filed with the commission [secretary of state], the corporation shall have its certificate of
incorporation or authority canceled by the commission [secretary of state] without
further proceedings unless the statement of renewal is filed and all fees are paid within
that sixty-day period.

History: 1953 Comp., § 51-21-9, enacted by Laws 1959, ch. 181, § 9; 1983, ch. 304, §
6; 2001, ch. 200, § 32; 2003, ch. 318, § 7.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, substituted "and penalties" for "franchise
taxes penalties and interest" following "of all fees" in Subsection A.

The 2001 amendment, effective July 1, 2001, substituted "corporate report" for "annual
report" in the section heading; in Subsection A, inserted "with the public regulation
commission" in the first sentence, deleted "state corporation" preceding "commission" in
the second sentence, substituted "A dormant corporation may" for "Any corporation in
this class may" in the third sentence, deleted "by provision of this section" from the end
of the subsection; and substituted "A dormant corporation may continue in dormant
status by" for "Any corporation in this class may continue in this class by" in Subsection
B.
The 1983 amendment, effective June 17, 1983, designated the former section as
present Subsection A, added Subsection B, substituted "of its shareholders" for
"stockholders" and deleted "thereof" following "officers," and substituted "corporate" for
"annual" preceding "report" in the first sentence of Subsection A, inserted "and the
payment of all fees, franchise taxes, penalties and interest" and inserted "state
corporation" in the second sentence of Subsection A, and substituted "corporate" for
"annual" in the last sentence of Subsection A.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 C.J.S. Corporations § 542.

53-5-10. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1993, ch. 318, § 6 repealed former 53-5-10 NMSA 1978, as enacted
by Laws 1991, ch. 170, § 4, requiring any person elected or appointed to a board of
directors to file an affidavit with the corporation stating that he consents to be a member
of the board of directors, effective June 18, 1993. For provisions of former section, see
the 1992 NMSA 1978 on NMOneSource.com.

ARTICLE 6
Professional Corporations

53-6-1. Purpose of act.

    The purpose of this act [53-6-1 to 53-6-13 NMSA 1978] is to provide for the
incorporation of an individual, or group of individuals, to render the same professional
service to the public for which such individuals are required by law to be licensed or to
obtain other legal authorization.

History: 1953 Comp., § 51-22-1, enacted by Laws 1963, ch. 16, § 1.

                                               ANNOTATIONS

Liability of shareholder. -- Nothing in Article 15 of the Business Corporation Act (53-
15-1 through 53-15-4 NMSA 1978) or this article permits rendering an individual
judgment against a shareholder of a professional corporation based solely upon a
failure of the corporation to properly value the stock of the corporation. For that reason,
such liability must be predicated on a theory outside the language of the statute. Morrow
v. Cooper, 1991-NMCA-108, 113 N.M. 246, 824 P.2d 1048.

Fraud in the inducement in shareholder agreement of professional corporation. --
Where there is fraud in the inducement to enter into a shareholder agreement, the
contract is voidable, capable of being affirmed or rejected at the option of one of the
parties, and remains in effect until the fraud by which the defrauded party had been
induced to sign is discovered. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-
NMCERT-001.

Where shareholder, without the knowledge of other shareholders, modified his
shareholder employment agreement, putting in place a more generous deferred
compensation package than the other shareholders, there is fraud in the inducement to
enter into the contract and the contract is voidable, remaining in effect until the fraud is
discovered. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.

Punitive damages for breach of fiduciary duties. -- Punitive damages are
appropriate when an actor willfully breaches fiduciary duties. Jones v. Augé, 2015-
NMCA-016, cert. denied, 2015-NMCERT-001.

Where appellant shareholder, without the knowledge of other shareholders, modified his
shareholder employment agreement, putting in place a more generous deferred
compensation package than the other shareholders, overpaid himself by hundreds of
thousands of dollars, failed to inform other shareholders of bonuses paid to himself
without appropriate basis, controlled the shareholder allocation sheets that the
shareholders used to track their compensation, failed to inform other shareholders of
material facts and information relating to business and financial affairs, knowingly
submitted incorrect information about his bonuses at shareholder meetings, and
knowingly and intentionally paid himself bonuses to the substantial economic detriment
of the other shareholders and the corporation itself, the award of punitive damages was
appropriate. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.

Contract reformation is a remedy for fraud and may form the basis for an award
of punitive damages. -- Contract reformation is an equitable remedy by which a court
will modify a written agreement to reflect the actual intent of the parties, usually to
correct fraud or mutual mistake in the writing; where a plaintiff has established a cause
of action in equity and the wrongdoer's misconduct is willful, wanton, malicious,
reckless, fraudulent and in bad faith, punitive damages are allowable to do complete
justice. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.

Where appellant shareholder, without the knowledge of other shareholders, modified his
shareholder employment agreement, putting in place a more generous deferred
compensation package than the other shareholders, overpaid himself by hundreds of
thousands of dollars, failed to inform other shareholders of bonuses paid to himself
without appropriate basis, controlled the shareholder allocation sheets that the
shareholders used to track their compensation, failed to inform other shareholders of
material facts and information relating to business and financial affairs, knowingly
submitted incorrect information about his bonuses at shareholder meetings, and
knowingly and intentionally paid himself bonuses to the substantial economic detriment
of the other shareholders and the corporation itself, appellees request to make all the
shareholder agreements equal fell squarely within the definition of the equitable remedy
of contract reformation, and the award of punitive damages was appropriate. Jones v.
Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.
Provision of medical services by corporation controlled by non-physicians. -- A
corporation, organized and controlled by nonphysicians, may provide medical services
to the general public through employed physicians, unless prohibited by statute or
unless it exercises lay control of medical judgment or engages in lay exploitation of the
medical profession in a manner prohibited by public policy. 1987 Op. Att'y Gen. No. 87-
39.

Law reviews. -- For article, "The New Mexico Professional Corporation," see 9 Nat.
Res. J. 591 (1969).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

For note, "Legal Malpractice ­ Membership in a Professional Corporation Does Not
Confer upon an Attorney-Shareholder a Limitation on Personal Liability for Attorney's
Breach of Duty: Sanders, Bruin, Coll & Worley, P.A. v. McKay Oil Corp.," see 31 N.M.L.
Rev. 637 (2001).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 192 to
195; 18B Am. Jur. 2d Corporations §§ 2043, 2120.

Practice by attorneys and physicians as corporate entities or associations under
professional service corporation statutes, 4 A.L.R.3d 383.

53-6-2. Short title.

    This act [53-6-1 to 53-6-13 NMSA 1978] may be cited as the "Professional
Corporation Act".

History: 1953 Comp., § 51-22-2, enacted by Laws 1963, ch. 16, § 2.

53-6-3. Definitions.

    As used in this act [53-6-1 to 53-6-13 NMSA 1978]:

    A. "professional service" means any type of personal service to the public which
requires, as a condition precedent to the rendering of such service, the obtaining of a
license or other legal authorization and which, prior to the passage of the Professional
Corporation Act and by reason of law, could not be performed by a corporation. The
term includes, but is not necessarily limited to, the personal services rendered by
certified public accountants, registered public accountants, chiropractors, optometrists,
dentists, osteopaths, podiatrists, architects, veterinarians, doctors of medicine, doctors
of dentistry, physicians and surgeons, attorneys-at-law and life insurance agents; and

    B. "professional corporation" means a corporation which is organized under the
Professional Corporation Act for the sole and specific purpose of rendering professional
service and which has as its shareholders only individuals who themselves are licensed
or otherwise legally authorized within this state to render the same professional service
as the corporation.

History: 1953 Comp., § 51-22-3, enacted by Laws 1963, ch. 16, § 3.

                                               ANNOTATIONS

Law reviews. -- For article, "The New Mexico Professional Corporation," see 9 Nat.
Res. J. 591 (1969).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 192 to
195; 18B Am. Jur. 2d Corporations §§ 2043, 2120.

53-6-4. Incorporation.

    One or more individuals, each of whom is licensed to render a professional service,
may incorporate a professional corporation for pecuniary profit and become
shareholders therein in the manner provided in the Business Corporation Act [Chapter
53, Articles 11 to 18 NMSA 1978]. The Business Corporation Act applies to professional
corporations. If the provisions of the Business Corporation Act conflict with the
provisions of the Professional Corporation Act, the provisions of the Professional
Corporation Act shall prevail.

History: 1953 Comp., § 51-22-4, enacted by Laws 1969, ch. 245, § 1.

                                               ANNOTATIONS

Requirements for naming dentists' professional corporations. -- Dentists may form
a professional corporation for the practice of dentistry so long as the name of the
corporation contains all of the names of the members of the professional corporation
plus the words "professional corporation" or some other word or abbreviation of a word
authorized by 53-6-6 NMSA 1978. 1969 Op. Att'y Gen. No. 69-63.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations §§ 53, 54.

Propriety, under state statutes or bar association or court rules, of formation of
multistate law partnership or professional service corporation, 6 A.L.R.4th 1251.

18 C.J.S. Corporations § 25 et seq.

53-6-5. Purposes for which incorporated.

    A professional corporation may be organized only for the purpose of rendering one
specific type of professional service and services ancillary thereto and shall not engage
in any business other than rendering the professional service which it was organized to
render and services ancillary thereto; provided, however, that a professional corporation
may own real and personal property necessary or appropriate for rendering the type of
professional service it was organized to render and may invest its funds in real estate,
mortgages, stocks, bonds and any other type of investments.

History: 1953 Comp., § 51-22-5, enacted by Laws 1963, ch. 16, § 5.

                                               ANNOTATIONS

Law reviews. -- For article, "The New Mexico Professional Corporation," see 9 Nat.
Res. J. 591 (1969).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations §§ 28, 30,
31; 18A Am. Jur. 2d Corporations §§ 192 to 198.

Propriety, under state statutes or bar association or court rules, of formation of
multistate law partnership or professional service corporation, 6 A.L.R.4th 1251.

18 C.J.S. Corporations § 28.

53-6-6. Corporate name.

    The corporate name of a professional corporation shall contain the words "limited,"
"chartered," "professional association" or "professional corporation" or shall contain an
abbreviation of those words.

History: 1953 Comp., § 51-22-6, enacted by Laws 1969, ch. 245, § 2.

                                               ANNOTATIONS

Compiler's notes. -- For requirements for naming dentists' professional corporations,
see notes to 53-6-4 NMSA 1978.

Law reviews. -- For article, "The New Mexico Professional Corporation," see 9 Nat.
Res. J. 591 (1969).

53-6-7. Professional services through officers, employees, and
agents.

    A professional corporation shall render professional services only through its
officers, employees and agents who are duly licensed or otherwise legally authorized to
render such professional services; provided, however, this section shall not be
interpreted to include in the term "employee", clerks, secretaries, bookkeepers,
technicians and other assistants who are not usually and ordinarily considered by
custom and practice to be rendering professional services to the public for which the
license is required.
History: 1953 Comp., § 51-22-7, enacted by Laws 1963, ch. 16, § 7.

                                               ANNOTATIONS

Law reviews. -- For article, "The New Mexico Professional Corporation," see 9 Nat.
Res. J. 591 (1969).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- Propriety, under state statutes or bar
association or court rules, of formation of multistate law partnership or professional
service corporation, 6 A.L.R.4th 1251.

53-6-8. Professional relationships preserved.

    The Professional Corporation Act does not modify the legal relationships, including
confidential relationships, between a person performing professional services and the
client or patient who receives such services; but the liability of shareholders shall be
otherwise limited as provided in the Business Corporation Act [Chapter 53, Articles 11
to 18 NMSA 1978] and as otherwise provided by law.

History: 1953 Comp., § 51-22-8, enacted by Laws 1969, ch. 245, § 3.

                                               ANNOTATIONS

Liability of attorney shareholder. -- Shareholder or membership status within a
professional corporation is not intended to confer upon an attorney protection from
individual liability for the attorney's own negligence or personal breach of duty. Sanders,
Bruin, Coll & Worley, P.A. v. McKay Oil Corp., 1997-NMSC-030, 123 N.M. 457, 943
P.2d 104.

Law reviews. -- For article, "The New Mexico Professional Corporation," see 9 Nat.
Res. J. 591 (1969).

For note, "Legal Malpractice - Membership in a Professional Corporation Does Not
Confer upon an Attorney-Shareholder a Limitation on Personal Liability for Attorney's
Breach of Duty: Sanders, Bruin, Coll & Worley, P.A. v. McKay Oil Corporation," see 31
N.M.L. Rev. 637 (2001).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 81 Am. Jur. 2d Witnesses § 285 et seq.

What constitutes professional services within meaning of statute preserving individual
liability of professional employees of professional corporation, association, or
partnership, 31 A.L.R.4th 898.

Professional corporation stockholders' nonmalpractice liability, 50 A.L.R.4th 1276.
7A C.J.S. Attorney and Client §§ 131, 132; 70 C.J.S. Physicians and Surgeons §§ 26,
27.

53-6-9. Issuance and transfer of shares.

    Shares of stock of a professional corporation shall be issued and transferred only to
persons who are duly licensed or legally authorized to render the professional service
for which the corporation is organized, but such shares may be transferred:

    A. by operation of law to persons or legal entities not so licensed or authorized,
subject to the requirements of the Professional Corporation Act;

    B. to a revocable trust the grantor of which is such a duly licensed or authorized
person, provided that the trust contains provisions that require the trustee, upon the
grantor's death or disqualification to render the professional service for which the
grantor was licensed or authorized, to dispose of the shares as otherwise provided in
the Professional Corporation Act; and

    C. to a tax-qualified employee benefit plan established for the exclusive benefit of
the professional corporation's employees, provided that the plan's trustee is required to
dispose of the trust's shares as provided in the Professional Corporation Act before
transfer or distribution of the shares to beneficiaries of or participants in the plan who
are not duly licensed or authorized to render the professional service for which the
corporation is organized.

History: 1953 Comp., § 51-22-9, enacted by Laws 1969, ch. 245, § 4; 1983, ch. 304, §
7.

                                               ANNOTATIONS

The 1983 amendment, effective June 17, 1983, designated Subsection A and added
Subsections B and C.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations § 21; 18A
Am. Jur. 2d §§ 381, 382, 681, 709, 733, 735.

Issues pertaining to ownership of professional corporation as affected by resignation
from corporate practice by active shareholder, 32 A.L.R.4th 921.

18 C.J.S. Corporations §§ 129 to 143.

53-6-10. Sale and transfer of shares.

    A. The articles of incorporation of any professional corporation shall provide for the
purchase by the corporation, its shareholders, or any person duly licensed or authorized
to render the service for which the corporation is organized, of all shares of its stock:
         (1) held by any person who shall have become disqualified to render the
professional service for which he was licensed or authorized; or

         (2) which devolve by operation of law upon any person or legal entity not
licensed or authorized.

    B. Any purchase of shares under Paragraph (1) of Subsection A shall be effected
within a period of thirty days after establishment of the disqualification. Any purchase of
shares under Paragraph (2) of Subsection A shall be effected within eight months from
the date of devolution. Any shares held in violation of such provisions may be cancelled
by action of the board of directors.

History: 1953 Comp., § 51-22-10, enacted by Laws 1969, ch. 245, § 5.

                                               ANNOTATIONS

Law reviews. -- For article, "The New Mexico Professional Corporation," see 9 Nat.
Res. J. 591 (1969).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1802
to 1809, 1812 to 1814.

Construction and application of provision restricting sale or transfer of corporate stock, 2
A.L.R.2d 745.

Validity of restrictions on alienation or transfer of corporate stock, 61 A.L.R.2d 1318.

18 C.J.S. Corporations §§ 217 to 292.

53-6-11. Contingent purchase or redemption price.

    If the articles of incorporation or the bylaws of a professional corporation fail to fix a
price at which the corporation or its shareholders may purchase the shares of a
deceased or disqualified shareholder, then the price for the shares shall be the book
value of the shares as of the end of the month immediately preceding the death or
disqualification of the shareholder.

History: 1953 Comp., § 51-22-11, enacted by Laws 1963, ch. 16, § 11; 1969, ch. 245, §
6.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1190,
1191.

53-6-12. Disqualification; dissolution.
    If any officer, shareholder, agent or employee of a professional corporation who has
been rendering professional service to the public becomes legally disqualified to render
the professional service within this state, or is elected to a public office that, pursuant to
existing law, is a restriction or limitation upon rendering of a professional service, or
accepts employment that, pursuant to existing law, places restriction or limitations upon
his continued rendering of the professional service, he shall sever all employment with,
and financial interest in, the professional corporation forthwith. A professional
corporation's failure to require compliance with this section shall constitute a ground for
the forfeiture of its articles of incorporation and its dissolution. When a professional
corporation's failure to comply with this section is brought to the attention of the public
regulation commission [secretary of state], the commission [secretary of state] shall
certify to the attorney general that fact for appropriate action to dissolve the professional
corporation.

History: 1953 Comp., § 51-22-12, enacted by Laws 1963, ch. 16, § 12; 2001, ch. 200, §
33.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2001 amendment, effective July 1, 2001, substituted "public regulation
commission" for "state corporation commission" in the third sentence.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2748,
2750 to 2752.

19 C.J.S. Corporations §§ 811 to 882.

53-6-13. Mergers or consolidations.

    A professional corporation shall consolidate or merge only with another domestic
professional corporation organized to render the same specific professional service.

History: 1953 Comp., § 51-22-13, enacted by Laws 1963, ch. 16, § 13; 1969, ch. 245, §
7.
                                               ANNOTATIONS

Severability. -- Laws 1963, ch. 16, § 14, provided for the severability of the act if any
part or application thereof is held invalid.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2503,
2507, 2509 to 2512, 2514, 2608 to 2615, 2618, 2621, 2623 to 2630.

Propriety, under state statutes or bar association or court rules, of formation of
multistate law partnership or professional service corporation, 6 A.L.R.4th 1251.

19 C.J.S. Corporations §§ 792 to 810.

53-6-14. Application to professional corporations.

    The provisions of the Professional Corporation Act shall apply to all professional
corporations chartered in New Mexico. Professional corporations heretofore
incorporated shall be required to file any amendments to their articles of incorporation
necessary to conform to the requirements of the Professional Corporation Act within
eight months from the effective date of this act. Any professional corporation which shall
not have filed any necessary amendments within such eight-month period shall be
involuntarily dissolved in conformity with the provisions of the Business Corporation Act
[Chapter 53, Articles 11 to 18 NMSA 1978].

History: 1953 Comp., § 51-22-14, enacted by Laws 1969, ch. 245, § 8.

                                               ANNOTATIONS

Compiler's notes. -- The phrase "this act" at the end of the second sentence
apparently means Laws 1969, ch. 245, which is compiled as 53-6-4, 53-6-6, 53-6-8, 53-
6-9, 53-6-10, 53-6-11, 53-6-13 and 53-6-14 NMSA 1978 and which was effective on
April 3, 1969.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- Propriety, under state statutes or bar
association or court rules, of formation of multistate law partnership or professional
service corporation, 6 A.L.R.4th 1251.

ARTICLE 7
Business Development Corporation (Repealed.)

53-7-1 to 53-7-17. Repealed.

                                               ANNOTATIONS
Repeals. -- Laws 1983, ch. 312, § 30, repealed 53-7-1 to 53-7-17 NMSA 1978, relating
to development credit corporations, effective April 7, 1983. For present provisions, see
53-7-18 NMSA 1978 et seq.

53-7-18. Repealed.

History: Laws 1983, ch. 312, § 1; 1998, ch. 108, § 24; repealed Laws 2005, ch. 184, §
2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-18 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 1, relating to the short title of the Business Development
Corporation Act, effective July 1, 2005. For provisions of former section, see the 2004
NMSA 1978 on NMOneSource.com.

53-7-19. Repealed.

History: Laws 1983, ch. 312, § 2; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-19 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 2, relating to definitions, effective July 1, 2005. For provisions of
former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-20. Repealed.

History: Laws 1983, ch. 312, § 3; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-20 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 3, relating to business development corporations, effective July
1, 2005. see the 2004 NMSA 1978 on NMOneSource.com.

53-7-21. Repealed.

History: Laws 1983, ch. 312, § 4; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-21 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 4, relating to corporate purpose, effective July 1, 2005. see the
2004 NMSA 1978 on NMOneSource.com.
53-7-22. Repealed.

History: Laws 1983, ch. 312, § 5; 1991, ch. 21, § 37; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-22 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 5, relating to corporation powers, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-23. Repealed.

History: Laws 1983, ch. 312, § 6; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-23 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 6, relating to requirements for incorporation, effective July 1,
2005. For provisions of former section, see the 2004 NMSA 1978 on
NMOneSource.com.

53-7-24. Repealed.

History: Laws 1983, ch. 312, § 7; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-24 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 7, relating to authorization to commence business, effective July
1, 2005. For provisions of former section, see the 2004 NMSA 1978 on
NMOneSource.com.

53-7-25. Repealed.

History: Laws 1983, ch. 312, § 8; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-25 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 8, relating to first annual meeting, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-26. Repealed.

History: Laws 1983, ch. 312, § 9; repealed Laws 2005, ch. 184, § 2.
                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-26 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 9, relating to board of directors, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-27. Repealed.

History: Laws 1983, ch. 312, § 10; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-27 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 10, relating to board of directors elections, effective July 1, 2005.
For provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-28. Repealed.

History: Laws 1988, ch. 30, § 1; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-28 NMSA 1978, as enacted by
Laws 1988, ch. 30, § 1, relating to limitation of liability, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-29. Repealed.

History: Laws 1983, ch. 312, § 12; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-29 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 12, relating to authorized capital stock, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-30. Repealed.

History: Laws 1983, ch. 312, § 13; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-30 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 13, relating to stockholders' exceptions from other laws, effective
July 1, 2005. For provisions of former section, see the 2004 NMSA 1978 on
NMOneSource.com.

53-7-31. Repealed.

History: Laws 1983, ch. 312, § 14; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-31 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 14, relating to application for membership, effective July 1, 2005.
For provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-32. Repealed.

History: Laws 1983, ch. 312, § 15; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-32 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 15, relating to duration of membership, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-33. Repealed.

History: Laws 1983, ch. 312, § 16; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-33 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 16, relating to loans to corporation by members, effective July 1,
2005. For provisions of former section, see the 2004 NMSA 1978 on
NMOneSource.com.

53-7-34. Repealed.

History: Laws 1983, ch. 312, § 17; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-34 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 17, relating to powers of stockholders and members, effective
July 1, 2005. For provisions of former section, see the 2004 NMSA 1978 on
NMOneSource.com.
53-7-35. Repealed.

History: Laws 1983, ch. 312, § 18; 2001, ch. 200, § 34; repealed Laws 2005, ch. 184, §
2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-35 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 18, relating to amendment of articles of incorporation, effective
July 1, 2005. For provisions of former section, see the 2004 NMSA 1978 on
NMOneSource.com.

53-7-36. Repealed.

History: Laws 1983, ch. 312, § 19; 2001, ch. 200, § 35; repealed Laws 2005, ch. 184, §
2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-36 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 19, relating to legislative amendments, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-37. Repealed.

History: Laws 1983, ch. 312, § 20; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-37 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 20, relating to earned surplus, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-38. Repealed.

History: Laws 1983, ch. 312, § 21; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-38 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 21, relating to depositories for funds, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-39. Repealed.
History: Laws 1983, ch. 312, § 22; 2001, ch. 200, § 36; repealed Laws 2005, ch. 184, §
2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-39 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 22, relating to annual reports, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-40. Repealed.

History: Laws 1983, ch. 312, § 23; 1988, ch. 30, § 2; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-40 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 23, relating to exemption from application of other laws, effective
July 1, 2005. For provisions of former section, see the 2004 NMSA 1978 on
NMOneSource.com.

53-7-41. Repealed.

History: Laws 1983, ch. 312, § 24; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-41 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 24, relating to duration of corporation, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-42. Repealed.

History: Laws 1983, ch. 312, § 25; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-42 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 25, relating to dissolution of corporation, effective July 1, 2005.
For provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-43. Repealed.

History: Laws 1983, ch. 312, § 26; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS
Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-43 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 26, relating to voidability of act, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-44. Repealed.

History: Laws 1983, ch. 312, § 27; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-44 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 27, relating to credit of state not pledged, effective July 1, 2005.
For provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

53-7-45. Repealed.

History: Laws 1983, ch. 312, § 28; 1988, ch. 9, § 1; repealed Laws 2005, ch. 184, § 2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-45 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 28, relating to business development corporation fund creation,
effective July 1, 2005. For provisions of former section, see the 2004 NMSA 1978 on
NMOneSource.com.

53-7-46. Repealed.

History: Laws 1983, ch. 312, § 29; 1989, ch. 324, § 30; repealed Laws 2005, ch. 184, §
2.

                                               ANNOTATIONS

Repeals. -- Laws 2005, ch. 184, § 2 repealed 53-7-46 NMSA 1978, as enacted by
Laws 1983, ch. 312, § 29, relating to investment of fund, effective July 1, 2005. For
provisions of former section, see the 2004 NMSA 1978 on NMOneSource.com.

ARTICLE 7A
Economic Development Corporation

53-7A-1. Short title.

    This act [53-7A-1 to 53-7A-6] may be cited as the "Economic Development
Corporation Act".
History: Laws 2003, ch. 183, § 1.

                                               ANNOTATIONS

Effective dates. -- Laws 2003, ch. 183 contained no effective date provision, but,
pursuant to N.M. Const., art. IV, § 23, was effective June 20, 2003, 90 days after
adjournment of the legislature.

53-7A-2. Purposes.

    The purposes of the Economic Development Corporation Act are to:

    A. promote, stimulate, develop and advance business, prosperity, employment and
economic welfare in the state and among its citizens;

    B. encourage and assist the location of new business and industry in this state and
the rehabilitation and expansion of existing business and industry;

    C. cooperate and act in conjunction with other organizations, public or private, in the
promotion and advancement of industrial, commercial, agricultural and recreational
developments in the state; and

    D. provide for the creation of a nonprofit corporation with the responsibility to work
with communities throughout New Mexico in effectuating these purposes in a manner
that can be quantified and measured.

History: Laws 2003, ch. 183, § 2.

                                               ANNOTATIONS

Effective dates. -- Laws 2003, ch. 183 contained no effective date provision, but,
pursuant to N.M. Const., art. IV, § 23, was effective June 20, 2003, 90 days after
adjournment of the legislature.

53-7A-3. Corporation authorized; board of directors; organization;
limitation of liability.

    A. A nonprofit organization to provide economic development services to the state is
authorized to be organized and formed under the provisions of the Nonprofit
Corporation Act [Chapter 53, Article 8 NMSA 1978] and the Economic Development
Corporation Act.

    B. The corporation shall be governed by a board of directors composed of fifteen
members as follows:

         (1) the secretary of economic development;
         (2) one economic development professional, appointed by the governor, from
each regional planning district, provided that no more than four of the economic
development professionals shall be members of the same political party; and

         (3) one professional businessperson, appointed by the governor, from each
regional planning district, provided that no more than four of the professional
businesspersons shall be members of the same political party.

    C. The governor shall appoint a chair and the board of directors shall elect other
officers as the board deems necessary.

    D. The board of directors shall adopt bylaws, in accordance with the provisions of
the Nonprofit Corporation Act, governing the conduct of the corporation in the
performance of its duties under the Economic Development Corporation Act.

    E. The board of directors shall hire a president who shall be the chief administrative
officer of the corporation and be responsible for its operations.

    F. A director, the president or another officer shall not be personally liable for any
damages resulting from:

         (1) any negligent act or omission of an employee of the corporation;

         (2) any negligent act or omission of another director or officer of the
corporation; or

         (3) any action taken as a director or officer or a failure to take any action as a
director or officer unless the director or officer has breached or failed to perform the
duties of his office and the breach or failure to perform constitutes willful misconduct or
recklessness.

History: Laws 2003, ch. 183, § 3.

                                               ANNOTATIONS

Effective dates. -- Laws 2003, ch. 183 contained no effective date provision, but,
pursuant to N.M. Const., art. IV, § 23, was effective June 20, 2003, 90 days after
adjournment of the legislature.

53-7A-4. Corporation; powers.

    The corporation shall have the powers conferred upon domestic nonprofit
corporations by the Nonprofit Corporation Act [Chapter 53, Article 8 NMSA 1978] unless
otherwise specified in the Economic Development Corporation Act and shall also have
the power to:
    A. sue and be sued in its corporate name;

    B. purchase, take, receive or otherwise acquire; own, hold, dispose of or use; and
otherwise deal in and with property, including an interest in or ownership of intangible
personal property, intellectual property or technological innovations;

    C. sell, convey, pledge, exchange, transfer or otherwise dispose of its assets and
properties for consideration upon terms and conditions that the corporation shall
determine;

    D. make contracts, incur liabilities or borrow money at rates of interest that the
corporation may determine;

    E. make and execute all contracts, agreements or instruments necessary or
convenient in the exercise of the powers and functions granted the corporation by the
Economic Development Corporation Act;

    F. receive and administer grants, contracts and private gifts;

    G. invest and reinvest its funds;

    H. conduct its activities, carry on its operations, have offices and exercise the
powers granted by the Economic Development Corporation Act;

    I. employ officers and employees that it deems necessary, set their compensation
and prescribe their duties;

    J. enter into agreements with insurance carriers to insure against any loss in
connection with its operations;

    K. authorize retirement programs and other benefits for salaried officers and
employees of the corporation; and

    L. contract with economic development experts and other experts and consultants
that may be required and to fix and pay their compensation.

History: Laws 2003, ch. 183, § 4.

                                               ANNOTATIONS

Effective dates. -- Laws 2003, ch. 183 contained no effective date provision, but,
pursuant to N.M. Const., art. IV, § 23, was effective June 20, 2003, 90 days after
adjournment of the legislature.

53-7A-5. Corporation; duties.
    Pursuant to policies established by its board of directors and as directed by its
president, the corporation shall:

    A. establish relationships with communities throughout New Mexico in order to
understand their economic development goals;

    B. work for those communities in recruiting the types of businesses and jobs that
have been identified by the communities;

    C. solicit economic development funds from federal and private sources;

    D. participate in economic development conferences and job fairs in order to
educate businesses throughout the country and the world on the economic benefits and
other attractions of New Mexico;

    E. sponsor such forums and conferences as are necessary in order to empower
New Mexico businesses and citizens with those business skills needed to compete in a
worldwide economy; and

    F. perform such other activities as are needed to further the purposes of the
Economic Development Corporation Act.

History: Laws 2003, ch. 183, § 5.

                                               ANNOTATIONS

Effective dates. -- Laws 2003, ch. 183 contained no effective date provision, but,
pursuant to N.M. Const., art. IV, § 23, was effective June 20, 2003, 90 days after
adjournment of the legislature.

53-7A-6. Application of other laws.

    A. The corporation formed pursuant to the Economic Development Corporation Act
is separate and apart from the state and shall not be deemed an agency, public body or
other political subdivision of New Mexico for purposes of applying laws relating to
personnel, procurement of goods and services, gross receipts tax, disposition or
acquisition of property, capital outlays and per diem and mileage; provided that the
corporation shall be deemed an executive branch agency for purposes of receiving
marketing services from the tourism department.

    B. Notwithstanding the provisions of the Open Meetings Act [Chapter 10, Article 15
NMSA 1978], meetings of the corporation shall be closed to the public when proprietary
technical or business information or any information regarding location or expansion of
a business is discussed.
    C. Information obtained by the corporation that is proprietary technical or business
information or related to the possible relocation or expansion of a business shall be
confidential and not subject to inspection pursuant to the Inspection of Public Records
Act [Chapter 14, Article 2 NMSA 1978].

    D. The corporation, its officers, directors and employees shall be granted immunity
from liability for any tort as provided in the Tort Claims Act [41-4-1 to 41-4-27 NMSA
1978 ] and may enter into agreements with insurance carriers to insure against a loss in
connection with its operations even though the loss may be included among losses
covered by the risk management fund of New Mexico.

History: Laws 2003, ch. 183, § 6; 2023, ch. 18, § 2.

                                               ANNOTATIONS

The 2023 amendment, effective July 1, 2024, provided that the corporation formed
pursuant to the Economic Development Corporation Act shall be deemed an executive
branch agency for purposes of receiving marketing services from the tourism
department; and in Subsection A, added "provided that the corporation shall be deemed
an executive branch agency for purposes of receiving marketing services from the
tourism department".

ARTICLE 7B
New Mexico Research Applications

53-7B-1. Short title.

    Sections 1 through 10 [53-7B-1 to 53-7B-10 NMSA 1978] of this act may be cited as
the "New Mexico Research Applications Act".

History: Laws 2009, ch. 66, § 1.

                                               ANNOTATIONS

Emergency clauses. -- Laws 2009, ch. 66, § 16 contained an emergency clause and
was approved April 2, 2009.

Temporary provisions. -- Laws 2009, ch. 66, § 14 provided that on April 2, 2009, all
personnel, appropriations, money, records, property, equipment and supplies of the
technology research collaborative shall be transferred to the economic development
department for the use of the research applications center and all existing contracts,
agreements and obligations in effect for the technology research collaborative shall be
binding and effective on the economic development department.

53-7B-2. Purposes.
    The purposes of the New Mexico Research Applications Act are to:

    A. promote the public welfare and prosperity of the people of New Mexico;

    B. foster economic development in the area of intellectual property within New
Mexico;

    C. attract investments that will drive technological innovations in New Mexico;

    D. create high-value technology jobs in New Mexico with appropriately trained
employees to fill such jobs;

    E. forge links, critical partnerships and collaboration among New Mexico's business
communities, universities, private foundations, national laboratories and government
through the development of a research applications center;

    F. support educational initiatives in science, technology, engineering and
mathematics in the state to ensure the availability of the future work force required to
meet the goals of the New Mexico Research Applications Act; and

    G. engage in cooperative ventures related to the use of research and development
applications, including the use of research and development applications as a means of
enhancing state and local resource development and promoting innovative
technological advances in the areas of economic, community and work force
development; education; science; technology; engineering; mathematics; research and
development; conservation; and health care, within New Mexico.

History: Laws 2009, ch. 66, § 2.

                                               ANNOTATIONS

Emergency clauses. -- Laws 2009, ch. 66, § 16 contained an emergency clause and
was approved April 2, 2009.

53-7B-3. Definitions.

    As used in the New Mexico Research Applications Act:

    A. "board" means the board of directors of the research applications center;

    B. "department" means the economic development department;

    C. "research applications center" means the nonprofit corporation created pursuant
to the Nonprofit Corporation Act [Chapter 53, Article 8 NMSA 1978] and the New
Mexico Research Applications Act;
    D. "technological innovations" includes research, development, prototype assembly,
manufacturing, patenting, licensing, marketing and sale of inventions, ideas, practices,
applications, processes, machines and technology and related property rights of all
kinds; and

    E. "university" means:

         (1) a New Mexico educational institution named in Article 12, Section 11 of
the constitution of New Mexico;

         (2) a community college organized pursuant to the Community College Act
[Chapter 21, Article 13 NMSA 1978]; or

         (3) a technical and vocational institute organized pursuant to the Technical
and Vocational Institute Act [Chapter 21, Article 16 NMSA 1978].

History: Laws 2009, ch. 66, § 3.

                                               ANNOTATIONS

Emergency clauses. -- Laws 2009, ch. 66, § 16 contained an emergency clause and
was approved April 2, 2009.

53-7B-4. Research applications center; formation; board of
directors; public access to meetings and minutes.

    A. The department shall, pursuant to the Nonprofit Corporation Act [Chapter 53,
Article 8 NMSA 1978] and internal revenue service regulations pertaining to nonprofit
corporations, incorporate a corporation with the name "New Mexico research
applications center"; provided that, if that name is not available, the department shall
select another name that reflects the purposes of the New Mexico Research
Applications Act.

    B. The articles of incorporation shall include:

         (1) provisions for appointing the board pursuant to Subsection C of this
section;

         (2) provisions requiring that board vacancies shall be filled by the appropriate
appointing authority;

         (3) a statement that board members, subject to the availability of funds, shall
receive per diem and mileage at the rate provided in the Per Diem and Mileage Act [10-
8-1 to 10-8-8 NMSA 1978] for nonsalaried public officers and shall receive no other
compensation, perquisite or allowance;
         (4) a statement that the corporation will have no members;

         (5) provisions that prohibit any board action inconsistent with the New Mexico
Research Applications Act;

         (6) provisions that prohibit the board from increasing the number of directors;

         (7) a plan of distribution of the assets remaining after dissolution or final
liquidation of the corporation. The plan shall require that, after all liabilities and
obligations are paid, all funds of the corporation shall be deposited in the general fund
and all other assets shall be distributed to the department of finance and administration;
and

         (8) any other provisions deemed necessary by the department to ensure
compliance with the New Mexico Research Applications Act.

    C. The board of directors shall be appointed in a manner that reflects the
geographic, cultural and ethnic diversity of this state and provides for representation of
the research institutions of this state. The board shall consist of twelve members with
relevant experience or expertise in state government, local governments, businesses
located in New Mexico, universities, private foundations, national laboratories or
investments. The members shall be as follows:

         (1) the secretary of economic development;

         (2) the secretary of higher education;

         (3) the secretary of workforce solutions;

         (4) the chair of the New Mexico council of university presidents;

         (5) the governor's science advisor;

         (6) a member appointed by the governor, who shall be a director of a national
laboratory located in New Mexico; and

         (7) six members shall be appointed by the legislature as follows:

             (a) one member appointed by the speaker of the house of representatives,
who shall represent the business community;

             (b) one member appointed by the majority leader of the house of
representatives, who shall represent local governments;
             (c) one member appointed by the minority leader of the house of
representatives, who shall be a president of a New Mexico post-secondary public
educational institution;

             (d) one member appointed by the president pro tempore of the senate, who
shall have expertise in rural economic development;

             (e) one member appointed by the majority leader of the senate, who shall
have expertise in venture capital; and

             (f) one member appointed by the minority leader of the senate, who shall
have expertise in health care.

    D. The appointed members shall serve terms of four years except that, of the initial
appointees, the member appointed by the governor, the member appointed by the
speaker of the house of representatives, the member appointed by the president pro
tempore of the senate and the member appointed by the minority leader of the house of
representatives shall be appointed for terms of two years.

    E. The governor, with the advice and consent of the senate, shall appoint one of the
members as chair of the board. Board members may designate an alternate from within
their organization or area of expertise to represent their interest, if approved by the
appointing authority.

    F. All meetings, minutes of meetings and reports of the board, the research
applications center and any corporations formed by the research applications center
shall be available and open to the public, except that portion of meetings, minutes or
reports in which business-sensitive information, as determined by the board, is
discussed. Minutes of all meetings and reports of the research applications center and
any corporations formed by the research applications center shall be provided by the
board to the legislative finance committee and any other interim or standing legislative
committees specified by the legislative finance committee within one month of the date
of the meeting or date of the report.

    G. The board shall hire a president who shall be the chief administrative officer of
the research applications center.

History: Laws 2009, ch. 66, § 4.

                                               ANNOTATIONS

Emergency clauses. -- Laws 2009, ch. 66, § 16 contained an emergency clause and
was approved April 2, 2009.

53-7B-5. Research applications center; powers.
    As directed by the board, the research applications center may:

    A. acquire, by lease or purchase, the land, buildings, facilities, improvements and
equipment necessary to achieve the purposes of the New Mexico Research
Applications Act;

    B. lease to any person any part or all of the land, buildings, facilities, improvements
and equipment acquired pursuant to Subsection A of this section;

    C. enter into contracts, joint powers agreements, memoranda of understanding and
other agreements with public and private entities in order to carry out the purposes of
the New Mexico Research Applications Act;

    D. incur liabilities or borrow money at rates of interest that the research applications
center may determine; provided that:

         (1) any debt incurred shall be payable solely from the money available to the
research applications center and does not create an obligation or indebtedness of the
state within the meaning of any constitutional provision;

         (2) no breach of any contractual obligation incurred pursuant to the New
Mexico Research Applications Act shall impose a pecuniary liability or a charge upon
the general credit or taxing power of the state, and any debt incurred is not a general
obligation for which the state's full faith and credit is pledged; and

         (3) the research applications center shall not incur any debt greater than one
million dollars ($1,000,000) or for a term longer than eight months without the prior
approval of the state board of finance;

    E. enter into business arrangements to carry out technological innovations with one
or more business entities, governmental entities, universities, private foundations,
national laboratories or other persons;

    F. otherwise conduct, sponsor, finance and contract as necessary to further
technological innovations;

    G. purchase, take, receive or otherwise acquire; own; hold; dispose of; use; or
otherwise deal in and with property, including an interest in or ownership of intangible
personal property, intellectual property or technological innovations;

    H. sell, convey, pledge, exchange, transfer or otherwise dispose of its assets and
properties for consideration upon terms and conditions that the board shall determine;

    I. solicit, receive and administer grants, contracts and gifts from federal, state and
private sources;
    J. invest and reinvest its funds;

    K. employ officers and employees that it deems necessary, set their compensation
and prescribe their duties;

    L. enter into agreements with insurance carriers to insure against any loss in
connection with its operations;

    M. authorize retirement programs and other benefits for salaried officers and
employees;

    N. create such enterprise funds, revolving funds or other financial arrangements as
it deems necessary to carry out the purposes of the New Mexico Research Applications
Act; and

    O. enter into license agreements and contracts involving intellectual property and
technological innovations, including agreements for patents, copyrights, franchises and
trademarks.

History: Laws 2009, ch. 66, § 5.

                                               ANNOTATIONS

Emergency clauses. -- Laws 2009, ch. 66, § 16 contained an emergency clause and
was approved April 2, 2009.

53-7B-6. Applicability of other laws.

    A. Except as otherwise provided in the New Mexico Research Applications Act, the
research applications center shall not be deemed to be the state, or one of its agencies,
instrumentalities, institutions or political subdivisions for the purpose of applying any
other laws, including those relating to personnel, meetings of the board, gross receipts
taxes, disposition or acquisition of property, capital outlays, per diem and mileage and
inspection of records.

    B. The research applications center shall be deemed:

         (1) an agency of the state when applying laws relating to the furnishing of
goods and services by the research applications center to the state or any other
agency, political subdivision or institution of the state;

         (2) a local public body for purposes of the Procurement Code [13-1-28 to 13-
1-199 NMSA 1978], except that the board may exempt a specific procurement from the
application of the Procurement Code if it makes a finding that compliance with the
Procurement Code would impede the purposes of the New Mexico Research
Applications Act; and
         (3) a governmental entity for purposes of the Tort Claims Act [41-4-1 to 41-4-
27 NMSA 1978]; provided that the research applications center may enter into
agreements with insurance carriers to insure against risk in connection with its
operations even though the risk may be included among the risks covered by the Tort
Claims Act.

History: Laws 2009, ch. 66, § 6.

                                               ANNOTATIONS

Emergency clauses. -- Laws 2009, ch. 66, § 16 contained an emergency clause and
was approved April 2, 2009.

53-7B-7. Annual audit and report.

    A. The board shall contract annually with an independent certified public
accountant, approved by the state auditor, to perform an examination and audit of the
accounts and books of the research applications center, including its receipts,
disbursements, contracts, leases, sinking funds, investments and any other records and
papers relating to its financial standing. The certified public accountant shall make a
determination as to whether the research applications center has complied with the
provisions of the New Mexico Research Applications Act. The person performing the
audit shall furnish copies of the audit report to the governor; the public regulation
commission [secretary of state], where they shall be placed on file and made available
for inspection by the general public; and the legislative finance committee.

    B. An annual report of the activities during the previous fiscal year of the research
applications center shall be provided by the board to the legislative finance committee at
least ninety days in advance of each regular legislative session. The report shall contain
an operating budget for the current fiscal year, a proposed budget for the next fiscal
year, a list of the present employee positions and the salaries paid for each position and
a list of all contracts entered into during the past fiscal year and the current fiscal year to
date and the amount expended to date under each contract. The legislative finance
committee shall forward any report submitted to any interim or standing legislative
committees as deemed appropriate. Upon request of the appropriate committee, the
board or the board of directors of any corporation formed by the research applications
center shall appear before any interim or standing legislative committee to provide an
accounting of all activities.

History: Laws 2009, ch. 66, § 7.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Emergency clauses. -- Laws 2009, ch. 66, § 16 contained an emergency clause and
was approved April 2, 2009.

53-7B-8. Conflicts of interest.

    A. If any director, officer or employee of the research applications center is
interested directly or indirectly or is an officer or employee of or has any ownership
interest in a legal entity interested directly or indirectly in a contract or potential contract
with the research applications center, except for any agency, instrumentality, institution
or political subdivision of the state, the interest shall be disclosed to the board and shall
be set forth in the minutes of the board. The director, officer or employee having the
interest shall not participate on behalf of the research applications center in the
authorization of the contract.

    B. Any director, officer or employee of the research applications center shall enter
into a nondisclosure agreement that at a minimum provides:

         (1) a clear description of confidential information that the research
applications center may disclose to the director, officer or employee;

         (2) a clear description of the limitations on the use of confidential information
by the director, officer or employee;

         (3) a confidentiality period that requires the director, officer or employee to
hold confidential information in confidence until that information becomes generally
publicly known;

         (4) that the director, officer or employee shall be prohibited from acquiring an
intellectual property right;

         (5) for the return of all confidential information to the research applications
center upon request;

         (6) remedies for unauthorized disclosure of confidential information under the
nondisclosure agreement, which may provide for liquidated damages, specific
performance or injunction against further disclosure or breach, in addition to all other
remedies available at law or equity to the research applications center for unauthorized
disclosure of confidential information by the director, officer or employee; and
         (7) for the award of reasonable attorney fees and costs incurred by the
research applications center in seeking enforcement of the nondisclosure agreement.

    C. Nothing in this section shall prohibit an officer, director or employee of a financial
institution from participating as a member of the board in setting general policies of the
research applications center, nor shall any provision of this section be construed as
prohibiting a financial institution of New Mexico from making loans guaranteed pursuant
to the provisions of the New Mexico Research Applications Act because an officer,
director or employee of the financial institution serves as a member of the board.

History: Laws 2009, ch. 66, § 8.

                                               ANNOTATIONS

Emergency clauses. -- Laws 2009, ch. 66, § 16 contained an emergency clause and
was approved April 2, 2009.

53-7B-9. Contracts involving public employees.

    Except as provided in Section 10 of the New Mexico Research Applications Act, the
research applications center shall not enter into any contract involving services or
property of a value in excess of twenty thousand dollars ($20,000) with an employee of
the state or one of its agencies, instrumentalities, institutions or political subdivisions or
with a business in which the employee has a controlling interest unless the board
makes a determination, in writing, that the employee:

    A. is employed by a university;

    B. is principally involved in research, public service, economic development or
instruction; and

    C. is able to provide services that are not readily available from another person or is
able to provide services that are less expensive or of higher quality than are otherwise
available.

History: Laws 2009, ch. 66, § 9.

                                               ANNOTATIONS

Emergency clauses. -- Laws 2009, ch. 66, § 16 contained an emergency clause and
was approved April 2, 2009.

53-7B-10. Transfer of technology; ownership of intellectual
property.
    A. Notwithstanding the provisions of Section 9 [53-7B-9 NMSA 1978] of the New
Mexico Research Applications Act, Section 10-16-7, 13-1-190, 21-1-17 or 21-1-35
NMSA 1978 or of any other statute, ordinance or policy regulating the conduct of public
employees, an officer or employee of a university who is principally involved in
research, public service, economic development or instruction may, subject to
Subsection B of this section, apply to the secretary of economic development for
permission to establish and maintain a substantial interest in a private entity that
provides or receives equipment, material, supplies or services in connection with the
research applications center in order to facilitate the transfer of technology developed
by the officer or employee from the research applications center to commercial and
industrial enterprises for economic development.

    B. The secretary of economic development may grant the permission only if all of
the following conditions are met:

         (1) the employer of the officer or employee certifies to the secretary that the
employer does not object to the proposed relationship;

         (2) the officer or employee provides a detailed description of the officer's or
employee's interest in the private entity;

         (3) the nature of the proposed undertaking is fully described;

         (4) the officer or employee demonstrates, to the satisfaction of the secretary,
that the proposed undertaking may benefit the economy of this state;

         (5) the officer or employee demonstrates to the satisfaction of the secretary
that the proposed undertaking will not adversely affect research, public service or
instructional activities at any educational institution; and

         (6) the officer's or employee's interest in the private entity or benefit from the
interest will not adversely affect any substantial state interest.

    C. An officer or employee of a university who is principally involved in research,
public service, economic development or instruction may develop, create or
commercialize new intellectual property for the state and encourage new opportunities
for business and increased jobs. Intellectual property created by an employee or agent
of a university associated with the research applications center shall be owned by the
university. Intellectual property created jointly shall be owned jointly. If the intellectual
property is created using federal funds, the applicable federal laws and regulations shall
govern the ownership.

    D. The board may establish policies for the implementation of this section.

History: Laws 2009, ch. 66, § 10.
                                               ANNOTATIONS

Emergency clauses. -- Laws 2009, ch. 66, § 16 contained an emergency clause and
was approved April 2, 2009.

ARTICLE 8
Nonprofit Corporations

53-8-1. Short title.

    Chapter 53, Article 8 NMSA 1978 may be cited as the "Nonprofit Corporation Act".

History: 1953 Comp., § 51-14-43, enacted by Laws 1975, ch. 217, § 1; 1977, ch. 178, §
1; 1998, ch. 108, § 25.

                                               ANNOTATIONS

Cross references. -- For exemption from franchise tax, see 53-8-28 NMSA 1978.

For constitutional provision creating tax exempt property, see N.M. Const., art. VIII, § 3.

For exemptions from income tax, see 7-2-4 NMSA 1978.

The 1998 amendment, effective January 1, 1999, substituted "Chapter 53, Article 8
NMSA 1978" for "Article 14 of Chapter 51, NMSA 1953" at the beginning of the section.

Law reviews. -- For article, "The Profitable Nonprofit Corporation: Business Activity
and Tax Exemption Under Section 501(c)(3) of I.R.C.," see 1 N.M.L. Rev. 563 (1971).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

For note, "Corporate Law ­ Formulating and Applying a 'Proper Purpose' Analysis to a
Books and Records Inspection Request ­ Schein v. N. Rio Arriba Elec. Coop., Inc.," see
28 N.M.L. Rev. 133 (1998).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 15 Am. Jur. 2d Charities § 176; 18 Am.
Jur. 2d Corporations § 32.

7 C.J.S. Associations § 54.

53-8-2. Definitions.

    As used in the Nonprofit Corporation Act, unless the context otherwise requires:
    A. "corporation" or "domestic corporation" means a nonprofit corporation subject to
the provisions of the Nonprofit Corporation Act, except a foreign corporation;

    B. "foreign corporation" means a nonprofit corporation organized under laws other
than the laws of New Mexico for a purpose for which a corporation may be organized
under the Nonprofit Corporation Act;

    C. "nonprofit corporation" means a corporation no part of the income or profit of
which is distributable to its members, directors or officers;

    D. "articles of incorporation" means the original or restated articles of incorporation
or articles of consolidation and all amendments thereto, including articles of merger;

    E. "bylaws" means the code of rules adopted for the regulation or management of
the affairs of the corporation, irrespective of the name by which such rules are
designated;

    F. "member" means one having membership rights in a corporation in accordance
with the provisions of its articles of incorporation or bylaws;

    G. "board of directors" means the group of persons vested with the management of
the affairs of the corporation, irrespective of the name by which such group is
designated;

    H. "insolvent" means inability of a corporation to pay its debts as they become due
in the usual course of its affairs;

    I. "commission" or "corporation commission" means the public regulation
commission [secretary of state] or its delegate;

    J. "address" means:

         (1) the mailing address and the street address, if within a municipality; or

         (2) the mailing address and a rural route number and box number, if any, or
the geographical location, using well-known landmarks, if outside a municipality;

    K. "duplicate original" means a document that is signed or executed in duplicate;

    L. "delivery" means:

         (1) if personally served, the date documentation is received by the
corporations bureau of the commission; and

         (2) if mailed to the commission [secretary of state], the date of the postmark
plus three days, upon proof thereof by the party delivering the documentation; and
    M. "person" includes individuals, partnerships, corporations and other associations.

History: 1953 Comp., § 51-14-44, enacted by Laws 1975, ch. 217, § 2; 1977, ch. 178, §
2; 1983, ch. 304, § 8; 1989, ch. 294, § 1; 1998, ch. 108, § 26.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 1998 amendment, effective January 1, 1999, deleted "the term" at the end of the
introductory language; deleted "or purposes" preceding "for which a" near the middle of
Subsection B; deleted "or codes" preceding "of rules adopted" deleted "or names"
preceding "by which such rules are" in Subsection E; substituted "public regulation" for
"state corporation" near the end of Subsection I; substituted "that" for "which" near the
end of Subsection K; and substituted "corporation bureau of the commission" for
"commission's corporation department" near the end of Paragraph L(1).

The 1989 amendment, effective January 1, 1990, in Subsection J, added the
paragraph designations, deleted "a recitation of" at the end of the introductory language,
in Paragraph (1) deleted "or post office box number" following "mailing address" and "a
description of" from the end of the paragraph, and, in Paragraph (2), inserted "the
mailing address and a rural route number and box number, if any, or" and "using well-
known landmarks"; and added Subsection M.

The 1983 amendment, effective June 17, 1983, added "or its delegate" at the end of
Subsection I and added Subsection L.

53-8-3. Applicability.

    A. The provisions of the Nonprofit Corporation Act relating to domestic corporations
apply to:

         (1) all corporations organized under that act; and

         (2) all nonprofit corporations organized under any acts repealed by the
Nonprofit Corporation Act, for a purpose or purposes for which a corporation might be
organized under that act.
    B. The provisions of the Nonprofit Corporation Act relating to foreign corporations
apply to all foreign nonprofit corporations conducting affairs in New Mexico for a
purpose or purposes for which a corporation might be organized under that act.

History: 1953 Comp., § 51-14-45, enacted by Laws 1975, ch. 217, § 3.

                                               ANNOTATIONS

Compiler's notes. -- For acts repealed by the Nonprofit Corporation Act, see Laws
1975, ch. 217, § 98, which repealed 51-14-20 to 51-14-42, 1953 Comp., effective July 1,
1976.

53-8-4. Purposes.

    Corporations may be organized under the Nonprofit Corporation Act for any lawful
purpose or purposes, including, without being limited to, any one or more of the
following purposes: charitable; benevolent; eleemosynary; educational; civic; patriotic;
political; religious; social; fraternal; literary; cultural; athletic; scientific; agricultural;
horticultural; animal husbandry; and professional, commercial, industrial or trade
association.

History: 1953 Comp., § 51-14-46, enacted by Laws 1975, ch. 217, § 4.

                                               ANNOTATIONS

Prepaid group visual care program. -- It would be legal to organize a nonprofit
organization for a prepaid group visual care program under the laws of the state of New
Mexico, despite the fact that no specific authorization has as yet been granted by way of
legislative enactment. 1959 Op. Att'y Gen. No. 59-156 (rendered under former law).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 15 Am. Jur. 2d Charities § 171, 173,
174, 176; 18A Am. Jur. 2d Corporations §§ 194, 195.

Implied power of corporation belonging to one of the three classes, religious, charitable
or educational, to promote, or to accept gifts for, objects which more appropriately
pertain to the purposes of those in one of the other classes, 121 A.L.R. 1526.

Nonprofit purposes and character which warrant creation of nonprofit corporation, 16
A.L.R.2d 1345.

10 C.J.S. Beneficial Associations § 7; 18 C.J.S. Corporations § 28.

53-8-5. General powers.

    Each corporation shall have power to:
    A. have perpetual succession by its corporate name unless a limited period of
duration is stated in its article of incorporation;

    B. sue and be sued, complain and defend in its corporate name;

    C. have a corporate seal which may be altered at pleasure, and to use the same by
causing it, or a facsimile thereof, to be impressed or affixed or in any other manner
reproduced, but failure to have or to affix a corporate seal does not affect the validity of
any instrument or any action taken in pursuance thereof or in reliance thereon;

    D. purchase, take, receive, lease, take by gift, devise or bequest, or otherwise
acquire, own, hold, improve, use and otherwise deal in and with real or personal
property, or any interest therein, wherever situated;

    E. sell, convey, mortgage, pledge, lease, exchange, transfer and otherwise dispose
of all or any part of its property and assets;

    F. lend money to its directors, officers and employees and otherwise assist them;

    G. purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, use,
employ, sell, mortgage, lend, pledge, or otherwise dispose of, and otherwise use and
deal in and with, shares or other interests in, or obligations of, other domestic or foreign
corporations, whether for profit or not for profit, associations, partnerships, limited
partnerships or individuals, or direct or indirect obligations of the United States, or of
any other government, state, territory, governmental district or municipality or of any
instrumentality thereof;

    H. make contracts and guarantees and incur liabilities, borrow money at such rates
of interest as the corporation may determine, issue its notes, bonds and other
obligations, and secure any of its obligations by mortgage or pledge of all or any of its
property, franchises and income;

    I. lend money for its corporate purposes, invest and reinvest its funds, and take
and hold real and personal property as security for the payment of funds so loaned or
invested;

    J. conduct its affairs, carry on its operations, and have offices and exercise the
powers granted by the Nonprofit Corporation Act in any state, territory, district or
possession of the United States, or in any foreign country;

    K. elect or appoint directors and define their duties and fix their compensation, if
any;

    L. elect or appoint officers and agents of the corporation, who may be directors or
members, and define their duties and fix their compensation;
    M. make and alter bylaws, not inconsistent with its articles of incorporation or with
the laws of New Mexico, for the administration and regulation of the affairs of the
corporation;

    N. unless otherwise provided in the articles of incorporation, make donations for the
public welfare or for charitable, scientific or educational purposes; and in time of war to
make donations in aid of war activities;

    O. pay pensions and establish pension plans, pension trusts, profit-sharing plans
and other incentive plans for any or all of its directors, officers and employees;

    P. cease its corporate activities and surrender its corporate franchise; and

    Q. have and exercise all powers necessary or convenient to effect any or all of the
purposes for which the corporation is organized.

History: 1953 Comp., § 51-14-47, enacted by Laws 1975, ch. 217, § 5.

                                               ANNOTATIONS

Class actions. -- A corporation's right to sue for relief as an entity and its right to sue
for recovery for its individual members are not identical. O'Hare v. Valley Utils., Inc.,
1976-NMCA-004, 89 N.M. 105, 547 P.2d 1147, rev'd in part on other grounds, 1976-
NMSC-024, 89 N.M. 262, 550 P.2d 274.

The bylaws of state political parties may not be inconsistent with prevailing law,
and those that are inconsistent with law are generally unenforceable. -- Political
parties organized as nonprofit corporations, are governed by the Nonprofit Corporation
Act (NCA), 53-8-1 to 53-8-99 NMSA 1978, which allows organizations to form for
socially beneficial purposes, including political purposes, and further provides that
through their board of directors, the nonprofits have the power to make and alter
bylaws. The NCA makes it clear that a nonprofit corporation's bylaws may not be
inconsistent with law or the nonprofit's articles of incorporation. A political party may
also be registered as a political committee through the Campaign Reporting Act (CRA),
1-19-25 to 1-19-36 NMSA 1978, which requires organizations operating primarily for the
purpose of influencing or attempting to influence an election, to register with the
secretary of state as political committees, pay a filing fee, and file reports disclosing
their activities and contributors, and although the CRA does not address the bylaws of a
political committee, the principles of nonprofit corporations acting for political purposes
control in the context of political committee bylaws. Therefore, the bylaws of a political
party such as the republican party of New Mexico, which is registered as a domestic
nonprofit corporation pursuant to the NCA, or the democratic party of New Mexico,
which is registered as a political committee pursuant to the CRA, may not be
inconsistent with prevailing law, and bylaws that are inconsistent with law are generally
unenforceable. Moreover, an organization cannot become a "qualified political party"
unless they comply with specific provisions of the Election Code, which is clear that
political party organizations may not adopt rules that conflict with the state party's
uniform rules, nor may they adopt rules that abridge the lawful rights of any person.
2024 Op. Att'y Gen. No. 24-09.

Leases. -- The eastern New Mexico state fair would have the authority to lease the
property owned by it to anyone and on such terms and conditions as it deems proper,
provided that its articles of incorporation do not preclude this, and provided further that
the terms of such lease provide a return reasonably in line with the value of the property
leased and do not amount to a gift. 1957 Op. Att'y Gen. No. 57-256 (rendered under
former law).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1990,
1991.

Power and capacity of unincorporated association, lodge, society, or club to convey,
transfer or encumber association property, 15 A.L.R.2d 1451.

Enforceability of subscription under conditional charitable pledge, 97 A.L.R.3d 1054.

Modern status: validity and effect of mortmain statutes, 6 A.L.R.4th 603.

19 C.J.S. Corporations §§ 554 to 739.

53-8-6. Defense of ultra vires.

    No act of a corporation and no conveyance or transfer of real or personal property to
or by a corporation shall be invalid by reason of the fact that the corporation was without
capacity or power to do the act or to make or receive the conveyance or transfer, but
such lack of capacity or power may be asserted:

    A. in a proceeding by a member or a director against the corporation to enjoin the
doing or continuation of unauthorized acts, or the transfer of real or personal property by
or to the corporation. If the unauthorized acts or transfer sought to be enjoined are
being, or are to be, performed pursuant to any contract to which the corporation is a
party, the court may, if all of the parties to the contract are parties to the proceeding and
if it deems the same to be equitable, set aside and enjoin the performance of the
contract, and in so doing may allow to the corporation or the other parties to the
contract, as the case may be, compensation for the loss or damage sustained by either
of them which may result from the action of the court in setting aside and enjoining the
performance of the contract, but anticipated profits to be derived from the performance
of the contract shall not be awarded by the court as a loss or damage sustained; or

    B. in a proceeding by the corporation, whether acting directly or through a receiver,
trustee or other legal representative, or through members in a respresentative
[representative] suit, against the officers or directors of the corporation for exceeding
their authority.
History: 1953 Comp., § 51-14-48, enacted by Laws 1975, ch. 217, § 6.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1283
to 1340, 1990 to 2072.

19 C.J.S. Corporations §§ 573 to 579.

53-8-7. Corporate name.

    The corporate name and, if different, the name under which the corporation
proposes to transact business in New Mexico shall not:

    A. contain any word or phrase that indicates or implies that it is organized for any
purpose other than one or more of the purposes contained in its articles of
incorporation; and

    B. be the same as, or confusingly similar to, the name of any corporation, whether
for profit or not for profit, existing under the laws of New Mexico, or any foreign
corporation, whether for profit or not for profit, authorized to transact business or
conduct affairs in New Mexico, or a corporate name reserved or registered as permitted
by the laws of New Mexico.

History: 1953 Comp., § 51-14-49, enacted by Laws 1975, ch. 217, § 7; 2021, ch. 68, §
1.

                                               ANNOTATIONS

The 2021 amendment, effective July 1, 2021, applied the provisions of this section to
the name under which a corporation proposes to transact business in New Mexico if it is
different than the corporate name; in the introductory paragraph, after "The corporate
name", added "and, if different, the name under which the corporation proposes to
transact business in New Mexico shall not"; and in Subsections A and B, deleted "shall
not".

Similar name. -- Fraternal organization was restrained from holding itself out as the
Masonic Grand Lodge, Colored for the jurisdiction of New Mexico and use of name
"Free and Accepted Masons of New Mexico" and "A. F. and A. M. (Colored)" of New
Mexico, which rendered it strikingly similar to other grand lodges, resulting in confusion
and tending to deceive the public. Prince Hall Grand Lodge v. Most Worshipful King
Solomon Grand Lodge, 1957-NMSC-011, 62 N.M. 255, 308 P.2d 581.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 273,
283.
Right of charitable or religious association or corporation to protection against use of
same or similar name by another, 37 A.L.R.3d 277.

18 C.J.S. Corporations §§ 98 to 105.

53-8-7.1. Reserved name.

    A. The exclusive right to the use of a corporate name may be reserved by:

         (1) any person intending to organize a corporation under the Nonprofit
Corporation Act;

         (2) any domestic corporation intending to change its name;

         (3) any foreign corporation intending to make application for a certificate of
authority to conduct affairs in this state;

         (4) any foreign corporation authorized to conduct affairs in this state and
intending to change its name; or

         (5) any person intending to organize a foreign corporation and intending to
have such corporation make application for a certificate of authority to conduct affairs in
this state.

    B. The reservation shall be made by filing with the commission [secretary of state]
an application to reserve a specified corporate name, executed by the applicant. If the
commission [secretary of state] finds that the name is available for corporate use, it
shall reserve the name for the exclusive use of the applicant for a period of one hundred
twenty days.

    C. The right to the exclusive use of a specified corporate name so reserved may be
transferred to any other person or corporation by filing in the office of the commission
[secretary of state] a notice of transfer, executed by the applicant for whom the name
was reserved, and specifying the name and address of the transferee.

History: 1978 Comp., § 53-8-7.1, enacted by Laws 1983, ch. 304, § 9.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-8-8. Registered office and registered agent.

    Each corporation shall have and continuously maintain in New Mexico:

    A. a registered office which may be, but need not be, the same as its principal
office; and

    B. a registered agent, which agent may be either an individual resident in New
Mexico whose business office is identical with such registered office, or a domestic
corporation, whether for profit or not for profit, or a foreign corporation, whether for profit
or not for profit, authorized to transact business or conduct affairs in New Mexico,
having an office identical with such registered office.

History: 1953 Comp., § 51-14-50, enacted by Laws 1975, ch. 217, § 8.

53-8-9. Change of registered office or registered agent.

    A. A corporation may change its registered office or change its registered agent, or
both, upon filing in the office of the public regulation commission [secretary of state] a
statement setting forth:

         (1) the name of the corporation;

         (2) the address of its then registered office;

         (3) if the address of its registered office be changed, the address to which the
registered office is to be changed;

         (4) the name of its then registered agent;

         (5) if its registered agent be changed:

             (a) the name of its successor registered agent; and

             (b) a statement executed by the successor registered agent in which the
agent acknowledges acceptance of the appointment by the filing corporation as its
registered agent, if the agent is an individual, or a statement executed by an authorized
officer of a corporation that is the successor registered agent in which the officer
acknowledges the corporation's acceptance of the appointment by the filing corporation
as its registered agent, if the agent is a corporation; and
         (6) that the address of its registered office and the address of the office of its
registered agent, as changed, will be identical.

    B. The statement pursuant to the provisions of Subsection A of this section shall be
executed by the corporation by an authorized officer of the corporation and delivered to
the public regulation commission [secretary of state]. If the public regulation commission
[secretary of state] finds that the statement conforms to the provisions of the Nonprofit
Corporation Act, it shall file the statement in the office of the public regulation
commission [secretary of state], and upon such filing, the change of address of the
registered office, or the appointment of a new registered agent, or both, as the case
may be, shall become effective.

    C. A registered agent of a corporation may resign as agent upon filing a written
notice of resignation, including the original and a copy, with the public regulation
commission [secretary of state]. The copy may be a photocopy of the original after it
was signed or a photocopy that is conformed to the original. The commission [secretary
of state] shall mail an endorsed copy to the corporation in care of an officer, who is not
the resigning registered agent, at the address of the officer as shown by the most recent
annual report of the corporation. The appointment of the agent shall terminate upon the
expiration of thirty days after receipt of the notice by the public regulation commission
[secretary of state].

    D. If the 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 corporation for which the registered agent is the registered agent by
notifying the corporation in writing of the change and signing, either manually or in
fascimile, and delivering to the public regulation commission [secretary of state] for filing
a statement that complies with the requirements of Subsection A of this section and
recites that the corporation has been notified of the change.

History: 1953 Comp., § 51-14-51, enacted by Laws 1975, ch. 217, § 9; 1977, ch. 178, §
3; 2003, ch. 318, § 8.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.
The 2003 amendment, effective July 1, 2003, substituted "public regulation" for
"corporation" following "office of the" in Subsection A, in Subparagraph A(5)(b),
substituted "a statement" for "an affidavit" at the beginning, substituted "the agent
acknowledges" for "he acknowledges his" following "agent in which", substituted "a
statement executed by an authorized officer" for "an affidavit executed by the president
or vice president" following "an individual, or"; deleted Paragraph A(7) which read: "that
such change was authorized by resolution duly adopted by its board of directors";
rewrote Subsections B and C; and added Subsection D.

53-8-10. Service of process on corporation.

    The registered agent appointed by a corporation shall be an agent of the corporation
upon whom any process, notice or demand required or permitted by law to be served
upon the corporation may be served. Nothing in this section limits or affects the right to
serve any process, notice or demand required or permitted by law to be served upon a
corporation in any other manner now or hereafter permitted by law.

History: 1953 Comp., § 51-14-52, enacted by Laws 1975, ch. 217, § 10.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2192 to
2214.

19 C.J.S. Corporations §§ 721 to 735.

53-8-11. Members.

    A corporation may have one or more classes of members or may have no members.
If the corporation has one or more classes of members, the designation of such class or
classes, the manner of election or appointment and the qualifications and rights of the
members of each class shall be set forth in the articles of incorporation or the bylaws. If
the corporation has no members, that fact shall be set forth in the articles of
incorporation or the bylaws. A corporation may issue certificates evidencing
membership therein.

History: 1953 Comp., § 51-14-53, enacted by Laws 1975, ch. 217, § 11.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- Right of member of nonprofit
association or corporation to possession, inspection, or use of membership list, 37
A.L.R.4th 1206.

53-8-12. Bylaws.
    A. The initial bylaws of a corporation shall be adopted by its board of directors. The
power to alter, amend or repeal the bylaws or adopt new bylaws shall be vested in the
board of directors unless otherwise provided in the articles of incorporation or the
bylaws. The bylaws may contain any provisions for the regulation and management of
the affairs of a corporation not inconsistent with law or the articles of incorporation.

    B. The initial bylaws and any subsequent bylaws whether by amendment, repeal or
new adoption shall be executed by two authorized officers of the corporation. The
bylaws in effect for the corporation shall be maintained at the corporation's principal
office in New Mexico and shall be subject to inspection and copying by the public. If the
most recently adopted bylaws are so maintained, they shall not be void, notwithstanding
any requirements of prior law. The corporation may charge a reasonable fee for copying
its bylaws, not to exceed one dollar ($1.00) per page.

History: 1953 Comp., § 51-14-54, enacted by Laws 1975, ch. 217, § 12; 1977, ch. 178,
§ 4; 2003, ch. 318, § 9.

                                               ANNOTATIONS

The 2003 amendment, effective July 1, 2003, in Subsection B, substituted "two
authorized officers of the corporation" for "the corporation's chief officer and by its
secretary or assistant secretary and filed with the commission. Such bylaws shall be
void until filed with the commission" following "be executed by", and added the last three
sentences.

The bylaws of state political parties may not be inconsistent with prevailing law,
and those that are inconsistent with law are generally unenforceable. -- Political
parties organized as nonprofit corporations, are governed by the Nonprofit Corporation
Act (NCA), 53-8-1 to 53-8-99 NMSA 1978, which allows organizations to form for
socially beneficial purposes, including political purposes, and further provides that
through their board of directors, the nonprofits have the power to make and alter
bylaws. The NCA makes it clear that a nonprofit corporation's bylaws may not be
inconsistent with law or the nonprofit's articles of incorporation. A political party may
also be registered as a political committee through the Campaign Reporting Act (CRA),
1-19-25 to 1-19-36 NMSA 1978, which requires organizations operating primarily for the
purpose of influencing or attempting to influence an election, to register with the
secretary of state as political committees, pay a filing fee, and file reports disclosing
their activities and contributors, and although the CRA does not address the bylaws of a
political committee, the principles of nonprofit corporations acting for political purposes
control in the context of political committee bylaws. Therefore, the bylaws of a political
party such as the republican party of New Mexico, which is registered as a domestic
nonprofit corporation pursuant to the NCA, or the democratic party of New Mexico,
which is registered as a political committee pursuant to the CRA, may not be
inconsistent with prevailing law, and bylaws that are inconsistent with law are generally
unenforceable. Moreover, an organization cannot become a "qualified political party"
unless they comply with specific provisions of the Election Code, which is clear that
political party organizations may not adopt rules that conflict with the state party's
uniform rules, nor may they adopt rules that abridge the lawful rights of any person.
2024 Op. Att'y Gen. No. 24-09.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 310 to
332.

18 C.J.S. Corporations §§ 111 to 121.

53-8-13. Meetings of members.

    A. Meetings of members shall be held at such place, either within or without New
Mexico as may be provided in the bylaws. In the absence of any such provision, all
meetings shall be held at the registered office of the corporation in New Mexico.

    B. An annual meeting of the members shall be held at such time as may be
provided in the bylaws. If the annual meeting is not held within any thirteen-month
period, the district court may, on the application of any member, order a meeting to be
held. However, failure to hold the annual meeting at the designated time shall not work
a forfeiture or dissolution of the corporation.

    C. Special meetings of the members may be called by the president or by the board
of directors. Special meetings of the members may also be called by such other officers
or persons or number or proportion of members as may be provided in the articles of
incorporation or the bylaws. In the absence of a provision fixing the number or
proportion of members entitled to call a meeting, a special meeting of members may be
called by members having one-twentieth of the votes entitled to be cast at such
meeting.

History: 1953 Comp., § 51-14-55, enacted by Laws 1975, ch. 217, § 13.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 948 to
962; 18B Am. Jur. 2d Corporations §§ 1365 to 1367, 1436.

18 C.J.S. Corporations §§ 362 to 396.

53-8-14. Notice of members' meetings; waiver.

    A. Unless otherwise provided in the articles of incorporation or the bylaws, written
notice stating the place, day and hour of the meeting and, in case of a special meeting,
the purpose or purposes for which the meeting is called, shall be delivered not less than
ten nor more than fifty days before the date of the meeting, either personally or by mail,
by or at the direction of the president, or the secretary, or the officers or persons calling
the meeting, to each member entitled to vote at the meeting. If mailed, the notice shall
be deemed to be delivered when deposited in the United States mail addressed to the
member at his address as it appears on the records of the corporation, with postage
thereon prepaid.

    B. Attendance at any meeting by a member shall constitute a waiver of notice of the
meeting, except where a member attends a meeting for the expressed purpose of
objecting to the transaction of any business because the meeting is not lawfully called
or convened.

History: 1953 Comp., § 51-14-56, enacted by Laws 1975, ch. 217, § 14.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 963 to
985; 18B Am. Jur. 2d Corporations §§ 1368 to 1370, 1436.

18 C.J.S. Corporations §§ 365 to 367.

53-8-15. Voting.

    A. The right of the members, or any class or classes of members, to vote may be
limited, enlarged or denied to the extent specified in the articles of incorporation or the
bylaws. Unless so limited, enlarged or denied, each member, regardless of class, shall
be entitled to one vote on each matter submitted to a vote of members.

    B. A member entitled to vote may vote in person or, unless the articles of
incorporation or the bylaws otherwise provide, may vote by proxy executed in writing by
the member or by the member's duly authorized attorney-in-fact or via simultaneous,
remote electronic means. No proxy shall be valid after eleven months from the date of
its execution, unless otherwise provided in the proxy. Where directors or officers are to
be elected by members, the bylaws may provide that such elections may be conducted
by mail.

    C. The articles of incorporation or the bylaws may provide that in all elections for
directors every member entitled to vote shall have the right to cumulate the member's
vote and to give one candidate a number of votes equal to the member's vote multiplied
by the number of directors to be elected, or by distributing such votes on the same
principle among any number of candidates.

    D. If a corporation has no members or its members have no right to vote, the
directors shall have the sole voting power.

History: 1953 Comp., § 51-14-57, enacted by Laws 1975, ch. 217, § 15; 1978 Comp., §
53-8-15, 2025, ch. 62, § 3.

                                               ANNOTATIONS
The 2025 amendment, effective June 20, 2025, allowed nonprofit associations to
transact business remotely; and in Subsection B, after "attorney-in-fact" added "or via
simultaneous, remote electronic means".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 1004,
1006; 18B Am. Jur. 2d Corporations § 1379.

18 C.J.S. Corporations §§ 375 to 394.

53-8-16. Quorum.

    The bylaws may provide the number or percentage of members entitled to vote
represented in person, by proxy or via simultaneous, remote electronic means or the
number or percentage of votes represented in person, by proxy or via simultaneous,
remote electronic means that shall constitute a quorum at a meeting of members. In the
absence of any such provision, members holding one-tenth of the votes entitled to be
cast on the matter to be voted upon represented in person, by proxy or via
simultaneous, remote electronic means shall constitute a quorum. A majority of the
votes entitled to be cast on a matter to be voted upon by the members present,
represented by proxy or via simultaneous, remote electronic means at a meeting at
which a quorum is present shall be necessary for the adoption thereof unless a greater
proportion is required by the Nonprofit Corporation Act, the articles of incorporation or
the bylaws.

History: 1953 Comp., § 51-14-58, enacted by Laws 1975, ch. 217, § 16; 1978 Comp., §
53-8-16, 2025, ch. 62, § 4.

                                               ANNOTATIONS

The 2025 amendment, effective June 20, 2025, provided that voting members may
appear remotely for purposes of a quorum; and after each occurrence of "by proxy"
added "or via simultaneous, remote electronic means".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 993 to
998; 18B Am. Jur. 2d Corporations § 1372.

18 C.J.S. Corporations § 370.

53-8-17. Board of directors.

    The affairs of a corporation shall be managed by a board of directors. Directors need
not be residents of New Mexico or members of the corporation unless the articles of
incorporation or the bylaws so require. The articles of incorporation or the bylaws may
prescribe other qualifications for directors.

History: 1953 Comp., § 51-14-59, enacted by Laws 1975, ch. 217, § 17.
                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2259 to
2271.

19 C.J.S. Corporations § 434 et seq.

53-8-18. Number and election of directors.

    A. The number of directors of a corporation shall be not less than three. Subject to
that limitation, the number of directors shall be fixed by, or determined in the manner
provided in, the articles of incorporation or the bylaws. The number of directors may be
increased or decreased from time to time by amendment to, or in the manner provided
in, the articles of incorporation or the bylaws, unless the articles of incorporation provide
that a change in the number of directors shall be made only by amendment of the
articles of incorporation. No decrease in number shall have the effect of shortening the
term of any incumbent director. If the number of directors is not fixed by, or determined
in a manner provided in, the articles of incorporation or the bylaws, the number shall be
the same as that stated in the articles of incorporation.

    B. The directors constituting the first board of directors shall be named in the
articles of incorporation and shall hold office until the first annual election of directors or
for such other period as may be specified in the articles of incorporation or the bylaws.
Thereafter, directors shall be elected or appointed in the manner and for the terms
provided in the articles of incorporation or the bylaws. In the absence of a provision
fixing the term of office, the term of office of a director shall be one year.

    C. Directors may be divided into classes and the terms of office of the several
classes need not be uniform. Each director shall hold office for the term for which he is
elected or appointed and until his successor is elected or appointed and qualified.

    D. A director may be removed from office pursuant to any procedure provided in the
articles of incorporation or the bylaws.

History: 1953 Comp., § 51-14-60, enacted by Laws 1975, ch. 217, § 18; 2001, ch. 200,
§ 37; 2003, ch. 318, § 10.

                                               ANNOTATIONS

The 2003 amendment, effective July 1, 2003, deleted "except that the number of the
first board of directors shall be fixed by the articles of incorporation" preceding "The
number of" in Subsection A.

The 2001 amendment, effective July 1, 2001, in Subsection A, inserted "or determined
in the manner provided in, the articles of incorporation" in the second sentence, inserted
"or in the manner provided in, the articles of incorporation or" in the third sentence, in
the fifth sentence, substituted "If" for "In the absence of a bylaw fixing" and inserted "is
not fixed by, or determined in a manner provided in, the articles of incorporation or the
bylaws".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations § 1341.

19 C.J.S. Corporations §§ 434 to 442.

53-8-18.1. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1993, ch. 318, § 6 repealed former 53-8-18.1 NMSA 1978, as
enacted by Laws 1991, ch. 170, § 6, requiring any person elected or appointed to a
board of directors to file an affidavit with the corporation stating that he consents to be a
member of the board of directors, effective June 18, 1993. For provisions of former
section, see the 1992 NMSA 1978 on NMOneSource.com.

53-8-19. Vacancy.

    A. Any vacancy occurring in the board of directors and any directorship to be filled
by reason of an increase in the number of directors may be filled by the affirmative vote
of a majority of the remaining directors, though less than a quorum of the board of
directors, unless the articles of incorporation or the bylaws provide that a vacancy or
directorship so created shall be filled in some other manner, in which case such
provision shall control.

    B. A director elected or appointed to fill a vacancy shall be elected or appointed for
the unexpired term of his predecessor in office.

    C. Any directorship to be filled by reason of an increase in the number of directors
may be filled by the board of directors for a term of office continuing only until the next
election of directors.

History: 1953 Comp., § 51-14-61, enacted by Laws 1975, ch. 217, § 19.

53-8-20. Quorum of directors.

    A. A majority of the number of directors fixed by the bylaws, or in the absence of a
bylaw fixing the number of directors, then of the number stated in the articles of
incorporation, shall constitute a quorum for the transaction of business, unless
otherwise provided in the articles of incorporation or the bylaws; but in no event shall a
quorum consist of less than one-third of the number of directors so fixed or stated. The
act of the majority of the directors present at a meeting at which a quorum is present
shall be the act of the board of directors, unless the act of a greater number is required
by the Nonprofit Corporation Act, the articles of incorporation or the bylaws.
    B. A quorum, once attained at a meeting, shall be deemed to continue until
adjournment, notwithstanding the voluntary withdrawal of enough directors to leave less
than a quorum.

History: 1953 Comp., § 51-14-62, enacted by Laws 1975, ch. 217, § 20.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1470
to 1474.

19 C.J.S. Corporations § 438.

53-8-21. Committees.

    If the articles of incorporation or the bylaws so provide, the board of directors, by
resolution adopted by a majority of the directors in office, may designate and appoint
one or more committees each of which shall consist of two or more directors. The
committees, to the extent provided in the resolution, in the articles of incorporation or in
the bylaws of the corporation, shall have and exercise all the authority of the board of
directors, except that no committee shall have the authority of the board of directors in
reference to amending, altering or repealing the bylaws; electing, appointing or
removing any member of any committee or any director or officer of the corporation;
amending the articles of incorporation, restating articles of incorporation, adopting a
plan of merger or adopting a plan of consolidation with another corporation; authorizing
the sale, lease, exchange or mortgage of all or substantially all of the property and
assets of the corporation; authorizing the voluntary dissolution of the corporation or
revoking proceedings therefor; adopting a plan for the distribution of the assets of the
corporation; or amending, altering or repealing any resolution of the board of directors
which by its terms provides that it shall not be amended, altered or repealed by the
committee. The designation and appointment of any committee and the delegation
thereto of authority shall not operate to relieve the board of directors, or any individual
director, of any responsibility imposed upon it or him by law.

History: 1953 Comp., § 51-14-63, enacted by Laws 1975, ch. 217, § 21.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1508
to 1518.

19 C.J.S. Corporations §§ 473, 474.

53-8-22. Directors' meetings.
    Meetings of the board of directors, regular or special, may be held either within or
without New Mexico and upon such notice as the bylaws may prescribe. Attendance of
a director at any meeting shall constitute a waiver of notice of the meeting, except when
a director attends a meeting for the express purpose of objecting to the transaction of
any business because the meeting is not lawfully called or convened. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting of the
board of directors need be specified in the notice or waiver of notice of the meeting
unless required by the bylaws. Except as otherwise restricted by the articles of
incorporation or bylaws, members of the board of directors or any committee designated
thereby may participate in a meeting of the board or committee by means of a
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other at the same time or via
simultaneous, remote electronic means and participation by such means shall constitute
presence in person at a meeting.

History: 1953 Comp., § 51-14-64, enacted by Laws 1975, ch. 217, § 22; 1983, ch. 304,
§ 10; 2025, ch. 62, § 5.

                                               ANNOTATIONS

The 2025 amendment, effective June 20, 2025, provided that members of the board of
directors or any committee designated by the board may participate in a meeting of the
board or committee by remote electronic means; and after "at the same time" added "or
via simultaneous, remote electronic means".

The 1983 amendment, effective June 17, 1983, added "unless required by the bylaws"
at the end of the third sentence and added the last sentence.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations § 1475.

19 C.J.S. Corporations §§ 462 to 467.

53-8-23. Officers.

    A. Every corporation organized under the Nonprofit Corporation Act shall have
officers, with titles and duties as shall be stated in the bylaws or in a resolution of the
board of directors which is not inconsistent with the bylaws, and as many officers as
may be necessary to enable the corporation to sign instruments required under the
Nonprofit Corporation Act. One of the officers shall have the duty to record the
proceedings of the meetings of the members and directors in a book to be kept for that
purpose. In the absence of any provision, all officers shall be elected or appointed
annually by the board of directors. If the bylaws so provide, any two or more offices may
be held by the same person.

    B. The articles of incorporation or the bylaws may provide that any one or more
officers of the corporation shall be ex officio members of the board of directors.
    C. The officers of a corporation may be designated by such additional titles as may
be provided in the articles of incorporation or the bylaws.

History: 1953 Comp., § 51-14-65, enacted by Laws 1975, ch. 217, § 23; 1989, ch. 294,
§ 2.

                                               ANNOTATIONS

The 1989 amendment, effective January 1, 1990, in Subsection A, substituted the
present first two sentences for the former first sentence, which read "The officers of a
corporation shall consist of a president, one or more vice presidents, a secretary, a
treasurer and such other officers and assistant officers as may be deemed necessary,
each of whom shall be elected or appointed at such time and in such manner and for
such terms not exceeding three years as may be prescribed in the article of
incorporation or the bylaws", and deleted "except the offices of president and secretary"
from the end of the last sentence.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations § 1341.

19 C.J.S. Corporations §§ 433 to 553.

53-8-24. Removal of officers.

    Any officer elected or appointed may be removed by the persons authorized to elect
or appoint the officer whenever, in their judgment, the best interest of the corporation
will be served thereby. The removal of an officer shall be without prejudice to the
contract rights, if any, of the officer so removed. Election or appointment of an officer or
agent shall not of itself create contract rights.

History: 1953 Comp., § 51-14-66, enacted by Laws 1975, ch. 217, § 24.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations § 1341.

19 C.J.S. Corporations §§ 454 to 457.

53-8-25. Liability.

    The directors, officers, employees and members of the corporation shall not be
personally liable for the corporation's obligations.

History: 1953 Comp., § 51-14-67, enacted by Laws 1975, ch. 217, § 25.

                                               ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1684
to 1720.

Personal liability of member of voluntary association not organized for personal profit on
contract with third person, 7 A.L.R. 222, 41 A.L.R. 754.

53-8-25.1. Duties of directors.

    A director shall perform his duties as a director including his duties as a member of
any committee of the board upon which the director may serve, in good faith, in a
manner the director believes to be in or not opposed to the best interests of the
corporation and with such care as an ordinarily prudent person would use under similar
circumstances in a like position. In performing such duties, a director shall be entitled to
rely on factual information, opinions, reports or statements including financial
statements and other financial data in each case prepared or presented by:

    A. one or more officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matters presented;

    B. counsel, public accountants or other persons as to matters which the director
reasonably believes to be within such persons' professional or expert competence; or

    C. a committee of the board upon which the director does not serve, duly
designated in accordance with a provision of the articles of incorporation or the bylaws
as to matters within its designated authority, which committee the director reasonably
believes to merit confidence, but the director shall not be considered to be acting in
good faith if the director has knowledge concerning the matter in question that would
cause such reliance to be unwarranted.

History: 1978 Comp., § 53-8-25.1, enacted by Laws 1987, ch. 238, § 5.

53-8-25.2. Liability of directors.

    No director of the corporation shall be personally liable to the corporation or its
members for monetary damages for breach of fiduciary duty as a director unless:

    A. the director has breached or failed to perform the duties of the director's office in
compliance with Section 53-8-25.1 NMSA 1978; and

    B. the breach or failure to perform constitutes willful misconduct or recklessness.

    The provisions of this section shall, however, only eliminate the liability of a director
for action taken as a director or any failure to take action as a director at meetings of the
board of directors or of a committee of the board of directors or by virtue of action of the
directors without a meeting pursuant to Section 53-8-97 NMSA 1978, on or after the
date when the provisions of this section become effective.
History: 1978 Comp., § 53-8-25.2, enacted by Laws 1987, ch. 238, § 6.

                                               ANNOTATIONS

Compiler's notes. -- The phrase "the date when the provisions of this section become
effective", in the last sentence, refers to April 9, 1987, the effective date of Laws 1987,
Chapter 238.

53-8-25.3. Nonprofit corporations; boards of directors; liability;
immunity.

    A. Except as otherwise provided in this section, no member of a board of directors
of a nonprofit corporation as defined in the Nonprofit Corporation Act shall be held
personally liable for any damages resulting from:

         (1) any negligent act or omission of an employee of that nonprofit corporation;

         (2) any negligent act or omission of another director of that nonprofit
corporation; or

         (3) any action taken as a director or any failure to take any action as a
director unless:

             (a) the director has breached or failed to perform the duties of the director's
office; and

             (b) the breach or failure to perform constitutes willful misconduct or
recklessness.

    B. The immunity provided in Subsection A of this section shall not extend to acts or
omissions of directors of nonprofit corporations that constitute willful misconduct or
recklessness personal to the director. The immunity is limited to actions taken as a
director at meetings of the board of directors or a committee of the board of directors or
by action of the directors without a meeting pursuant to Section 53-8-97 NMSA 1978.

    C. A nonprofit corporation shall not transfer assets in order to avoid claims against
corporate assets resulting from a judgment against the corporation. If a director votes to
do so, the immunity provided by this section shall have no force or effect as to that
director.

History: Laws 1987, ch. 237, § 1.

                                               ANNOTATIONS

Cross references. -- For liability of directors of nonprofit corporations, see 53-8-25.2
NMSA 1978.
53-8-26. Indemnification of officers and directors.

    Each corporation shall have the power to indemnify any director or officer or former
director or officer of the corporation against reasonable expenses, costs, and attorneys'
fees actually and reasonably incurred by him in connection with the defense of any
action, suit or proceeding, civil or criminal, in which he is made a party by reason of
being or having been a director or officer. The indemnification may include any amounts
paid to satisfy a judgment or to compromise or settle a claim. The director or officer
shall not be indemnified if he shall be adjudged to be liable on the basis that he has
breached or failed to perform the duties of his office and the breach or failure to perform
constitutes willful misconduct or recklessness. Advance indemnification may be allowed
of a director or officer for reasonable expenses to be incurred in connection with the
defense of the action, suit or proceeding provided that the director or officer must
reimburse the corporation if it is subsequently determined that the director or officer was
not entitled to indemnification. Each corporation may make any other indemnification as
authorized by the articles of incorporation or bylaws or by a resolution adopted after
notice by the members entitled to vote. As used in this section "director" means any
person who is or was a director of the corporation and any person who, while a director
of the corporation, is or was serving at the request of the corporation as a director,
officer, partner, trustee, employee or agent of any foreign or domestic corporation or
nonprofit corporation, cooperative, partnership, joint venture, trust, other incorporated or
unincorporated enterprise or employee benefit plan or trust.

History: 1978 Comp., § 53-8-26, enacted by Laws 1981, ch. 40, § 1; 1987, ch. 237, § 2;
1987, ch. 238, § 7.

                                               ANNOTATIONS

Repeals and reenactments. -- Laws 1981, ch. 40, § 1, repealed former 53-8-26
NMSA 1978, relating to indemnification of officers and directors, and enacted a new
section.

Cross references. -- For indemnification of officers and directors, see 53-4-9.1 NMSA
1978.

1987 amendments. -- Laws 1987, ch. 237, § 2, effective June 19, 1987, and Laws
1987, ch. 238, § 7, effective April 9, 1987, enacted different amendments to this section.
The section was set out as amended by Laws 1987, ch. 238, § 7. See 12-1-8 NMSA
1978.

Laws 1987, ch. 238, § 7, effective April 9, 1987, inserted "reasonable" preceding
"expenses" in the first and fourth sentences, in the third sentence, substituted "shall not
be indemnified if he shall be adjudged to be liable on the basis that he has breached or
failed to perform the duties of his office and the breach or failure to perform constitutes
willful misconduct or recklessness" for "shall not be indemnified if he is guilty of
negligence or misconduct in the performance of his duties as a director or officer",
deleted "by reason of negligence or misconduct in the performance of his duties" at the
end of the fourth sentence, and added the last sentence.

Laws 1987, ch. 237, § 2, effective June 19, 1987, designated the provisions of the
former section as present Subsection A, deleted "director or" preceding "officer" in eight
places, and added Subsection B.

Law reviews. -- For article, "Statutory Adoption of Several Liability in New Mexico: A
Commentary and Quasi-Legislative History," see 18 N.M.L. Rev. 483 (1988).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1317,
1897, 1898.

53-8-27. Books and records.

    Each corporation shall keep correct and complete books and records of account and
shall keep minutes of the proceedings of its members, board of directors and
committees having any of the authority of the board of directors. Each corporation shall
keep at its registered office or principal office in New Mexico a record of the names and
addresses of its members entitled to vote. All books and records of a corporation may
be inspected by any member, or his agent or attorney, for any proper purpose at any
reasonable time.

History: 1953 Comp., § 51-14-69, enacted by Laws 1975, ch. 217, § 27.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations § 744.

Right of member of nonprofit association or corporation to possession, inspection, or
use of membership list, 37 A.L.R.4th 1206.

18 C.J.S. Corporations §§ 110, 332 to 338.

53-8-28. Shares of stock and dividends prohibited; exemption from
franchise tax.

    A. A corporation shall not have or issue shares of stock. No dividend shall be paid
and no part of the income, profit or assets of a corporation shall be distributed to its
members, directors or officers. A corporation may pay compensation in a reasonable
amount to its members, directors or officers for services rendered and may confer
benefits upon its members in conformity with its purposes and upon dissolution or final
liquidation may make distributions as permitted by the Nonprofit Corporation Act.

    B. A corporation incorporated under the Nonprofit Corporation Act shall not be
subject to or required to pay a franchise tax unless the corporation receives unrelated
business income, as that term is defined in the Internal Revenue Code of 1986, as
amended.

History: 1953 Comp., § 51-14-70, enacted by Laws 1975, ch. 217, § 28; 1977, ch. 178,
§ 5; 1989, ch. 111, § 3.

                                               ANNOTATIONS

Cross references. -- For the federal Internal Revenue Code of 1986, see U.S.C. § 1 et
seq.

The 1989 amendment, effective June 16, 1989, added all of the language of
Subsection B following "tax".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations § 484.

53-8-29. Loans to directors and officers.

    Any director or officer who assents to or participates in the making of any loan to a
director or officer shall be personally liable to the corporation for the amount of the loan
until the repayment thereof.

History: 1953 Comp., § 51-14-71, enacted by Laws 1975, ch. 217, § 29.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A C.J.S. Corporations § 913.

53-8-30. Incorporators.

    One or more persons, including profit and nonprofit corporations, may incorporate a
corporation by signing and delivering articles of incorporation in duplicate to the
corporation commission [secretary of state].

History: 1953 Comp., § 51-14-72, enacted by Laws 1975, ch. 217, § 30.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations § 150.

18 C.J.S. Corporations § 25 et seq.

53-8-31. Articles of incorporation.

    A. The articles of incorporation shall set forth:

         (1) the name of the corporation;

         (2) the period of duration, which may be perpetual;

         (3) the purpose for which the corporation is organized;

         (4) any provisions not inconsistent with law that the incorporators elect to set
forth in the articles of incorporation for the regulation of the internal affairs of the
corporation, including any provision for distribution of assets on dissolution or final
liquidation;

         (5) the address of its initial registered office and the name of its initial
registered agent at such address;

         (6) the names and addresses of the persons who have consented to serve as
the initial directors; and

         (7) the name and address of each incorporator.

    B. It is not necessary to set forth in the articles of incorporation any of the corporate
powers enumerated in the Nonprofit Corporation Act.

    C. Unless the articles of incorporation provide that a change in the number of
directors shall be made only by amendment to the articles of incorporation, a change in
the number of directors made by amendment to the bylaws shall be controlling. In all
other cases, whenever a provision of the articles of incorporation is inconsistent with a
bylaw, the provision of the articles of incorporation shall be controlling.

History: 1953 Comp., § 51-14-73, enacted by Laws 1975, ch. 217, § 31; 1978 Comp., §
53-8-31; Laws 1991, ch. 170, § 5; 1993, ch. 318, § 2; 2003, ch. 318, § 11.

                                               ANNOTATIONS
The 2003 amendment, effective July 1, 2003, deleted "the number of directors
constituting the initial board of directors and" at the beginning of Paragraph A(6);
substituted "is not" for "shall not be" near the beginning of Subsection B.

The 1993 amendment, effective June 18, 1993, in Subsection A, deleted "or purposes"
after "purpose" in Paragraph (3) and substituted "have consented to serve as the initial
directors" for "are to serve as the initial directors and include a statement that an
affidavit signed by each director stating that he consents to being a director is on file
with the corporation" in Paragraph (6).

The 1991 amendment, effective January 1, 1992, in Subsection A, added "and include
a statement that an affidavit signed by each director stating that he consents to being a
director is on file with the corporation" at the end of Paragraph (6).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 199 to
216.

18 C.J.S. Corporations § 25 et seq.

53-8-32. Filing of articles of incorporation.

    A. An original and a copy, which may be a photocopy of the original after it was
signed or a photocopy that is conformed to the original, of the articles of incorporation
and a statement executed by the designated registered agent in which the agent
acknowledges acceptance of the appointment by the filing corporation as its registered
agent, if the agent is an individual, or a statement executed by an authorized officer of a
corporation that is the designated registered agent in which the officer acknowledges
the corporation's acceptance of the appointment by the filing corporation as its
registered agent, if the agent is a corporation, shall be delivered to the commission
[secretary of state]. If the commission [secretary of state] finds that the articles of
incorporation and the statement conform to law, it shall, when all fees have been paid
as prescribed in the Nonprofit Corporation Act:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing thereof;

         (2) file the original and the statement in the office of the commission
[secretary of state]; and

         (3) issue a certificate of incorporation to which shall be affixed the copy.

    B. The certificate of incorporation, together with the copy of the articles of
incorporation affixed thereto by the commission [secretary of state], shall be returned to
the incorporators or their representative.
History: 1953 Comp., § 51-14-74, enacted by Laws 1975, ch. 217, § 32; 1977, ch. 178,
§ 6; 2003, ch. 318, § 12.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, in Subsection A, substituted "An original
and a copy, which may be a photocopy of the original after it was signed or a photocopy
that is conformed to the original" for "Duplicate originals" at the beginning, substituted
"an authorized officer" for "the president or vice president" preceding "of a corporation",
deleted "corporation" preceding "commission. If the"; substituted "a statement" for "an
affidavit" twice in Subsection A and once in Paragraph A(2); substituted "the original
and copy" for "each of the duplicate originals" near the beginning of Paragraph A(1); in
Paragraph A(2), substituted "the original" for "one of the duplicate originals" near the
beginning, deleted "corporation" near the end; substituted "copy" for "other duplicate
original" at the end of Paragraph A(3); in Subsection B, substituted "copy" for "duplicate
original" preceding "of the articles", and deleted "corporation" preceding "commission,
shall be".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 208,
209, 211, 213.

18 C.J.S. Corporations § 39.

53-8-33. Effect of incorporation.

    Unless the corporation commission [secretary of state] disapproves pursuant to
Subsection A of Section 53-8-91 NMSA 1978, upon delivery of the articles of
incorporation to the corporation commission [secretary of state], the corporate existence
shall begin, and the certificate of incorporation shall be conclusive evidence that all
conditions precedent, required to be performed by the incorporators, have been
complied with and that the corporation has been incorporated under the Nonprofit
Corporation Act, except as against the state in a proceeding to cancel or revoke the
certificate of incorporation or for involuntary dissolution of the corporation.
History: 1953 Comp., § 51-14-75, enacted by Laws 1975, ch. 217, § 33; 1983, ch. 304,
§ 11.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 1983 amendment, effective June 17, 1983, deleted "issuance of certificate of"
preceding "incorporation" in the catchline and substituted "Unless the corporation
commission . . . to the corporation commission," for "Upon the issuance of the certificate
of incorporation" at the beginning of the section.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations § 67.

18 C.J.S. Corporations §§ 45 to 61.

53-8-34. Organization meetings.

    A. An organization meeting of the board of directors named in the articles of
incorporation shall be held, either within or without New Mexico, at the call of a majority
of the incorporators, for the purpose of adopting bylaws, electing officers and the
transaction of such other business as may come before the meeting. The incorporators
calling the meeting shall give at least three days' notice thereof by mail to each director
so named. The notice shall state the time and place of the meeting. The notice shall be
deemed to be delivered when deposited in the United States mail addressed to the
director at his address as it appears on the records of the corporation, with postage
thereon prepaid.

    B. A first meeting of the members may be held at the call of the directors, or a
majority of them, upon at least three days' notice, for the purposes stated in the notice
of the meeting.

History: 1953 Comp., § 51-14-76, enacted by Laws 1975, ch. 217, § 34.

53-8-35. Right to amend articles of incorporation.
    A corporation may amend its articles of incorporation, from time to time, in any and
as many respects as may be desired, so long as its articles of incorporation as
amended contain only such provisions as are lawful under the Nonprofit Corporation
Act.

History: 1953 Comp., § 51-14-77, enacted by Laws 1975, ch. 217, § 35.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations § 79.

Power of state to amend charter of a private incorporated charity, 62 A.L.R. 573.

18 C.J.S. Corporations §§ 54 to 61.

53-8-36. Procedure to amend articles of incorporation.

    A. Amendments to the articles of incorporation shall be made in the following
manner:

         (1) if there are members entitled to vote thereon, the board of directors shall
adopt a resolution setting forth the proposed amendment and directing that it be
submitted to a vote at a meeting of members entitled to vote thereon, which may be
either an annual or a special meeting. Written notice setting forth the proposed
amendment, or a summary of the changes to be effected thereby, shall be given to each
member entitled to vote at the meeting within the time and in the manner provided in the
Nonprofit Corporation Act for the giving of notice of meetings of members. The
proposed amendment shall be adopted upon receiving at least two-thirds of the votes
which members present at the meeting or represented by proxy are entitled to cast; or

         (2) if there are no members, or no members entitled to vote thereon, an
amendment shall be adopted at a meeting of the board of directors upon receiving the
vote of a majority of the directors in office.

    B. Any number of amendments may be submitted and voted upon at any one
meeting.

History: 1953 Comp., § 51-14-78, enacted by Laws 1975, ch. 217, § 36.

53-8-37. Articles of amendment.

    The articles of amendment shall be executed by the corporation by two authorized
officers of the corporation and shall set forth:

    A. the name of the corporation and, if different, include any name under which it
proposes to transact business in New Mexico;
    B. the amendment so adopted;

    C. if there are members entitled to vote thereon:

         (1) a statement setting forth the date of the meeting of members at which the
amendment was adopted, that a quorum was present at the meeting and that the
amendment received at least two-thirds of the votes that members present at the
meeting or represented by proxy were entitled to cast; or

         (2) a statement that the amendment was adopted by a consent in writing
signed by all members entitled to vote with respect thereto; and

    D. if there are no members, or no members entitled to vote thereon, a statement of
such fact, the date of the meeting of the board of directors at which the amendment was
adopted and a statement of the fact that the amendment received the vote of a majority
of the directors in office.

History: 1953 Comp., § 51-14-79, enacted by Laws 1975, ch. 217, § 37; 2003, ch. 318,
§ 13; 2021, ch. 68, § 2.

                                               ANNOTATIONS

The 2021 amendment, effective July 1, 2021, required corporate articles of amendment
to include any name under which the corporation proposes to transact business in New
Mexico if different than the corporate name; and in Subsection A, after "corporation",
added "and, if different, include any name under which it proposes to transact business
in New Mexico".

The 2003 amendment, effective July 1, 2003, in the introductory paragraph, deleted "in
duplicate" following "shall be executed" and substituted "two authorized officers of the
corporation" for "its president or a vice president and by its secretary or an assistant
secretary" following "the corporation by".

53-8-38. Effectiveness of amendment.

    A. An original and a copy, which may be a photocopy of the original after it was
signed or a photocopy that is conformed to the original, of the articles of amendment
shall be delivered to the commission [secretary of state]. If the commission [secretary of
state] finds that the articles of amendment conform to law, it shall, when all fees have
been paid as prescribed in the Nonprofit Corporation Act:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing thereof;

         (2) file the original in the office of the commission [secretary of state]; and
         (3) issue a certificate of amendment to which shall be affixed the copy.

    B. The certificate of amendment, together with the copy of the articles of
amendment affixed thereto by the commission [secretary of state], shall be returned to
the corporation or its representative.

    C. Unless the commission [secretary of state] disapproves pursuant to Subsection A
of Section 53-8-91 NMSA 1978, the amendment shall become effective upon delivery of
the articles of amendment to the commission [secretary of state], or on such later date,
not more than thirty days subsequent to the delivery thereof to the commission
[secretary of state], as shall be provided for in the articles of amendment.

    D. An amendment shall not affect any existing cause of action in favor of or against
the corporation, or any pending action to which the corporation shall be a party or the
existing rights of persons other than members; and, in the event the corporate name
shall be changed by amendment, no action brought by or against the corporation under
its former name shall abate for that reason.

History: 1953 Comp., § 51-14-80, enacted by Laws 1975, ch. 217, § 38; 1983, ch. 304,
§ 12; 2003, ch. 318, § 14.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, substituted "An original and a copy,
which may be a photocopy of the original after it was signed or a photocopy that is
conformed to the original" for "Duplicate originals" at the beginning of Subsection A;
substituted "the original and copy" for "each of the duplicate originals" in Paragraph
A(1); substituted "the original" for "one of the duplicate originals" in Paragraph A(2);
substituted "copy" for "other duplicate original" in Paragraph A(3); substituted "copy" for
"duplicate original" following "together with the" in Subsection B; substituted "An
amendment shall not" for "No amendment shall" at the beginning of Subsection D; and
deleted "corporation" preceding "commission" throughout the section.

The 1983 amendment, effective June 17, 1983, rewrote Subsection C to the extent that
a detailed comparison would be impracticable.
53-8-39. Restated articles of incorporation.

    A. A domestic corporation may at any time restate its articles of incorporation as
amended.

    B. Upon approval by a majority of the directors in office, restated articles of
incorporation shall be executed in duplicate by the corporation by two authorized
officers of the corporation and shall set forth:

         (1) the name of the corporation;

         (2) the period of its duration;

         (3) the purpose or purposes that the corporation is authorized to pursue; and

         (4) any other provisions, not inconsistent with law, that are then set forth in
the articles of incorporation as amended, except that it shall not be necessary to set
forth in the restated articles of incorporation the registered office of the corporation, its
registered agent, its directors or its incorporators.

    C. The restated articles of incorporation shall state that they correctly set forth the
provisions of the articles of incorporation as amended, that they have been duly
approved as required by law and that they supersede the original articles of
incorporation and all amendments thereto.

    D. An original and a copy, which may be a photocopy of the original after it was
signed or a photocopy that is conformed to the original, of the restated articles of
incorporation shall be delivered to the commission [secretary of state]. If the
commission [secretary of state] finds that the restated articles conform to law, it shall,
when all fees have been paid as prescribed in the Nonprofit Corporation Act:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing thereof;

         (2) file the original in the office of the commission [secretary of state]; and

         (3) issue a restated certificate of incorporation to which shall be affixed the
copy.

    E. The restated certificate of incorporation, together with the copy of the restated
articles of incorporation affixed thereto by the commission [secretary of state], shall be
returned to the corporation or its representative.

    F. Upon the issuance of the restated certificate of incorporation by the commission
[secretary of state], the restated articles of incorporation shall become effective and
shall supersede the original articles of incorporation and all amendments thereto.
History: 1953 Comp., § 51-14-81, enacted by Laws 1975, ch. 217, § 39; 2003, ch. 318,
§ 15.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, substituted "two authorized officers of the
corporation" for "its president or vice president and by its secretary or assistant
secretary" following "the corporation by" in Subsection B; substituted "An original and a
copy, which may be a photocopy of the original after it was signed or a photocopy that is
conformed to the original" for "Duplicate originals" at the beginning of Subsection D;
substituted "the original and copy" for "each of the duplicate originals" in Paragraph
D(1); substituted "the original" for "one of the duplicate originals" in Paragraph D(2);
substituted "copy" for "other duplicate original" in Paragraph D(3) and Subsection E; and
deleted "corporation" preceding "commission" throughout the section.

53-8-40. Procedure for merger.

    A. Any two or more domestic corporations may merge into one corporation pursuant
to a plan of merger approved in the manner provided in the Nonprofit Corporation Act.

    B. Each corporation shall adopt a plan of merger setting forth:

         (1) the names of the corporations proposing to merge, and the name of the
corporation into which they propose to merge, which is hereinafter designated as the
surviving corporation;

         (2) the terms and conditions of the proposed merger;

         (3) a statement of any changes in the articles of incorporation of the surviving
corporation to be effected by the merger; and

         (4) such other provisions with respect to the proposed merger as are deemed
necessary or desirable.

History: 1953 Comp., § 51-14-82, enacted by Laws 1975, ch. 217, § 40.
                                               ANNOTATIONS

The Nonprofit Corporation Act does not authorize the secretary of state to
convert a nonprofit corporation to a profit corporation or limited liability
company. -- The Nonprofit Corporation Act (NCA), 53-8-1 to 53-8-99 NMSA 1978,
provides that nonprofit corporations can undergo specific types of transformations,
namely a merger or consolidation into another nonprofit corporation, but no provision of
the NCA provides for other types of entity transformations, such as a conversion to
another type of business entity like a profit corporation or limited liability company (LLC).
Accordingly, the secretary of state cannot convert previously licensed nonprofit
corporation medical cannabis producers to domestic profit corporations or LLCs.
Conversion of Medical Cannabis Distributors Nonprofits (8/27/21), Att'y Gen. Adv. Ltr.
2021-10.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations § 2503.

53-8-41. Procedure for consolidation.

    A. Any two or more domestic corporations may consolidate into a new corporation
pursuant to a plan of consolidation approved in the manner provided in the Nonprofit
Corporation Act.

    B. Each corporation shall adopt a plan of consolidation setting forth:

         (1) the names of the corporations proposing to consolidate, and the name of
the new corporation into which they propose to consolidate, which is hereinafter
designated as the new corporation;

         (2) the terms and conditions of the proposed consolidation;

         (3) with respect to the new corporation, all of the statements required to be
set forth in articles of incorporation for corporations organized under the Nonprofit
Corporation Act; and

         (4) such other provisions with respect to the proposed consolidation as are
deemed necessary or desirable.

History: 1953 Comp., § 51-14-83, enacted by Laws 1975, ch. 217, § 41.

                                               ANNOTATIONS

The Nonprofit Corporation Act does not authorize the secretary of state to
convert a nonprofit corporation to a profit corporation or limited liability
company. -- The Nonprofit Corporation Act (NCA), 53-8-1 to 53-8-99 NMSA 1978,
provides that nonprofit corporations can undergo specific types of transformations,
namely a merger or consolidation into another nonprofit corporation, but no provision of
the NCA provides for other types of entity transformations, such as a conversion to
another type of business entity like a profit corporation or limited liability company (LLC).
Accordingly, the secretary of state cannot convert previously licensed nonprofit
corporation medical cannabis producers to domestic profit corporations or LLCs.
Conversion of Medical Cannabis Distributors Nonprofits (8/27/21), Att'y Gen. Adv. Ltr.
2021-10.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations § 2503.

19 C.J.S. Corporations §§ 792 to 810.

53-8-42. Adoption of merger or consolidation.

    A. A plan of merger or consolidation shall be adopted in the following manner:

         (1) if the members of any merging or consolidating corporation are entitled to
vote thereon, the board of directors of the corporation shall adopt a resolution approving
the proposed plan and directing that it be submitted to a vote at a meeting of members
entitled to vote thereon, which may be either an annual or a special meeting. Written
notice setting forth the proposed plan or a summary thereof shall be given to each
member entitled to vote at the meeting within the time and in the manner provided in the
Nonprofit Corporation Act for the giving of notice of meetings of members. The
proposed plan shall be adopted upon receiving at least two-thirds of the votes which
members present at each such meeting or represented by proxy are entitled to cast; or

         (2) if any merging or consolidating corporation has no members, or no
members entitled to vote thereon, a plan of merger or consolidation shall be adopted at
a meeting of the board of directors of the corporation upon receiving the vote of a
majority of the directors in office.

    B. After adoption, and at any time prior to the filing of the articles of merger or
consolidation, the merger or consolidation may be abandoned pursuant to provisions
therefor, if any, set forth in the plan of merger or consolidation.

History: 1953 Comp., § 51-14-84, enacted by Laws 1975, ch. 217, § 42.

53-8-43. Articles of merger or consolidation.

    A. Upon approval, articles of merger or articles of consolidation shall be executed
by each corporation by two authorized officers of the corporation, and shall set forth:

         (1) the plan of merger or the plan of consolidation;

         (2) if the members of any merging or consolidating corporation are entitled to
vote thereon, then as to each corporation:
             (a) a statement setting forth the date of the meeting of members at which the
plan was adopted, that a quorum was present at the meeting and that the plan received
at least two-thirds of the votes that members present at the meeting or represented by
proxy were entitled to cast; or

             (b) a statement that such amendment was adopted by a consent in writing
signed by all members entitled to vote with respect thereto; and

         (3) if any merging or consolidating corporation has no members, or no
members entitled to vote thereon, then as to each corporation a statement of that fact,
the date of the meeting of the board of directors at which the plan was adopted and a
statement of the fact that the plan received the vote of a majority of the directors in
office.

    B. An original and a copy, which may be a photocopy of the original after it was
signed or a photocopy that is conformed to the original, of the articles of merger or
articles of consolidation shall be delivered to the commission [secretary of state]. If the
commission [secretary of state] finds that the articles conform to law, it shall, when all
fees have been paid as prescribed in the Nonprofit Corporation Act:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing thereof;

         (2) file the original in the office of the commission [secretary of state]; and

         (3) issue a certificate of merger or a certificate of consolidation to which shall
be affixed the copy.

    C. The certificate of merger or certificate of consolidation, together with the copy of
the articles of merger or articles of consolidation affixed thereto by the commission
[secretary of state], shall be returned to the surviving or new corporation or its
representative.

History: 1953 Comp., § 51-14-85, enacted by Laws 1975, ch. 217, § 43; 2003, ch. 318,
§ 16.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, in Subsection A, deleted "in duplicate"
following "shall be executed", substituted "two authorized officers of the corporation" for
"its president or vice president and by its secretary or assistant secretary" following
"each corporation by"; substituted "An original and a copy, which may be a photocopy of
the original after it was signed or a photocopy that is conformed to the original" for
"Duplicate originals" at the beginning of Subsection B; substituted "the original and
copy" for "each of the duplicate originals" in Paragraph B(1); substituted "the original"
for "one of the originals" in Paragraph B(2); substituted "copy" for "other duplicate
original" in Paragraph B(3) and Subsection C; and deleted "corporation" preceding
"commission" throughout the section.

53-8-44. Effect of merger or consolidation.

    A. Unless the corporation commission [secretary of state] disapproves pursuant to
Subsection A of Section 53-8-91 NMSA 1978, the merger or consolidation shall become
effective upon delivery of the articles of merger or of consolidation to the corporation
commission [secretary of state], or on such later date, not more than thirty days
subsequent to the delivery thereof to the corporation commission [secretary of state], as
shall be provided for in the articles.

    B. When a merger or consolidation has been effected:

         (1) the several corporations parties to the plan of merger or consolidation
shall be a single corporation, which, in the case of a merger, shall be that corporation
designated in the plan of merger as the surviving corporation, and, in the case of a
consolidation, shall be the new corporation provided for in the plan of consolidation;

         (2) the separate existence of all corporations parties to the plan of merger or
consolidation, except the surviving or new corporation, shall cease;

         (3) the surviving or new corporation shall have all the rights, privileges,
immunities and powers and shall be subject to all the duties and liabilities of a
corporation organized under the Nonprofit Corporation Act;

         (4) the surviving or new corporation shall thereupon and thereafter possess
all the rights, privileges, immunities and franchises, as well of a public as of a private
nature, of each of the merging or consolidating corporations; and all property, real,
personal and mixed, and all debts due on whatever account, and all other choses in
action, and all and every other interest, of or belonging to or due to each of the
corporations so merged or consolidated, shall be taken and deemed to be transferred to
and vested in the single corporation without further act or deed; and the title to any real
estate, or any interest therein, vested in any of the corporations shall not revert or be in
any way impaired by reason of the merger or consolidation;
         (5) the surviving or new corporation shall thenceforth be responsible and
liable for all the liabilities and obligations of each of the corporations so merged or
consolidated; and any claim existing or action or proceeding pending by or against any
of the corporations may be prosecuted as if the merger or consolidation had not taken
place, or the surviving or new corporation may be substituted in its place. Neither the
rights of creditors nor any liens upon the property of any such corporation shall be
impaired by the merger or consolidation; and

         (6) in the case of a merger, the articles of incorporation of the surviving
corporation shall be deemed to be amended to the extent, if any, that changes in its
articles of incorporation are stated in the plan of merger; and, in the case of a
consolidation, the statements set forth in the articles of consolidation and which are
required or permitted to be set forth in the articles of incorporation of corporations
organized under the Nonprofit Corporation Act shall be deemed to be the articles of
incorporation of the new corporation.

History: 1953 Comp., § 51-14-86, enacted by Laws 1975, ch. 217, § 44; 1983, ch. 304,
§ 13.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 1983 amendment, effective June 17, 1983, rewrote Subsection A to the extent that
a detailed comparison would be impracticable.

53-8-45. Merger or consolidation of domestic and foreign
corporations.

    A. One or more foreign corporations and one or more domestic corporations may be
merged or consolidated in the following manner, if such merger or consolidation is
permitted by the laws of the state under which each foreign corporation is organized:

         (1) each domestic corporation shall comply with the provisions of the
Nonprofit Corporation Act with respect to the merger or consolidation, of domestic
corporations, and each foreign corporation shall comply with the applicable provisions of
the laws of the state under which it is organized; and
         (2) if the surviving or new corporation is to be governed by the laws of any
state other than New Mexico it shall comply with the provisions of the Nonprofit
Corporation Act with respect to foreign corporations if it is to conduct affairs in New
Mexico, and in every case it shall file with the corporation commission [secretary of
state] of New Mexico:

             (a) an agreement that it may be served with process in New Mexico in any
proceeding for the enforcement of any obligation of any domestic corporation which is a
party to such merger or consolidation; and

             (b) an irrevocable appointment of the secretary of state of New Mexico as its
agent to accept service of process in any such proceeding.

    B. The effect of such merger or consolidation shall be the same as in the case of
the merger or consolidation of domestic corporations, if the surviving or new corporation
is to be governed by the laws of New Mexico. If the surviving or new corporation is to be
governed by laws of any state other than New Mexico, the effect of the merger or
consolidation shall be the same as in the case of the merger or consolidation of
domestic corporations except in so far as the laws of the other state provide otherwise.

    C. After approval by the members or, if there are no members entitled to vote
thereon, by the board of directors, and at any time prior to the filing of the articles of
merger or consolidation, the merger or consolidation may be abandoned pursuant to
provisions therefor, if any, set forth in the plan of merger or consolidation.

History: 1953 Comp., § 51-14-87, enacted by Laws 1975, ch. 217, § 45.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-8-46. Sale, lease, exchange or mortgage of assets.

    A sale, lease, exchange, mortgage, pledge or other disposition of all, or substantially
all, the property and assets of a corporation may be made upon such terms and
conditions and for such consideration, which may consist in whole or in part of money or
property, real or personal, including shares of any corporation for profit, domestic or
foreign, as may be authorized in the following manner:

    A. if there are members entitled to vote thereon, the board of directors shall adopt a
resolution recommending the sale, lease, exchange, mortgage, pledge or other
disposition and directing that it be submitted to a vote at a meeting of members entitled
to vote thereon, which may be either an annual or a special meeting. Written notice
stating that the purpose, or one of the purposes, of the meeting is to consider the sale,
lease, exchange, mortgage, pledge or other disposition of all, or substantially all, the
property and assets of the corporation shall be given to each member entitled to vote at
the meeting, within the time and in the manner provided by the Nonprofit Corporation
Act for the giving of notice of meetings of members. At the meeting the members may
authorize the sale, lease, exchange, mortgage, pledge or other disposition and may fix,
or may authorize the board of directors to fix, any or all of the terms and conditions
thereof and the consideration to be received by the corporation therefor. Such
authorization shall require at least two-thirds of the votes which members present at the
meeting or represented by proxy are entitled to cast. After such authorization by a vote
of members, the board of directors, nevertheless, in its discretion, may abandon the
sale, lease, exchange, mortgage, pledge or other disposition of assets, subject to the
rights of third parties under any contracts relating thereto, without further action or
approval by members; or

    B. if there are no members, or no members entitled to vote thereon, a sale, lease,
exchange, mortgage, pledge or other disposition of all, or substantially all, the property
and assets of a corporation shall be authorized upon receiving the vote of a majority of
the directors in office.

History: 1953 Comp., § 51-14-88, enacted by Laws 1975, ch. 217, § 46.

53-8-47. Voluntary dissolution.

    A. A corporation may dissolve and wind up its affairs in the following manner:

         (1) if there are members entitled to vote thereon, the board of directors shall
adopt a resolution recommending that the corporation be dissolved, and directing that
the question of the dissolution be submitted to a vote at a meeting of members entitled
to vote thereon, which may be either an annual or a special meeting. Written notice
stating that the purpose, or one of the purposes, of the meeting is to consider the
advisability of dissolving the corporation, shall be given to each member entitled to vote
at the meeting, within the time and in the manner provided in the Nonprofit Corporation
Act for the giving of notice of meetings of members. A resolution to dissolve the
corporation shall be adopted upon receiving at least two-thirds of the votes which
members present at the meeting or represented by proxy are entitled to cast; or

         (2) if there are no members, or no members entitled to vote thereon, the
dissolution of the corporation shall be authorized at a meeting of the board of directors
upon the adoption of a resolution to dissolve by the vote of a majority of the directors in
office.

    B. Upon the adoption of such resolution by the members, or by the board of
directors if there are no members or no members entitled to vote thereon, the
corporation shall cease to conduct its affairs except in so far as may be necessary for
the winding up thereof, shall immediately cause a notice of the proposed dissolution to
be mailed to each known creditor of the corporation, and shall proceed to collect its
assets and apply and distribute them as provided in the Nonprofit Corporation Act.

History: 1953 Comp., § 51-14-89, enacted by Laws 1975, ch. 217, § 47.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations § 2733.

19 C.J.S. Corporations §§ 811 to 882.

53-8-48. Distribution of assets.

    The assets of a corporation in the process of dissolution shall be applied and
distributed as follows:

    A. all liabilities and obligations of the corporation shall be paid and discharged, or
adequate provision shall be made therefor;

    B. assets held by the corporation upon condition requiring return, transfer or
conveyance, which condition occurs by reason of the dissolution, shall be returned,
transferred or conveyed in accordance with such requirements;

    C. assets received and held by the corporation subject to limitations permitting their
use only for charitable, religious, eleemosynary, benevolent, educational or similar
purposes, but not held upon a condition requiring return, transfer or conveyance by
reason of the dissolution, shall be transferred or conveyed to one or more nonprofit
domestic or foreign corporations, nonprofit societies or nonprofit organizations engaged
in activities substantially similar to those of the dissolving corporation, pursuant to a plan
of distribution adopted as provided in the Nonprofit Corporation Act;

    D. other assets, if any, shall be distributed in accordance with the provisions of the
articles of incorporation or the bylaws, but in no event may any member, former
member, director, former director, officer or former officer receive directly or indirectly
any distribution or portion of a distribution of any assets; and

    E. any remaining assets may be distributed to such persons, nonprofit societies,
nonprofit organizations or nonprofit domestic or foreign corporations whether for profit or
nonprofit as may be specified in a plan of distribution adopted as provided in the
Nonprofit Corporation Act.

History: 1953 Comp., § 51-14-90, enacted by Laws 1975, ch. 217, § 48; 1977, ch. 178,
§ 7.

                                               ANNOTATIONS

Cross references. -- For propriety of distribution upon dissolution, see 53-8-28 NMSA
1978.

Distribution governed by articles of incorporation. -- Assets of a dissolved nonprofit
corporation, where not otherwise restricted by law, are to be distributed in the manner
specified by the corporate bylaws or articles of incorporation. In re Will of Coe, 1992-
NMCA-006, 113 N.M. 355, 826 P.2d 576.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2707,
2720 to 2725.

19 C.J.S. Corporations §§ 861 to 878.

53-8-49. Plan of distribution.

    A plan providing for the distribution of assets, not inconsistent with the provisions of
the Nonprofit Corporation Act, may be adopted by a corporation in the process of
dissolution and shall be adopted by a corporation for the purpose of authorizing any
transfer or conveyance of assets for which the Nonprofit Corporation Act requires a plan
of distribution, in the following manner:

    A. if there are members entitled to vote thereon, the board of directors shall adopt a
resolution recommending a plan of distribution and directing the submission thereof to a
vote at a meeting of members entitled to vote thereon, which may be either an annual or
a special meeting. Written notice setting forth the proposed plan of distribution or a
summary thereof shall be given to each member entitled to vote at the meeting, within
the time and in the manner provided in the Nonprofit Corporation Act for the giving of
notice of meetings of members. The plan of distribution shall be adopted upon receiving
at least two-thirds of the votes which members present at such meeting or represented
by proxy are entitled to cast; or

    B. if there are no members, or no members entitled to vote thereon, a plan of
distribution shall be adopted at a meeting of the board of directors upon receiving a vote
of a majority of the directors in office.

History: 1953 Comp., § 51-14-91, enacted by Laws 1975, ch. 217, § 49.

53-8-50. Revocation of voluntary dissolution proceedings.
    A. A corporation may, at any time prior to the issuance of a certificate of dissolution
by the corporation commission [secretary of state], revoke the action theretofore taken
to dissolve the corporation, in the following manner:

         (1) if there are members entitled to vote thereon, the board of directors shall
adopt a resolution recommending that the voluntary dissolution proceedings be
revoked, and directing that the question of the revocation be submitted to a vote at a
meeting of members entitled to vote thereon, which may be either an annual or a
special meeting. Written notice stating that the purpose, or one of the purposes, of the
meeting is to consider the advisability of revoking the voluntary dissolution proceedings,
shall be given to each member entitled to vote at such meeting, within the time and in
the manner provided in the Nonprofit Corporation Act for the giving of notice of meetings
of members. A resolution to revoke the voluntary dissolution proceedings shall be
adopted upon receiving at least two-thirds of the votes which members present at the
meeting or represented by proxy are entitled to cast; or

         (2) if there are no members, or no members entitled to vote thereon, a
resolution to revoke the voluntary dissolution proceedings shall be adopted at a meeting
of the board of directors upon receiving the vote of a majority of the directors in office.

    B. Upon the adoption of the resolution by the members, or by the board of directors
where there are no members or no members entitled to vote thereon, the corporation
may thereupon again conduct its affairs.

History: 1953 Comp., § 51-14-92, enacted by Laws 1975, ch. 217, § 50.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-8-51. Articles of dissolution.

    If voluntary dissolution proceedings have not been revoked, then when all debts,
liabilities and obligations of the corporation are paid and discharged, or adequate
provision has been made therefor, and all of the remaining property and assets of the
corporation are transferred, conveyed or distributed in accordance with the provisions of
the Nonprofit Corporation Act, articles of dissolution shall be executed by the
corporation by two authorized officers of the corporation, which statement shall set forth:

    A. the name of the corporation;

    B. if there are members entitled to vote thereon:

         (1) a statement setting forth the date of the meeting of members at which the
resolution to dissolve was adopted, that a quorum was present at the meeting and that
the resolution received at least two-thirds of the votes that members present at the
meeting or represented by proxy were entitled to cast; or

         (2) a statement that the resolution was adopted by a consent in writing signed
by all members entitled to vote with respect thereto;

    C. if there are no members, or no members entitled to vote thereon, a statement of
such fact, the date of the meeting of the board of directors at which the resolution to
dissolve was adopted and a statement of the fact that the resolution received the vote of
a majority of the directors in office;

    D. that all debts, obligations and liabilities of the corporation have been paid and
discharged or that adequate provision has been made therefor;

    E. a copy of the plan of distribution, if any, as adopted by the corporation or a
statement that no plan was so adopted;

    F. that all the remaining property and assets of the corporation have been
transferred, conveyed or distributed in accordance with the provisions of the Nonprofit
Corporation Act;

    G. that there are no suits pending against the corporation in any court or that
adequate provision has been made for the satisfaction of any judgment, order or decree
that may be entered against it in any pending suit; and

    H. confirmation that the corporation has resigned as a registered agent or is not
currently a registered agent for any entity registered in New Mexico.

History: 1953 Comp., § 51-14-93, enacted by Laws 1975, ch. 217, § 51; 2003, ch. 318,
§ 17; 2019, ch. 159, § 1.

                                               ANNOTATIONS

The 2019 amendment, effective June 14, 2019, required articles of dissolution to
include confirmation that the corporation has resigned as a registered agent or is not
currently a registered agent for any entity registered in New Mexico; and added
Subsection H.
The 2003 amendment, effective July 1, 2003, substituted "are" for "shall have been"
twice following "of the corporation"; substituted "has" for "shall have" following "or
adequate provision"; deleted "in duplicate" following "shall be executed"; substituted
"two authorized officers of the corporation" for "its president or vice president and by its
secretary or assistant secretary" following "the corporation by"; and deleted
"corporation" preceding "commission" in Paragraph A(2) and Subsection C.

53-8-52. Filing of articles of dissolution.

    A. An original and a copy, which may be a photocopy of the original after it was
signed or a photocopy that is conformed to the original, of the articles of dissolution
shall be delivered to the commission [secretary of state]. If the commission [secretary of
state] finds that such articles of dissolution conform to law, it shall, when all fees have
been paid as prescribed in the Nonprofit Corporation Act:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing thereof;

         (2) file the original in the office of the commission [secretary of state]; and

         (3) issue a certificate of dissolution to which shall be affixed the copy.

    B. The certificate of dissolution, together with the copy of the articles of dissolution
affixed thereto by the commission [secretary of state], shall be returned to the
representative of the dissolved corporation. Upon the issuance of a certificate of
dissolution, the existence of the corporation shall cease, except for the purpose of suits,
other proceedings and appropriate corporate action by members, directors and officers
as provided in the Nonprofit Corporation Act.

History: 1953 Comp., § 51-14-94, enacted by Laws 1975, ch. 217, § 52; 2003, ch. 318,
§ 18.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.
The 2003 amendment, effective July 1, 2003, substituted "An original and a copy,
which may be a photocopy of the original after it was signed or a photocopy that is
conformed to the original" for "Duplicate originals" at the beginning of Subsection A;
substituted "the original and copy" for "each of the duplicate originals" in Paragraph
A(1); substituted "the original" for "one of the originals" in Paragraph A(2); substituted
"copy" for "other duplicate original" in Paragraph A(3); substituted "copy" for "duplicate
original" following "together with the" in Subsection B; and deleted "corporation"
preceding "commission" throughout the section.

53-8-53. Revocation of certificate of incorporation.

    A. The certificate of incorporation of a corporation to conduct affairs in New Mexico
may be revoked by the commission [secretary of state] upon the conditions prescribed
in this section when:

         (1) the corporation has failed to file its annual report within the time required
by the Nonprofit Corporation Act or has failed to pay any fees or penalties prescribed by
that act when they have become due and payable;

         (2) the certificate of incorporation of the corporation was procured through
fraud practiced upon the state;

         (3) the corporation has continued to exceed or abuse the authority conferred
upon it by the Nonprofit Corporation Act; or

         (4) a misrepresentation has been made of any material matter in any
application, report, statement or other document submitted by the corporation pursuant
to the Nonprofit Corporation Act.

    B. A certificate of incorporation of a corporation shall not be revoked by the
commission [secretary of state] unless:

         (1) the commission [secretary of state] has given the corporation not less than
sixty days' notice thereof by mail addressed to the corporation's mailing address as
shown in the most recent corporate report filed with the commission [secretary of state];
and

         (2) the corporation fails prior to revocation to file an annual report, pay fees or
penalties, file articles of amendment or articles of merger or correct a material
misrepresentation in a document submitted by the corporation pursuant to the Nonprofit
Corporation Act.

History: 1953 Comp., § 51-14-95, enacted by Laws 1975, ch. 217, § 53; 2003, ch. 318,
§ 19.

                                               ANNOTATIONS
Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, deleted "corporation" following "revoked
by the" in Subsections A and B; substituted "statement" for "affidavit" following "any
application, report" in Paragraph A(4); in Subsection B, substituted "A" for "No" at the
beginning, inserted "not" following "corporation shall"; substituted "the corporation's
mailing address as shown in the most recent corporate report filed with the commission"
for "its registered office" near the end of Paragraph B(1); in Paragraph B(2), deleted "or"
following "an annual report", deleted "of" following "fees or penalties", and substituted
"a" for "any" following "material misrepresentation in".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2734,
2740, 2741, 2746, 2788 to 2810, 2822, 2824.

53-8-54. Issuance of certificate of revocation.

    A. Upon revoking a certificate of incorporation, the commission [secretary of state]
shall:

         (1) issue a certificate of revocation in duplicate;

         (2) file one of the certificates in its office; and

         (3) mail to the corporation at the corporation's mailing address as shown in
the most recent corporate report filed with the commission [secretary of state] a notice
of the revocation accompanied by one of the certificates.

    B. Upon the issuance of a certificate of revocation, the authority of the corporation
to conduct affairs in New Mexico ceases.

    C. A corporation administratively revoked under Section 53-8-53 NMSA 1978 may
apply to the commission [secretary of state] for reinstatement within two years after the
effective date of revocation. The application shall:

         (1) recite the name of the corporation and the effective date of its
administrative revocation;
         (2) state that the ground or grounds for revocation either did not exist or have
been eliminated; and

         (3) state that the corporation's name satisfies the requirements of Section 53-
8-7 NMSA 1978.

    D. If the commission [secretary of state] determines that the application contains the
information required by Subsection C of this section and that the information is correct,
it shall cancel the certificate of revocation and prepare a certificate of reinstatement that
recites its determination and the effective date of reinstatement, file the original of the
certificate and serve a copy on the corporation.

    E. When the reinstatement is effective, it relates back to and takes effect as of the
effective date of the administrative revocation and the corporation resumes carrying on
its business as if the administrative revocation had never occurred.

History: 1953 Comp., § 51-14-96, enacted by Laws 1975, ch. 217, § 54; 2001, ch. 200,
§ 38; 2003, ch. 318, § 20.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, substituted "the corporation's mailing
address as shown in the most recent corporate report filed with the commission" for "its
registered office" in Paragraph A(3).

The 2001 amendment, effective July 1, 2001, added Subsections C, D and E.

53-8-55. Jurisdiction of court to liquidate assets and affairs of
corporation.

    A. District courts shall have full power to liquidate the assets and affairs of a
corporation:

         (1) in an action by a member or director when it is made to appear that:
             (a) the directors are deadlocked in the management of the corporate affairs
and that irreparable injury to the corporation is being suffered or is threatened by reason
thereof, and either that the members are unable to break the deadlock or there are no
members having voting rights; or

             (b) the acts of the directors or those in control of the corporation are illegal,
oppressive or fraudulent; or

             (c) the members entitled to vote in the election of directors are deadlocked in
voting power and have failed for at least two years to elect successors to directors
whose terms have expired or would have expired upon the election of their successors;
or

             (d) the corporate assets are being misapplied or wasted; or

             (e) the corporation is unable to carry out its purposes;

         (2) in an action by a creditor when:

             (a) the claim of the creditor has been reduced to judgment and an execution
thereon has been returned unsatisfied and it is established that the corporation is
insolvent; or

             (b) the corporation has admitted in writing that the claim of the creditor is due
and owing and it is established that the corporation is insolvent; or

         (3) upon application by a corporation to have its dissolution continued under
the supervision of the court.

    B. Proceedings under this section shall be brought in the county in which the
registered office or the principal office of the corporation is situated.

    C. It shall not be necessary to make directors or members parties to any such action
or proceedings unless relief is sought against them personally.

History: 1953 Comp., § 51-14-97, enacted by Laws 1975, ch. 217, § 55.

                                               ANNOTATIONS

Standing. -- Where former members of a nonprofit corporation sought to liquidate the
corporation and the district court found that the corporation had no members and that
no members qualified to engage in corporate acts or otherwise carry out corporate
business, the former members did not have standing to initiate an action to liquidate the
corporation and the district court did not have subject matter jurisdiction to proceed with
the liquidation action. Disabled Am. Veterans v. Lakeside Veterans Club, Inc., 2011-
NMCA-099, 150 N.M. 569, 263 P.3d 911, cert. denied, 2011-NMCERT-009, 269 P.3d
903.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations § 2812.

19 C.J.S. Corporations § 816.

53-8-56. Procedure in liquidation of corporation by court.

    A. In proceedings to liquidate the assets and affairs of a corporation the district
court shall have the power to issue injunctions; to appoint a receiver or receivers
pendente lite, with such powers and duties as the court, from time to time, may direct;
and to take such other proceedings as may be requisite to preserve the corporate
assets wherever situated, and carry on the affairs of the corporation until a full hearing
can be had.

    B. After a hearing had upon such notice as the district court may direct to be given
to all parties to the proceedings and to any other parties in interest designated by the
court, the court may appoint a liquidating receiver or receivers with authority to collect
the assets of the corporation. The liquidating receiver or receivers shall have authority,
subject to the order of the court, to sell, convey and dispose of all or any part of the
assets of the corporation wherever situated, either at public or private sale. The order
appointing the liquidating receiver or receivers shall state their powers and duties. The
powers and duties may be increased or diminished at any time during the proceedings.

    C. The assets of the corporation or the proceeds resulting from a sale, conveyance
or other disposition thereof shall be applied and distributed as follows:

         (1) all costs and expenses of the court proceedings and all liabilities and
obligations of the corporation shall be paid, satisfied and discharged, or adequate
provision shall be made therefor;

         (2) assets held by the corporation upon condition requiring return, transfer or
conveyance, which condition occurs by reason of the dissolution or liquidation, shall be
returned, transferred or conveyed in accordance with the requirements;

         (3) assets received and held by the corporation subject to limitations
permitting their use only for charitable, religious, eleemosynary, benevolent, educational
or similar purposes, but not held upon a condition requiring return, transfer or
conveyance by reason of the dissolution or liquidation, shall be transferred or conveyed
to one or more domestic or foreign corporations, societies or organizations engaged in
activities substantially similar to those of the dissolving or liquidating corporation as the
court may direct;

         (4) other assets, if any, shall be distributed in accordance with the provisions
of the articles of incorporation or the bylaws to the extent that the articles of
incorporation or bylaws determine the distributive right of members, or any class or
classes of members, or provide for distribution to others; and

         (5) any remaining assets may be distributed to such persons, societies,
organizations or domestic or foreign corporations, whether for profit or not for profit,
specified in the plan of distribution adopted as provided in the Nonprofit Corporation Act,
or where no plan of distribution has been adopted, as the court may direct.

    D. The district court shall have power to allow, from time to time, as expenses of the
liquidation, compensation to the receiver or receivers and to attorneys in the
proceeding, and to direct the payment thereof out of the assets of the corporation or the
proceeds of any sale or disposition of the assets.

    E. A receiver of a corporation appointed under the provisions of this section shall
have authority to sue and defend in all courts in his own name as receiver of the
corporation. The district court appointing the receiver shall have exclusive jurisdiction of
the corporation and its property, wherever situated.

History: 1953 Comp., § 51-14-98, enacted by Laws 1975, ch. 217, § 56.

                                               ANNOTATIONS

Cross references. -- For propriety of distribution upon dissolution, see 53-8-28 NMSA
1978.

53-8-57. Qualification of receivers.

    A receiver shall in all cases be a citizen of the Unites [United] States or a corporation
for profit authorized to act as receiver, which corporation may be a domestic corporation
or a foreign corporation authorized to transact business in New Mexico and shall in all
cases give bond as the court may direct with sureties as the court may require.

History: 1953 Comp., § 51-14-99, enacted by Laws 1975, ch. 217, § 57.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 C.J.S. Corporations § 773.

53-8-58. Filing of claims in liquidation proceedings.

    In proceedings to liquidate the assets and affairs of a corporation the district court
may require all creditors of the corporation to file with the clerk of the court or with the
receiver, in a form the court may prescribe, proofs under oath of their respective claims.
If the court requires the filing of claims, it shall fix a date, which shall be not less than
four months from the date of the order, as the last day for the filing of claims, and shall
prescribe the notice that shall be given to creditors and claimants of the date so fixed.
Prior to the date so fixed, the court may extend the time for the filing of claims. Creditors
and claimants failing to file proofs of claim on or before the date so fixed may be barred,
by order of court, from participating in the distribution of the assets of the corporation.

History: 1953 Comp., § 51-14-100, enacted by Laws 1975, ch. 217, § 58.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2862 to
2870, 2873.

19 C.J.S. Corporations § 872.

53-8-59. Discontinuance of liquidation proceedings.

    The liquidation of the assets and affairs of a corporation may be discontinued at any
time during the liquidation proceedings when it is established that cause for liquidation
no longer exists. In such event the court shall dismiss the proceedings and direct the
receiver to redeliver to the corporation all its remaining property and assets.

History: 1953 Comp., § 51-14-101, enacted by Laws 1975, ch. 217, § 59.

53-8-60. Decree of involuntary dissolution.

    In proceedings to liquidate the assets and affairs of a corporation, when the costs
and expenses of the proceedings and all debts, obligations and liabilities of the
corporation have been paid and discharged and all of its remaining property and assets
distributed in accordance with the provisions of the Nonprofit Corporation Act, or in case
its property and assets are not sufficient to satisfy and discharge the costs, expenses,
debts and obligations, and all the property and assets have been applied so far as they
will go to their payment, the district court shall enter a decree dissolving the corporation,
whereupon the existence of the corporation shall cease.

History: 1953 Comp., § 51-14-102, enacted by Laws 1975, ch. 217, § 60.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 C.J.S. Corporations § 849.

53-8-61. Filing of decree of dissolution.

    In case the district court enters a decree dissolving a corporation, it shall be the duty
of the clerk of the court to file a certified copy of the decree with the corporation
commission [secretary of state]. No fee shall be charged by the commission [secretary
of state] for the filing thereof.

History: 1953 Comp., § 51-14-103, enacted by Laws 1975, ch. 217, § 61.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-8-62. Deposits with state treasurer.

    Upon the voluntary or involuntary dissolution of a corporation, the portion of the
assets distributable to any person who is unknown or cannot be found, or who is under
disability and there is no person legally competent to receive the distributive portion,
shall be reduced to cash and deposited with the state treasurer and shall be paid over
to such person or to his legal representative upon proof satisfactory to the state
treasurer of his right thereto.

History: 1953 Comp., § 51-14-104, enacted by Laws 1975, ch. 217, § 62.

53-8-63. Survival of remedy after dissolution.

    The dissolution of a corporation either by the issuance of a certificate of dissolution
by the corporation commission [secretary of state], or by a decree of court when the
court has not liquidated the assets and affairs of the corporation as provided in the
Nonprofit Corporation Act, or by expiration of its period of duration, shall not take away
or impair any remedy available to or against the corporation, its directors, officers or
members, for any right or claim existing, or any liability incurred, prior to the dissolution
if action or other proceeding thereon is commenced within two years after the date of
dissolution. Any such action or proceeding by or against the corporation may be
prosecuted or defended by the corporation in its corporate name. The members,
directors and officers shall have power to take such corporate or other action as shall be
appropriate to protect such remedy, right or claim. If the corporation was dissolved by
the expiration of its period of duration, the corporation may amend its articles of
incorporation at any time during such period of two years so as to extend its period of
duration.
History: 1953 Comp., § 51-14-105, enacted by Laws 1975, ch. 217, § 63.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Applicability to prior dissolutions. -- Statutes concerning the survival period of a
corporation after dissolution are generally construed as procedural rather than
substantive; as a remedial or procedural matter, the survival period adopted after
dissolution may apply to corporations dissolved before the effective date of the new
survival statute. Quintana v. Los Alamos Med. Ctr., Inc., 1994-NMCA-162, 119 N.M.
312, 889 P.2d 1234.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2896,
2897.

Service of process on dissolved domestic corporation in absence of express statutory
direction, 75 A.L.R.2d 1399.

19 C.J.S. Corporations § 861 et seq.

53-8-64. Admission of foreign corporation.

    A. No foreign corporation has the right to conduct affairs in New Mexico until it has
procured a certificate of authority to do so from the corporation commission [secretary of
state]. No foreign corporation is entitled to procure a certificate of authority under the
Nonprofit Corporation Act to conduct in New Mexico any affairs which a corporation
organized under that act is prohibited from conducting. A foreign corporation shall not
be denied a certificate of authority by reason of the fact that the laws of the state or
country under which the corporation is organized governing its organization and internal
affairs differ from the laws of this state. Nothing in the Nonprofit Corporation Act shall be
construed to authorize this state to regulate the organization or the internal affairs of
such corporation.

    B. Without excluding other activities which may not constitute conducting affairs in
New Mexico, a foreign corporation shall not be considered to be conducting affairs in
this state, for the purposes of the Nonprofit Corporation Act, by reason of carrying on in
this state any one or more of the following activities:

         (1) maintaining or defending any action or suit or any administrative or
arbitration proceeding or effecting the settlement thereof or the settlement of claims or
disputes;

         (2) holding meetings of its directors or members or carrying on other activities
concerning its internal affairs;

         (3) maintaining bank accounts;

         (4) creating evidences of debt, mortgages or liens on real or personal
property;

         (5) securing or collecting debts due to it or enforcing any rights in property
securing the same;

         (6) conducting its affairs in interstate commerce;

         (7) granting funds;

         (8) distributing information to its members; and

         (9) conducting an isolated transaction completed within a period of thirty days
and not in the course of a number of repeated transactions of like nature.

History: 1953 Comp., § 51-14-106, enacted by Laws 1975, ch. 217, § 64.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Cross references. -- For effect of conducting affairs in state without certificate, see 53-
8-81 NMSA 1978.
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §
170.

Applicability to corporations not organized for profit of statutes prescribing conditions
under which foreign corporations may do business within state, 37 A.L.R. 1283.

19 C.J.S. Corporations § 901 et seq.

53-8-65. Powers of foreign corporation.

    A foreign corporation which has received a certificate of authority under the
Nonprofit Corporation Act shall, until a certificate of revocation or of withdrawal has
been issued as provided in that act, enjoy the same, but no greater, rights and
privileges as a domestic corporation organized for the purposes set forth in the
application pursuant to which the certificate of authorization is issued; and, except as
otherwise provided in the Nonprofit Corporation Act, shall be subject to the same duties,
restrictions, penalties and liabilities now or hereafter imposed upon a domestic
corporation of like character.

History: 1953 Comp., § 51-14-107, enacted by Laws 1975, ch. 217, § 65.

53-8-66. Corporate name of foreign corporation.

    No certificate of authority shall be issued to a foreign corporation unless the
corporate name of the corporation and, if different, the name under which it proposes to
transact business in New Mexico:

    A. shall not contain any word or phrase that indicates or implies that it is organized
for any purpose other than one or more of the purposes contained in its articles of
incorporation;

    B. shall not be the same as, or confusingly similar to, the name of any corporation,
whether for profit or not for profit, existing under the laws of New Mexico, or foreign
corporation, whether for profit or not for profit, authorized to transact business or
conduct affairs in this state, or a corporate name reserved or registered as permitted by
the laws of this state; and

    C. shall be expressed in English letters.

History: 1953 Comp., § 51-14-108, enacted by Laws 1975, ch. 217, § 66; 2021, ch. 68,
§ 3.

                                               ANNOTATIONS

The 2021 amendment, effective July 1, 2021, applied the provisions of this section to
the name under which a corporation proposes to transact business in New Mexico if it is
different than the corporate name; and in the introductory paragraph, after "name of the
corporation", added "and, if different, the name under which it proposes to transact
business in New Mexico".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §§
163 to 169.

19 C.J.S. Corporations § 889.

53-8-67. Change of name by foreign corporation.

    Whenever a foreign corporation which is authorized to conduct affairs in New Mexico
changes its name to one under which a certificate of authority would not be granted to it
on application therefor, the certificate of authority of the corporation shall be suspended
and it shall not conduct any affairs in New Mexico until it has changed its name to a
name which is available to it under the laws of this state.

History: 1953 Comp., § 51-14-109, enacted by Laws 1975, ch. 217, § 67.

53-8-68. Application for certificate of authority.

    A. A foreign corporation, in order to procure a certificate of authority to conduct
affairs in New Mexico, shall make application to the commission [secretary of state],
which application shall set forth:

         (1) the name of the corporation and the state or country under the laws of
which it is incorporated;

         (2) the date of incorporation and the period of duration of the corporation;

         (3) the address of the registered office of the corporation in the state or
country under the laws of which it is incorporated and the address of the principal office
of the corporation, if different from the address of the registered office;

         (4) the address of the proposed registered office of the corporation in New
Mexico and the name of its proposed registered agent in this state at such address;

         (5) the purpose or purposes of the corporation that it proposes to pursue in
conducting its affairs in New Mexico;

         (6) the names and respective addresses of the directors and officers of the
corporation; and

         (7) such additional information as may be necessary or appropriate in order to
enable the commission [secretary of state] to determine whether the corporation is
entitled to a certificate of authority to conduct affairs in New Mexico.
    B. The application shall be made on forms prescribed by the commission [secretary
of state], or on forms containing substantially the same information as forms prescribed
by the commission [secretary of state], and shall be executed by the corporation by two
authorized officers of the corporation.

History: 1953 Comp., § 51-14-110, enacted by Laws 1975, ch. 217, § 68; 1977, ch.
178, § 8; 2003, ch. 318, § 21.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, deleted "corporation" following
"application to the" in Subsection A and following "to enable the" in Paragraph A(7); and
rewrote Subsection B.

53-8-69. Filing of application for certificate of authority.

    A. The following documents shall be delivered to the secretary of state:

         (1) an original of the application of the corporation for a certificate of authority
and a certificate of good standing and compliance issued by the appropriate official of
the state or country under the laws of which the corporation is incorporated that is
current within thirty days and that has not expired by the time of receipt by the
secretary;

         (2) a statement executed by the designated registered agent in which the
agent acknowledges acceptance of the appointment by the filing corporation as its
registered agent, if the agent is an individual, or a statement executed by an authorized
officer of a corporation that is the designated registered agent, in which the officer
acknowledges the corporation's acceptance of the appointment by the filing corporation
as its registered agent, if the agent is a corporation; and

         (3) a copy of whichever statement is filed pursuant to Paragraph (2) of this
subsection, which may be a photocopy of the original after it was signed or a photocopy
that is conformed to the original.
    B. If the secretary of state finds that the application and the affidavit conform to law,
the secretary shall, when all fees have been paid as prescribed in the Nonprofit
Corporation Act:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing thereof;

         (2) file in the office of the secretary the original of the application and the
statement; and

         (3) issue a certificate of authority to conduct affairs in New Mexico to which
shall be affixed the application copy.

    C. The certificate of authority, together with the application affixed thereto by the
secretary of state, shall be returned to the corporation or its representative.

History: 1953 Comp., § 51-14-111, enacted by Laws 1975, ch. 217, § 69; 1977, ch.
178, § 9; 1983, ch. 304, § 14; 2003, ch. 318, § 22; 2015, ch. 66, § 5.

                                               ANNOTATIONS

The 2015 amendment, effective July 1, 2015, required the filing of the corporate
application for certificate of authority to be filed with the secretary of state; in the
introductory sentence of Subsection A, after "delivered to the", deleted "commission"
and added "secretary of state"; in Paragraph (1) of Subsection A, after "corporation is
incorporated", added "that is current within thirty days and that has not expired by the
time of receipt by the secretary"; in the introductory sentence of Subsection B, after "If
the", deleted "commission" and added "secretary of state", after "conform to law",
deleted "it" and added "the secretary"; in Paragraph (2) of Subsection B, after "office of
the", deleted "commission" and added "secretary"; and in Subsection C, after "affixed
thereto by the", deleted "commission" and added "secretary of state".

The 2003 amendment, effective July 1, 2003, rewrote Subsection A; substituted "the
original and copy" for "each of the documents" near the beginning of Paragraph B(1); in
Paragraph B(2), substituted "original" for "duplicate originals" following "commission
the", substituted "statement" for "affidavit" near the end; substituted "application copy"
for "other duplicate original application" at the end of Paragraph B(3); deleted "duplicate
original of the" following "together with the" in Subsection C; and deleted "corporation"
preceding "commission" throughout section.

The 1983 amendment, effective June 17, 1983, inserted "in which the officer . . . as its
registered agent" near the end of Subsection A, deleted "together with a copy of its
articles of incorporation, or restated articles of incorporation, and all amendments
thereto, duly certified by the proper officer of the state or country under the laws of
which it is incorporated" at the end of Subsection A, substituted "and" for a comma
following "application" and deleted "and the copy of the articles of incorporation, or the
restated articles of incorporation, and amendments thereto" at the end of Paragraph (2)
of Subsection B.

53-8-70. Effect of [certificate of] authority.

    Unless the corporation commission [secretary of state] disapproves pursuant to
Subsection A of Section 53-8-91 NMSA 1978, upon delivery of the application for a
certificate of authority to the corporation commission [secretary of state], the corporation
shall be authorized to conduct affairs in New Mexico for those purposes set forth in its
application, subject, however, to the right of this state to suspend or to revoke such
authority as provided in the Nonprofit Corporation Act.

History: 1953 Comp., § 51-14-112, enacted by Laws 1975, ch. 217, § 70; 1983, ch.
304, § 15.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 1983 amendment, effective June 17, 1983, substituted "Unless the corporation
commission . . . to the corporation commission," for "Upon the issuance of a certificate
of authority by the corporation commission."

53-8-71. Registered office and registered agent of foreign
corporation.

    Each foreign corporation authorized to conduct affairs in New Mexico shall have and
continuously maintain in this state:

    A. a registered office which may be, but need not be, the same as its principal
office; and

    B. a registered agent, which agent may be either an individual resident in New
Mexico whose business office is identical with the registered office, or a domestic
corporation, whether for profit or not for profit, or a foreign corporation, whether for profit
or not for profit, authorized to transact business or conduct affairs in this state, having
an office identical with the registered office.
History: 1953 Comp., § 51-14-113, enacted by Laws 1975, ch. 217, § 71.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §§
229, 233.

19 C.J.S. Corporations §§ 902, 909, 955.

53-8-72. Change of registered office or registered agent of foreign
corporation.

    A. A foreign corporation authorized to conduct affairs in New Mexico may change its
registered office or change its registered agent, or both, upon filing in the office of the
commission [secretary of state] a statement setting forth:

         (1) the name of the corporation;

         (2) the address of its then registered office;

         (3) if the address of its registered office is changed, the address to which the
registered office is to be changed;

         (4) the name of its registered agent;

         (5) if its registered agent is changed:

             (a) the name of its successor registered agent; and

             (b) a statement executed by the successor registered agent in which the
agent acknowledges acceptance of the appointment by the filing corporation as its
registered agent, if the agent is an individual, or a statement executed by an authorized
officer of a corporation that is the successor registered agent in which the officer
acknowledges the corporation's acceptance of the appointment by the filing corporation
as its registered agent, if the agent is a corporation; and

         (6) that the address of its registered office and the address of the office of its
registered agent, as changed, will be identical.

    B. Such statement shall be executed by the corporation by an authorized officer of
the corporation and delivered to the commission [secretary of state]. If the commission
[secretary of state] finds that such statement conforms to the provisions of the Nonprofit
Corporation Act, it shall file the statement in its office, and upon such filing, the change
of address of the registered office or the appointment of a new registered agent, or both,
shall become effective.
    C. A registered agent in New Mexico appointed by a foreign corporation may resign
as agent upon filing an originally executed notice and a copy, which may be a
photocopy of the original after it was signed or a photocopy that is conformed to the
original, with the commission [secretary of state], which shall mail a copy to the foreign
corporation at its principal office in the state or country under the laws of which it is
incorporated as shown by its most recent annual report. The appointment of an agent
shall terminate upon the expiration of thirty days after receipt of such notice by the
commission [secretary of state].

    D. If a registered agent changes its business address to another place within the
same county, it may change such address and the address of the registered office of
any corporations of which it is the registered agent by filing a statement as required
above except that it need be signed only by the registered agent and need not be
responsive to the provisions of Paragraphs (5) and (7) of Subsection A of this section
and must recite that a copy of the statement has been mailed to each such corporation.

History: 1953 Comp., § 51-14-114, enacted by Laws 1975, ch. 217, § 72; 1977, ch.
178, § 10; 2003, ch. 318, § 23.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, deleted "corporation" following "office of
the" in Subsection A; substituted "is" for "be" in Paragraph A(5); in Subparagraph
A(5)(b), substituted "a statement" for "an affidavit" at the beginning, substituted "a
statement executed by an authorized officer" for "an affidavit executed by the president
or vice president" following "an individual, or"; deleted Paragraph A(7) which read: "that
such changes was authorized by resolution duly adopted by its board of directors";
substituted "an authorized officer of the corporation and delivered to the" for "its
president or vice president and delivered to the corporation" following "by the
corporation" in Subsection B; in Subsection C, substituted "an originally executed notice
and a copy, which may be a photocopy of the original after it was signed or a photocopy
that is conformed to the original, with the commission, which" for "a written notice
executed in duplicate, with the corporation commission, who" following "agent upon
filing", deleted "corporation" near the end; in Subsection D, deleted "his or" following
"registered agent changes", deleted "he or" following "the same county" and following
"corporations of which".

53-8-73. Service of process on foreign corporation.

    The registered agent appointed by a foreign corporation authorized to transact
business in New Mexico shall be an agent of the corporation upon whom any process,
notice or demand required or permitted by law to be served upon the corporation may
be served. Nothing in this section limits or affects the right to serve any process, notice
or demand, required or permitted by law to be served upon a corporation in any other
manner now or hereafter permitted by law.

History: 1953 Comp., § 51-14-115, enacted by Laws 1975, ch. 217, § 73.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §§
229, 233, 234.

19 C.J.S. Corporations §§ 952 to 961.

53-8-74. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1983, ch. 304, § 73, repealed 53-8-74 NMSA 1978, as enacted by
Laws 1975, ch. 217, § 74, relating to amendment of the articles of incorporation of a
foreign corporation, effective June 17, 1983.

53-8-75. Merger of foreign corporation authorized to conduct affairs
in this state.

    Whenever a foreign corporation authorized to conduct affairs in New Mexico is a
party to a statutory merger permitted by the laws of the state or country under the laws
of which it is incorporated, it shall, within thirty days after the merger becomes effective,
file with the corporation commission [secretary of state] a copy of the articles of merger
duly certified by the proper officer of the state or country under the laws of which the
statutory merger was effected. It shall not be necessary for such corporation to procure
either a new or amended certificate of authority to conduct affairs in this state unless the
name of the corporation is changed by the merger or unless the corporation desires to
pursue in New Mexico other or additional purposes than those which it is then
authorized to pursue in New Mexico or unless the surviving corporation is to conduct
affairs in New Mexico but has not procured a certificate of authority to conduct affairs in
this state.
History: 1953 Comp., § 51-14-117, enacted by Laws 1975, ch. 217, § 75; 1983, ch.
304, § 16.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 1983 amendment, effective June 17, 1983, deleted "and such corporation shall be
the surviving corporation," preceding "it shall" in the first sentence and added "or unless
the surviving corporation . . . in this state" at the end of the last sentence.

53-8-76. Amended certificate of authority.

    A. A foreign corporation authorized to conduct affairs in New Mexico shall procure
an amended certificate of authority in the event it changes its corporate name or desires
to pursue in New Mexico other or additional purposes than those set forth in its prior
application for a certificate of authority by making application therefor to the commission
[secretary of state].

    B. The requirements in respect to the form and contents of the application, the
manner of its execution, the filing of an original and a copy, which may be a photocopy
of the original after it was signed or a photocopy that is conformed to the original, with
the commission [secretary of state], the issuance of an amended certificate of authority
and the effect thereof shall be the same as in the case of an original application for a
certificate of authority.

History: 1953 Comp., § 51-14-118, enacted by Laws 1975, ch. 217, § 76; 2003, ch.
318, § 24.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, deleted "corporation" preceding
"commission" in Subsections A and B and Paragraph A(5); substituted "it" for "him" at
the end of Paragraph A(5); and substituted "two authorized officers of the corporation"
for "its president or a vice president and by its secretary or an assistant secretary"
following "furnished by the" in Subsection B.

53-8-77. Withdrawal of foreign corporation.

    A. A foreign corporation authorized to conduct affairs in New Mexico may withdraw
from this state upon procuring from the secretary of state a certificate of withdrawal. In
order to procure the certificate of withdrawal, the foreign corporation shall deliver to the
secretary of state an application for withdrawal, which shall set forth:

         (1) the name of the corporation and the state or country under the laws of
which it is incorporated;

         (2) that the corporation is not conducting affairs in New Mexico;

         (3) that the corporation surrenders its authority to conduct affairs in New
Mexico;

         (4) that the corporation revokes the authority of its registered agent in New
Mexico to accept service of process and consents that service of process in any action,
suit or proceeding based upon any cause of action arising in this state during the time
the corporation was authorized to conduct affairs in this state may thereafter be made
on the corporation by service thereof on the secretary of state;

         (5) a post office address to which the secretary of state may mail a copy of
any process against the corporation that may be served on it; and

         (6) confirmation that the corporation has resigned as a registered agent or is
not currently a registered agent for any entity registered in New Mexico.

    B. The application for withdrawal shall be made on forms prescribed and furnished
by the secretary of state and shall be executed by the corporation by two authorized
officers of the corporation or, if the corporation is in the hands of a receiver or trustee,
shall be executed on behalf of the corporation by the receiver or trustee.

History: 1953 Comp., § 51-14-119, enacted by Laws 1975, ch. 217, § 77; 2003, ch.
318, § 25; 2019, ch. 159, § 2.
                                               ANNOTATIONS

The 2019 amendment, effective July 1, 2019, provided that a foreign corporation
desiring to withdraw from this state must procure from the secretary of state a certificate
of withdrawal and must deliver to the secretary of state an application for withdrawal,
which must include confirmation that the corporation has resigned as a registered agent
or is not currently a registered agent for any entity registered in New Mexico; in
Subsection A, in the introductory clause, after "procuring from the", deleted
"commission" and added "secretary of state", and after "deliver to the", deleted
"commission" and added "secretary of state", in Paragraph A(5), after "which the",
deleted "commission" and added "secretary of state", and added Paragraph A(6); and in
Subsection B, after "furnished by the", deleted "commission" and added "secretary of
state".

The 2003 amendment, effective July 1, 2003, substituted "An original and a copy,
which may be a photocopy of the original after it was signed or a photocopy that is
conformed to the original" for "Duplicate originals" at the beginning of Subsection A;
substituted "the original and copy" for "each of the duplicate originals" in Paragraph
A(1); substituted "the original" for "one of the duplicate originals" in Paragraph A(2);
substituted "copy" for "other duplicate original" in Paragraph A(3); substituted "copy" for
"duplicate original" following "together with the" in Subsection B; and deleted
"corporation" preceding "commission" throughout the section.

53-8-78. Filing of application for withdrawal.

    A. An original and a copy, which may be a photocopy of the original after it was
signed or a photocopy that is conformed to the original, of the application for withdrawal
shall be delivered to the commission [secretary of state]. If the commission [secretary of
state] finds that the application conforms to the provisions of the Nonprofit Corporation
Act, it shall, when all fees have been paid as prescribed in that act:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing thereof;

         (2) file the original in the office of the commission [secretary of state]; and

         (3) issue a certificate of withdrawal to which shall be affixed the copy.

    B. The certificate of withdrawal, together with the copy of the application for
withdrawal affixed thereto by the commission [secretary of state], shall be returned to
the corporation or its representative. Upon the issuance of the certificate of withdrawal,
the authority of the corporation to conduct affairs in New Mexico shall cease.

History: 1953 Comp., § 51-14-120, enacted by Laws 1975, ch. 217, § 78; 2003, ch.
318, § 26.
                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, substituted "An original and a copy,
which may be a photocopy of the original after it was signed or a photocopy that is
conformed to the original" for "Duplicate originals" at the beginning of Subsection A;
substituted "the original and copy" for "each of the duplicate originals" in Paragraph
A(1); substituted "the original" for "one of the duplicate originals" in Paragraph A(2);
substituted "copy" for "other duplicate original" in Paragraph A(3); substituted "copy" for
"duplicate original" following "together with the" in Subsection B; and deleted
"corporation" preceding "commission" throughout the section.

53-8-79. Revocation of certificate of authority.

    A. The certificate of authority of a foreign corporation to conduct affairs in New
Mexico may be revoked by the commission [secretary of state] upon the conditions
prescribed in this section when:

         (1) the corporation has failed to file its annual report within the time required
by the Nonprofit Corporation Act or has failed to pay any fees or penalties prescribed by
that act when they have become due and payable;

         (2) the corporation has failed to appoint and maintain a registered agent in
New Mexico as required by the Nonprofit Corporation Act;

         (3) the corporation has failed, after change of its registered agent, to file in the
office of the commission [secretary of state] a statement of such change as required by
the Nonprofit Corporation Act;

         (4) the corporation has failed to file in the office of the commission [secretary
of state] any amendment to its articles of incorporation or any articles of merger within
the time prescribed by the Nonprofit Corporation Act;

         (5) the certificate of authority of the corporation was procured through fraud
practiced upon the state;
         (6) the corporation has continued to exceed or abuse the authority conferred
upon it by the Nonprofit Corporation Act; or

         (7) a misrepresentation has been made of any material matter in an
application, report, affidavit or other document submitted by the corporation pursuant to
the Nonprofit Corporation Act.

    B. A certificate of authority of a foreign corporation shall not be revoked by the
commission [secretary of state] unless:

         (1) the commission [secretary of state] has given the corporation not less than
sixty days' notice thereof by mail addressed to the corporation's mailing address shown
in the most recent annual report filed with the commission [secretary of state]; and

         (2) the corporation fails prior to revocation to file an annual report, or pay fees
or penalties, or file the required statement of change of registered agent, or file articles
of amendment or articles of merger, or correct such misrepresentation pursuant to the
Nonprofit Corporation Act.

History: 1953 Comp., § 51-14-121, enacted by Laws 1975, ch. 217, § 79; 1977, ch.
178, § 11; 2003, ch. 318, § 27.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Cross references. -- For appeal from secretary of state, see 53-8-91 NMSA 1978.

The 2003 amendment, effective July 1, 2003, deleted "or" at the end of Paragraphs
A(1) to (5); in Subsection B, substituted "A" for "No" at the beginning, inserted "not"
following "foreign corporation shall"; substituted "the corporation's mailing address
shown in the most recent" for "its registered office in New Mexico and either to its
principal office in the state or country under the laws of which it is incorporated or the
principal office of the corporation as each address is shown in the last" following "mail
addressed to" in Paragraph B(1); and deleted "corporation" preceding "commission"
throughout the section.
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §
189.

19 C.J.S. Corporations § 919.

53-8-80. Issuance of certificate of revocation.

    A. Upon revoking a certificate of authority, the commission [secretary of state] shall:

         (1) issue a certificate of revocation in duplicate;

         (2) file one of the certificates in its office; and

         (3) mail to the corporation at the corporation's mailing address as shown in
the most recent annual report filed with the commission [secretary of state], a notice of
the revocation accompanied by one of the certificates.

    B. Upon the issuance of a certificate of revocation, the authority of the corporation
to conduct affairs in New Mexico ceases.

History: 1953 Comp., § 51-14-122, enacted by Laws 1975, ch. 217, § 80; 1977, ch.
178, § 12; 2003, ch. 318, § 28.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, deleted "corporation" preceding
"commission" in Subsection A; substituted "duplicate" for "triplicate" in Paragraph A(1);
substituted "the corporation's mailing address shown in the most recent" for "its
registered office in New Mexico, and either to its principal office in the state or country
under the laws of which it is incorporated or the principal office of the corporation at the
address is shown in the last" in Paragraph A(3).

53-8-81. Conducting affairs without certificate of authority.
    A. No foreign corporation which is conducting affairs in New Mexico without a
certificate of authority shall be permitted to maintain any action, suit or proceeding in
any court of this state until the corporation shall have obtained a certificate of authority.
Nor shall any action, suit or proceeding be maintained in any court of New Mexico by
any successor or assignee of the corporation on any right, claim or demand arising out
of the conduct of affairs by the corporation in this state, until a certificate of authority has
been obtained by the corporation or by a corporation which has acquired all, or
substantially all, of its assets.

    B. The failure of a foreign corporation to obtain a certificate of authority to conduct
affairs in New Mexico shall not impair the validity of any contract or act of the
corporation, and shall not prevent the corporation from defending any action, suit or
proceeding in any district court of this state.

    C. A foreign corporation which conducts affairs in New Mexico without a certificate
of authority shall be liable to this state, for the years or parts thereof during which it
conducted affairs in this state without a certificate of authority, in an amount equal to all
fees which would have been imposed by the Nonprofit Corporation Act upon the
corporation had it duly applied for and received a certificate of authority to conduct
affairs in this state as required by that act and thereafter filed all reports required by that
act, plus all penalties imposed by that act for failure to pay such fees. The attorney
general shall bring proceedings to recover all amounts due New Mexico under the
provisions of this section.

History: 1953 Comp., § 51-14-123, enacted by Laws 1975, ch. 217, § 81.

                                               ANNOTATIONS

Cross references. -- For activities not constituting conducting affairs in state, see 53-
8-64 NMSA 1978.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §
240.

19 C.J.S. Corporations §§ 901, 919.

53-8-82. Annual report.

    A. Each domestic corporation and each foreign corporation authorized to conduct
affairs in New Mexico shall file, within the time prescribed by the Nonprofit Corporation
Act, on forms prescribed and furnished by the secretary of state to the corporation not
less than thirty days prior to the date such report is due, an annual report setting forth:

         (1) the name of the corporation and the state or country under the laws of
which it is incorporated;
         (2) the address of the registered office of the corporation in New Mexico and
the name of its registered agent in New Mexico at such address and, in the case of a
foreign corporation, the address of its registered office in the state or country under the
laws of which it is incorporated and the address of the principal office of the corporation
if different from the address of the registered office;

         (3) a brief statement of the character of the affairs that the corporation is
actually conducting or, in the case of a foreign corporation, that the corporation is
actually conducting in New Mexico; and

         (4) the names and respective addresses of every director and every officer of
the corporation.

    B. The report shall be signed and sworn to by any two of the corporation's directors
or officers. If the corporation is in the hands of a receiver or trustee, the report shall be
executed on behalf of the corporation by the receiver or trustee. A copy of the report
shall be maintained at the corporation's principal place of business as contained in the
report and shall be made available to the general public for inspection during regular
business hours.

History: 1953 Comp., § 51-14-124, enacted by Laws 1975, ch. 217, § 82; 1977, ch.
178, § 13; 1979, ch. 180, § 1; 1989, ch. 294, § 3; 2015, ch. 66, § 6.

                                               ANNOTATIONS

The 2015 amendment, effective July 1, 2015, required the secretary of state's office to
prescribe and furnish forms for corporations to file their annual report; in the introductory
sentence of Subsection A, after "furnished by the", deleted "commission" and added
"secretary of state"; in Paragraph (2) of Subsection A, after "registered agent in",
deleted "this state" and added "New Mexico"; in Paragraph (3) of Subsection A, after
"affairs", deleted "which" and added "that", and after "foreign corporation", deleted
"which" and added "that"; in Paragraph (4) of Subsection A, after "addresses of",
deleted "directors and officers" and added "every director and every officer"; and in
Subsection B, after "any two of", deleted "its" and added "corporation's".

The 1989 amendment, effective January 1, 1990, deleted former Subsection A(5),
relating to a statement required if fifty percent or more of the corporation's total annual
income is from state and federal sources; in Subsection B, substituted "any two of its
directors or officers" for "the president and secretary of the board of directors or, if there
are no officers, by the directors" in the first sentence; and deleted former Subsection C,
which defined the phrase "state or federal funds" as used in this section.

53-8-83. Filing of annual report; initial report; supplemental report;
extension of time.
    A. The annual report of a domestic or foreign corporation shall be delivered to the
secretary of state on or before the fifteenth day of the fifth month following the end of its
taxable year, except that the first annual report of a domestic or foreign corporation shall
be filed within thirty days after the date on which its certificate of incorporation or its
certificate of authority was issued by the secretary.

    B. A supplemental report shall be filed with the secretary of state within thirty days
if, after the filing of the annual report required under the Nonprofit Corporation Act, a
change is made in:

         (1) the name of the corporation;

         (2) the mailing address, street address or the geographical location of the
corporation's registered office in New Mexico and the name of the agent upon whom
process against the corporation may be served;

         (3) the name or address of any of the directors or officers of the corporation or
the date when the term of office of each expires, in which case the names, addresses
and dates of term expiration of every director and officer shall be reported; or

         (4) the corporation's principal place of business within or without New Mexico.

    C. Proof to the satisfaction of the secretary of state that, prior to the due date of any
report required by Subsection A or B of this section, the report was deposited in the
United States mail in a sealed envelope, properly addressed, with postage prepaid,
shall be deemed compliance with the requirements of this section. If the secretary finds
that the report conforms to the requirements of the Nonprofit Corporation Act, the
secretary shall file the same. If the secretary finds that it does not so conform, the
secretary shall promptly return the report to the corporation for any necessary
corrections, in which event the penalties prescribed for failure to file the report within the
time provided shall not apply, if the report is corrected to conform to the requirements of
the Nonprofit Corporation Act and returned to the secretary within thirty days after the
date on which it was mailed to the corporation by the secretary.

    D. Upon application by a corporation and for good cause shown, the secretary of
state may extend, for no more than a total of twelve months, the date on which a return
required by the provisions of the Nonprofit Corporation Act must be filed or the date on
which the payment of any fee is required, but no extension shall prevent the accrual of
interest as otherwise provided by law. The secretary shall, when an extension of time
has been granted a nonprofit corporation under the federal Internal Revenue Code of
1986 for the time in which to file a return, grant the corporation the same extension of
time to file the required return and to pay the required fees if a copy of the approved
federal extension of time is provided to the secretary for filing prior to the filing of the
corporation's report. An extension shall not prevent the accrual of interest as otherwise
provided by law.
    E. Nothing in this section prevents the collection of a fee or penalty due upon the
failure of any corporation to submit the required report.

    F. No annual or supplemental report required to be filed pursuant to the provisions
of this section shall be deemed to have been filed if the fees accompanying the report
have been paid by check and the check is dishonored upon presentation.

History: 1953 Comp., § 51-14-125, enacted by Laws 1975, ch. 217, § 83; 1979, ch.
180, § 2; 1989, ch. 294, § 4; 2001, ch. 200, § 39; 2015, ch. 66, § 7.

                                               ANNOTATIONS

Cross references. -- For the United States Internal Revenue Code of 1986, see 26
U.S.C. § 1 et seq.

The 2015 amendment, effective July 1, 2015, required corporations to file their annual
report with the secretary of state; in Subsection A, after "delivered to the", deleted
"commission" and added "secretary of state", and after "issued by the", deleted
"commission" and added "secretary"; in the introductory sentence of Subsection B, after
"filed with the", deleted "commission" and added "secretary of state"; in Paragraph (2) of
Subsection B, after "registered office in", deleted "this state" and added "New Mexico";
in Paragraph (3) of Subsection B, after "expires,", added "in which case the names,
addresses and dates of term expiration of every director and officer shall be reported";
in Paragraph (4) of Subsection B, after "without", deleted "the state" and added "New
Mexico"; in Subsection C, after "satisfaction of the", deleted "commission" and added
"secretary of state", after "If the", deleted "commission" and added "secretary of state",
after "Corporation Act", deleted "it" and added "the secretary", after "If the", deleted
"commission" and added "secretary", after "conform,", deleted "it" and added "the
secretary", after "returned to the", deleted "commission" and added "secretary", and
after "thirty days", deleted "from" and added "after"; in Subsection D, after "good cause
shown, the", deleted "commission" and added "secretary of state", after "The", deleted
"commission" and added "secretary", after "corporation under the", deleted "United
States" and added "federal", and after "extension of time is", deleted "attached to the"
and added "provided to the secretary for filing prior to the filing of the"; and in
Subsection F, after "required to be filed", deleted "under" and added "pursuant to the
provisions of".

The 2001 amendment, effective July 1, 2001, in Subsection A, deleted "corporation"
preceding "commission" in two places; substituted "the corporation's principal place" for
"the character of its business and its principal place"; substituted "by a corporation" for
"by the nonprofit corporation" at the beginning of Subsection D; and substituted "of a fee
or penalty due" for "any fee, penalty or interest due" in Subsection E.

The 1989 amendment, effective January 1, 1990, in Subsection A, substituted "fifth
month" for "third month" near the beginning and, in Subsection B(2), deleted "the
description of" following "street address or" near the beginning.
53-8-84. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1989, ch. 294, § 5 repealed 53-8-84 NMSA 1978, as enacted by
Laws 1975, ch. 217, § 84, relating to public agency, connected corporations, special
reports, and audits, effective January 1, 1990.

53-8-85. Fees for filing documents and issuing certificates.

    The secretary of state shall charge and collect for:

    A. filing articles of incorporation and issuing a certificate of incorporation, twenty-five
dollars ($25.00);

    B. filing articles of amendment and issuing a certificate of amendment, twenty
dollars ($20.00);

    C. filing restated articles of incorporation and issuing a restated certificate of
incorporation, twenty dollars ($20.00);

    D. filing articles of merger or consolidation and issuing a certificate of merger or
consolidation, twenty dollars ($20.00);

    E. filing a statement of change of address of registered office or change of
registered agent, or both, ten dollars ($10.00);

    F. filing an agent's statement of change of address of registered agent, ten dollars
($10.00);

    G. filing articles of dissolution, ten dollars ($10.00);

    H. filing an application of a foreign corporation for a certificate of authority to
conduct affairs in New Mexico and issuing a certificate of authority, twenty-five dollars
($25.00);

    I. filing an application of a foreign corporation for an amended certificate of
authority to conduct affairs in New Mexico and issuing an amended certificate of
authority, twenty dollars ($20.00);

    J. filing an application to reserve a corporation name or filing a notice to transfer of
a reserved corporate name, ten dollars ($10.00);

    K. filing a copy of articles of merger of a foreign corporation holding a certificate of
authority to conduct affairs in New Mexico, twenty-five dollars ($25.00);
    L. filing an application for withdrawal of a foreign corporation and issuing a
certificate of withdrawal, ten dollars ($10.00);

    M. filing any other statement or report, including an annual report, of a domestic or
foreign corporation, ten dollars ($10.00);

    N. issuing a certificate of good standing and compliance, ten dollars ($10.00); and

    O. issuing a letter or reinstatement of a domestic or foreign corporation, twenty-five
dollars ($25.00).

History: 1953 Comp., § 51-14-127, enacted by Laws 1975, ch. 217, § 85; 1977, ch.
178, § 14; 1983, ch. 304, § 17; 1988, ch. 93, § 2; 1993, ch. 311, § 8; 2003, ch. 318, §
29; 2015, ch. 66, § 8.

                                               ANNOTATIONS

The 2015 amendment, effective July 1, 2015, authorized the secretary of state to
charge and collect fees for the filing of corporate documents; in the introductory
sentence of the section, deleted "pubic regulation commission" and added "secretary of
state"; in Subsection F, after "registered agent", deleted "for each affected corporation";
and in Subsection O, after "corporation", deleted "a fee of".

The 2003 amendment, effective July 1, 2003, substituted "public regulation" for
"corporation" in the introductory paragraph; inserted present Subsection F and
redesignated former Subsections F to N as Subsections G to O.

The 1993 amendment, effective July 1, 1993, substituted "twenty-five dollars ($25.00)"
for "ten dollars ($10.00)" in Subsections A and G; substituted "twenty dollars ($20.00)"
for "five dollars ($5.00)" in Subsections B, C, and D; substituted "ten dollars ($10.00)"
for "one dollar ($1.00)" in Subsection E; substituted "ten dollars ($10.00)" for "five
dollars ($5.00)" in Subsections F, I, and K; substituted "twenty dollars ($20.00)" for "five
dollars ($5.00)" in Subsection H; substituted "twenty-five ($25.00)" for "five dollars
($5.00)" in Subsection J; substituted "ten dollars ($10.00)" for "one dollar ($1.00)" in
Subsection L; substituted "ten dollars ($10.00); and" for "two dollars ($2.00)" in
Subsection M; and added Subsection N.

The 1988 amendment, effective May 18, 1988, deleted Subsection N which read
"reviewing documents and reports to be delivered to the corporation commission, and
indicating approval thereof before delivery to the corporation commission, fifty dollars
($50.00)."

The 1983 amendment, effective June 17, 1983, substituted present Subsection I for
former Subsection I, which read: "filing a copy of an amendment to the articles of
incorporation of a foreign corporation holding a certificate of authority to conduct affairs
in New Mexico, five dollars ($5.00)" and added Subsection N.
53-8-86. Recordkeeping.

    The commission [secretary of state] shall provide, pursuant to the provisions of the
Public Records Act [Chapter 14, Article 3 NMSA 1978], for the retention, storage and
destruction of annual reports filed with the commission [secretary of state].

History: 1953 Comp., § 51-14-127.1, enacted by Laws 1977, ch. 178, § 15.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-8-86.1. Fees of secretary of state; dishonored check; civil
penalty; suspension of filing.

    A. Any person or corporation that pays a fee by check to the secretary of state,
which check is dishonored upon presentation, is liable to the secretary for such fees
together with a civil penalty of twenty dollars ($20.00) for each such check.

    B. The secretary of state shall not accept for filing any document, instrument or
paper from a person or corporation that is liable to the secretary for a fee, tax, penalty or
interest until that liability is discharged.

History: 1978 Comp., § 53-8-86.1, enacted by Laws 1979, ch. 180, § 3; 1993, ch. 311,
§ 9; 2015, ch. 66, § 9.

                                               ANNOTATIONS

The 2015 amendment, effective July 1, 2015, authorized the secretary of state to
suspend filing privileges for any person or corporation that is liable to the secretary of
state for a fee, tax or penalty until the liability is discharged; in the catchline, deleted
"state corporation commission" and added "secretary of state" and added "suspension
of filing"; designated the existing language in the section as Subsection A; in Subsection
A, after "corporation", deleted "who" and added "that", after "check to the", deleted
"state corporation commission and" and added "secretary of state", and after "liable to
the", deleted "commission" and added "secretary"; and added Subsection B.
The 1993 amendment, effective July 1, 1993, substituted "twenty dollars ($20.00)" for
"ten dollars ($10.00)".

53-8-87. Miscellaneous charges.

    The secretary of state shall charge and collect for furnishing a copy of any
document, instrument or paper relating to a corporation, five dollars ($5.00). In addition,
if certifying the document, ten dollars ($10.00) shall be paid for the certificate and
affixing the seal thereto.

History: 1953 Comp., § 51-14-128, enacted by Laws 1975, ch. 217, § 86; 1977, ch.
178, § 16; 1993, ch. 311, § 10; 2015, ch. 66, § 10.

                                               ANNOTATIONS

The 2015 amendment, effective July 1, 2015, authorized the secretary of state to
charge and collect certain fees to corporations; changed "corporation commission" to
"secretary of state", and after "corporation", deleted "one dollar ($1.00) per page, but in
no case less than".

The 1993 amendment, effective July 1, 1993, substituted "one dollar ($1.00)" for
"seventy-five cents ($.75)", inserted "but in no case less than five dollars ($5.00)", and
substituted "ten dollars ($10.00)" for "one dollar ($1.00)".

53-8-88. Penalty imposed upon corporation.

    Each corporation, domestic or foreign, that fails or refuses to file any report for any
year within the time prescribed by the Nonprofit Corporation Act shall be subject to a
penalty of ten dollars ($10.00) to be assessed by the corporation commission [secretary
of state].

History: 1953 Comp., § 51-14-129, enacted by Laws 1975, ch. 217, § 87; 1983, ch.
304, § 18.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.
The 1983 amendment, effective June 17, 1983, substituted "any report" for "its annual
report" and substituted "ten dollars ($10.00)" for "fifty dollars ($50.00)."

53-8-88.1. Dormant corporations; statement in lieu of annual report.

    A. Whenever any corporation is no longer actively conducting affairs in this state or
carrying out the purposes of its incorporation, any two of its directors or officers may
unite in signing a statement to that effect; the statement shall be filed in lieu of the
required annual report. Upon the filing of this statement and the payment of all fees,
penalties and interest, the commission [secretary of state] shall be authorized to strike
the name of the corporation from the list of active corporations in this state; but this
action shall not be construed in any sense as a formal dissolution of the corporation nor
shall the corporation be relieved thereby from any outstanding obligation. Any
corporation in this class may be fully revived by the resumption of actively conducting
affairs and the filing of an annual report by the provision of this section.

    B. Any corporation in this class may continue in this class by filing a statement of
renewal every five years to the effect that it is not actively conducting affairs in this state
nor carrying out the purposes of its incorporation. Sixty days after written notice of
failure to file a statement of renewal has been mailed to its registered agent and also to
the principal office of the corporation as shown in the last report filed with the
commission [secretary of state], the corporation shall have its certificate of incorporation
or authority cancelled by the commission [secretary of state] without further proceedings
unless the statement of renewal is filed and all fees are paid within that sixty-day period.

History: 1978 Comp., § 53-8-88.1, enacted by Laws 1983, ch. 304, § 19.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-8-89. Reports; affirmation; penalty.

    A. All reports required to be filed with the commission [secretary of state] pursuant
to the Nonprofit Corporation Act shall contain the following affirmation: "Under penalties
of perjury, I declare and affirm that I have examined this report, including the
accompanying schedules and statements, and that all statements contained therein are
true and correct".

    B. Any person who makes and subscribes any report required under the Nonprofit
Corporation Act that contains a false statement, which statement is known to be false by
such person, is guilty of perjury and upon conviction shall be punished as provided for in
the perjury statutes of this state.

History: 1978 Comp., § 53-8-89, enacted by Laws 1979, ch. 180, § 4.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1846,
1859 to 1864.

53-8-90. Authority to make refunds.

    In response to a written claim for a refund for overpayment of a fee collected by the
commission [secretary of state] pursuant to the Nonprofit Corporation Act, the
commission [secretary of state] or its delegate may authorize the refund to a
corporation, a foreign corporation, a nonprofit corporation or a person of any amount
determined by the commission [secretary of state] or its delegate to have been
erroneously paid to the commission [secretary of state].

History: 1953 Comp., § 51-14-130.1, enacted by Laws 1977, ch. 178, § 17.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-8-91. Appeal from commission [secretary of state].

    A. If the commission [secretary of state] fails to approve any articles of
incorporation, amendment, merger, consolidation or dissolution, or any other document
required by the Nonprofit Corporation Act to be approved by the commission [secretary
of state] before the same is filed in its office, the commission [secretary of state] shall,
within fifteen working days after the delivery thereof, give written notice of its
disapproval to the person or corporation, domestic or foreign, delivering the same,
specifying the reasons therefor. The person or corporation may appeal the disapproval
to the district court pursuant to the provisions of Section 39-3-1.1 NMSA 1978.

    B. If the commission [secretary of state] revokes a certificate of authority to conduct
affairs in New Mexico of any foreign corporation or a certificate of incorporation of a
domestic corporation, pursuant to the provisions of the Nonprofit Corporation Act, the
foreign or domestic corporation may appeal to the district court pursuant to the
provisions of Section 39-3-1.1 NMSA 1978.

History: 1953 Comp., § 51-14-131, enacted by Laws 1975, ch. 217, § 89; 1983, ch.
304, § 20; 1998, ch. 55, § 48; 1999, ch. 265, § 51.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Cross references. -- For procedures governing administrative appeals to the district
court, see Rule 1-074 NMRA.

The 1999 amendment, effective July 1, 1999, deleted "corporation" preceding
"commission" throughout the section, and substituted "Section 39-3-1.1" for "Section 12-
8A-1" in the last sentence of Subsection A and in Subsection B.

The 1998 amendment, effective September 1, 1998, rewrote this section to the extent
that a detailed comparison is impracticable.
The 1983 amendment, effective June 17, 1983, substituted "fifteen working" for "ten"
near the middle of the first sentence of Subsection A.

53-8-92. Issuance of certificate of good standing and compliance.

    The commission [secretary of state] may issue a certificate of good standing and
compliance if the corporation requesting the certificate has paid all fees due at the time
of the request.

History: 1953 Comp., § 51-14-131.1, enacted by Laws 1977, ch. 178, § 18.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-8-93. Certificates and certified copies to be received in evidence.

    All certificates issued by the corporation commission [secretary of state] in
accordance with the provisions of the Nonprofit Corporation Act, and all copies of
documents filed in the commission's [secretary of state's] office in accordance with the
provisions of the Nonprofit Corporation Act, when certified by the commission [secretary
of state], shall be taken and received in all courts, public offices and official bodies as
prima facie evidence of the facts therein stated. A certificate by the corporation
commission [secretary of state] under the great seal of New Mexico, as to the existence
or nonexistence of the facts relating to corporations which would not appear from a
certified copy of any of the foregoing documents or certificates, shall be taken and
received in all courts, public offices and official bodies as prima facie evidence of the
existence or nonexistence of the facts therein stated.

History: 1953 Comp., § 51-14-132, enacted by Laws 1975, ch. 217, § 90.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-8-94. Forms to be furnished by corporation commission
[secretary of state].

    Forms for all documents to be filed in the office of the corporation commission
[secretary of state] may be furnished by the commission [secretary of state] on request
therefor, but the use thereof, unless otherwise specifically prescribed in the Nonprofit
Corporation Act, shall not be mandatory.

History: 1953 Comp., § 51-14-133, enacted by Laws 1975, ch. 217, § 91; 1977, ch.
178, § 19.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-8-95. Greater voting requirements.

    Whenever, with respect to any action to be taken by the members or directors of a
corporation, the articles of incorporation or bylaws require the vote or concurrence of a
greater proportion of the directors or members or any class of members than required
by the Nonprofit Corporation Act, the provisions of the articles of incorporation or bylaws
shall control.

History: 1953 Comp., § 51-14-134, enacted by Laws 1975, ch. 217, § 92.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 989 to
992; 18B Am. Jur. 2d Corporations § 1371.
53-8-96. Waiver of notice.

    Whenever any notice is required to be given to any member or director of a
corporation under the provisions of the Nonprofit Corporation Act or under the
provisions of the articles of incorporation or bylaws of the corporation, a waiver thereof
in writing signed by the person or persons entitled to the notice, whether before or after
the time stated therein, shall be equivalent to the giving of such notice.

History: 1953 Comp., § 51-14-135, enacted by Laws 1975, ch. 217, § 93.

                                               ANNOTATIONS

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations § 332.

18 C.J.S. Corporations § 367.

53-8-97. Action by members or directors without a meeting.

    A. Any action required by the Nonprofit Corporation Act to be taken at a meeting of
the members or directors of a corporation, or any action which may be taken at a
meeting of the members or directors, may be taken without a meeting if a consent in
writing, setting forth the action so taken, is signed by all of the members entitled to vote
with respect to the subject matter thereof, or all of the directors, as the case may be.

    B. The consent as provided for in Subsection A of this section shall have the same
force and effect as a unanimous vote and may be stated as such in any articles or
document filed with the corporation commission [secretary of state] under the Nonprofit
Corporation Act.

History: 1953 Comp., § 51-14-136, enacted by Laws 1975, ch. 217, § 94.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations § 332.
18 C.J.S. Corporations § 362.

53-8-98. Unauthorized assumption of corporate powers.

    All persons who assume to act as a corporation without authority so to do shall be
jointly and severally liable for all debts and liabilities incurred or arising as a result
thereof.

History: 1953 Comp., § 51-14-137, enacted by Laws 1975, ch. 217, § 95.

53-8-99. Effect of repeal of prior acts.

    The repeal of a prior act by the Nonprofit Corporation Act shall not affect any right
accrued or established, or any liability or penalty incurred, under the provisions of such
act, prior to the repeal thereof.

History: 1953 Comp., § 51-14-138, enacted by Laws 1975, ch. 217, § 97.

                                               ANNOTATIONS

Applicability to prior repeals. -- This section by its terms applies only to the repeal of
any prior act by the 1975 Nonprofit Corporation Act. The 1975 act did not repeal any
provision relating to survival of remedies against dissolved corporations. Quintana v.
Los Alamos Med. Ctr., Inc., 1994-NMCA-162, 119 N.M. 312, 889 P.2d 1234.

ARTICLE 9
Indian Pueblos

53-9-1. [Pueblo Indian communities; bodies corporate; powers.]

    The inhabitants within the state of New Mexico, known by the name of the Pueblo
Indians, and living in towns or villages built on lands granted to such Indians by the laws
of Spain and Mexico, and conceding to such inhabitants certain lands and privileges, to
be used for the common benefit, are severally hereby created and constituted bodies
politic and corporate, and shall be known in the law by the name of the Pueblo de . . . . .
. . . ., (naming it), and by that name they and their successors shall have perpetual
succession, sue and be sued, plead and be impleaded, bring and defend in any court of
law or equity, all such actions, pleas and matters whatsoever, proper to recover, protect,
reclaim, demand or assert the right of such inhabitants, or any individual thereof, to any
lands, tenements or hereditaments, possessed, occupied or claimed contrary to law, by
any person whatsoever, and to bring and defend all such actions, and to resist any
encroachment, claim or trespass made upon such lands, tenements or hereditaments,
belonging to said inhabitants, or to any individual.
History: Laws 1847, p. 35; C.L. 1865, ch. 66, § 1; C.L. 1884, § 1304; C.L. 1897, §
1875; Code 1915, § 2784; C.S. 1929, § 69-101; 1941 Comp., § 54-1601; 1953 Comp., §
51-17-1.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

History of title held by Pueblo Indians. -- The Pueblo Indians hold their lands by a
right superior to that of the United States. Their title dates back to grants made by the
government of Spain before the Mexican revolution, a title which was fully recognized
by the Mexican government, and protected by it in the Treaty of Guadalupe Hidalgo, by
which the country and the allegiance of its inhabitants were transferred to the United
States. United States v. Joseph, 94 U.S. (94 Otto) 614, 24 L. Ed. 295 (1876). But see
Mountain States Tel. & Tel. Co. v. Pueblo of Santa Ana, 472 U.S. 237, 105 S. Ct. 2587,
86 L. Ed. 2d 168 (1985), discussing the partial supersession of Joseph by the Pueblo
Lands Act of 1924.

The Pueblo Indians became citizens of the United States by virtue of the Treaty of
Guadalupe Hidalgo, which guaranteed their property rights equally with other citizens of
New Mexico. They are a body corporate and have complete title to their lands which the
courts protect the same as titles to other lands. United States v. Varela, 1874-NMSC-
004, 1 N.M. 593, aff'd sub nom., United States v. Joseph, 94 U.S. (94 Otto) 614, 24 L.
Ed. 295 (1876). But see Mountain States Tel. & Tel. Co. v. Pueblo of Santa Ana, 472
U.S. 237, 105 S. Ct. 2587, 86 L. Ed. 2d 168 (1985), discussing the partial supersession
of Joseph by the Pueblo Lands Act of 1924.

The Indian tribes are distinct political entities, with the right to self-government,
having exclusive authority within their territorial boundaries and are not subject to the
laws of the state in which they are located nor to federal laws except where federal laws
or the jurisdiction of courts is expressly conferred by federal legislation. Your Food
Stores, Inc. v. Village of Espanola, 1961-NMSC-041, 68 N.M. 327, 361 P.2d 950, cert.
denied, 368 U.S. 915, 82 S. Ct. 194, 7 L. Ed. 2d 131 (1961).

Validity of "Kearny Code" and acts of 1847. -- The system of laws known as the
"Kearny Code," and the acts of the general assembly of New Mexico of the December
session, 1847, were valid except so far as they attempted to confer political rights upon
the inhabitants, under the constitution of the United States, the same having been
established by competent authority by virtue of rights of war. Ward v. Broadwell, 1854-
NMSC-001, 1 N.M. 75.

Effect of this section. -- This section gave the Indian pueblos the status of bodies
politic and corporate and as such empowered them to sue in respect of their lands.
Garcia v. U.S., 43 F.2d 873 (10th Cir. 1930); Lane v. Pueblo of Santa Rosa, 249 U.S.
110, 39 S. Ct. 185, 63 L. Ed. 504 (1919).
This statute does not purport to vest any governmental powers, rights or duties in
the Pueblos of New Mexico which are dependent Indian communities, Indian tribes,
under the guardianship of the United States. Toledo v. Pueblo De Jemez, 119 F. Supp.
429 (D.N.M. 1954).

Lands of the pueblo are subject to congressional control although held in
communal fee-simple ownership by the Indians of each pueblo. United States v.
Sandoval, 231 U.S. 28, 34 S. Ct. 1, 58 L. Ed. 107 (1913).

Pueblo still legal entity in court. -- The existing wardship of the United States over
the Indians of the Pueblo of Santa Rosa, in Arizona, acquired as a part of the territory of
New Mexico by grant or concession, does not affect the pueblo as a legal entity in court.
Lane v. Pueblo of Santa Rosa, 249 U.S. 110, 39 S. Ct. 185, 63 L. Ed. 504 (1919).

State jurisdiction over Indians. -- Although congress did specifically act to give its
consent to the state to assume jurisdiction over the Indians within its boundaries, such
jurisdiction is prohibited until the state should amend its constitution or statute, removing
any legal impediment to such assumption of jurisdiction. New Mexico has not seen fit to
amend N.M. Const., art. XXI, § 2 and has not accepted jurisdiction over the Indians.
Your Food Stores, Inc. v. Village of Espanola, 1961-NMSC-041, 68 N.M. 327, 361 P.2d
950, cert. denied, 368 U.S. 915, 82 S. Ct. 194, 7 L. Ed. 2d 131 (1961).

Judicial jurisdiction over Indian tribe. -- The district court may exercise jurisdiction
over an Indian tribe when the tribe is engaged in activity off of the reservation as an
unincorporated association, registered and authorized to do business in this state and is
sued in that capacity for breach of a written contract to pay for the performance of
contractual obligations accomplished or intended to be accomplished in connection with
this off-reservation activity of the tribe. Padilla v. Pueblo of Acoma, 1988-NMSC-034,
107 N.M. 174, 754 P.2d 845, cert. denied, 490 U.S. 1028, 109 S. Ct. 1767, 104 L. Ed.
2d 202 (1989), overruled by Armijo v. Pueblo of Laguna, 2011-NMCA-006, 149 N.M.
234, 247 P.3d 1119; Antonio v. Inn of the Mt. Gods Resort & Casino, 2010-NMCA-077,
148 N.M. 858, 242 P.3d 425; Kiowa Tribe of Okla. v. Mfg. Techs., Inc., 523 U.S. 751
(1998).

Trespass on pueblo lands actionable. -- One on the lands of the pueblo, without the
consent of the inhabitants, may be ejected or punished civilly, by a suit for trespass,
according to the laws regulating such matters in New Mexico. U.S. v. Joseph, 94 U.S.
(94 Otto) 614, 24 L. Ed. 295 (1876). But see Mountain States Tel. & Tel. Co. v. Pueblo
of Santa Ana, 472 U.S. 237, 105 S. Ct. 2587, 86 L. Ed. 2d 168 (1985), discussing the
partial supersession of Joseph by the Pueblo Lands Act of 1924.

An Indian pueblo may acquire title by adverse possession. Garcia v. U.S., 43 F.2d
873 (10th Cir. 1930).

Pueblos have right to alienate their lands. -- Pueblo Indians in New Mexico were
citizens of Mexico and at the time of the ratification of the Treaty of Guadalupe Hidalgo
possessed all of the rights of any other citizen, including the right of alienation of their
lands. Territory v. Persons & Prop. Described in Delinquent Tax List, 1904-NMSC-008,
12 N.M. 139, 76 P. 307. See also U.S. v. Lucero, 1869-NMSC-003, 1 N.M. 422; U.S. v.
Santistevan, 1874-NMSC-003, 1 N.M. 583.

Pueblos have right to use limitation statutes. -- Indian pueblos were held entitled to
the benefits of the New Mexico statutes of limitation which may be pleaded by the
United States, as their guardian, in their behalf. Garcia v. U.S., 43 F.2d 873 (10th Cir.
1930).

Pueblo lands taxable. -- The lands of the Pueblo Indians in New Mexico are taxable.
Territory v. Persons & Prop. Described in Delinquent Tax List, 1904-NMSC-008, 12
N.M. 139, 76 P. 307.

Sales tax may not be levied. -- The statutory definition of "federal area" in 4 U.S.C. §
110(e) and the authorization of the imposition of sales tax by 4 U.S.C. § 105(a) was not
intended to give the states or localities permission to levy a sales tax upon Indian lands.
Your Food Stores, Inc. v. Village of Espanola, 1961-NMSC-041, 68 N.M. 327, 361 P.2d
950, cert. denied, 368 U.S. 915, 82 S. Ct. 194, 7 L. Ed. 2d 131 (1961).

State court jurisdiction over divorce action between Indians of different pueblos
proper where congress has remained silent upon the subject of divorce and it is not
asserted that Pueblo customs and laws provide a remedy. Tenorio v. Tenorio, 1940-
NMSC-002, 44 N.M. 89, 98 P.2d 838.

No state court jurisdiction where auto accident on pueblo. -- The district court of
Bernalillo county properly dismissed action by resident of Isleta Pueblo, New Mexico,
against another resident thereof, for damages for automobile collision which occurred
within an area embraced by Valencia county, New Mexico, for lack of jurisdiction, the
Pueblo Indians of New Mexico being under the jurisdiction of the United States. The
accident did not occur on land of the state of New Mexico and title to the land of the
Isleta Pueblo was in the Indian tribe and had never been extinguished. Valdez v.
Johnson, 1961-NMSC-089, 68 N.M. 476, 362 P.2d 1004.

Pueblo actions not under color of state law. -- The Pueblos do not derive their
governmental powers from the state of New Mexico nor from the United States and
consequently, there was no basis for holding that the conduct of the defendants (Pueblo
civil authorities) of which the plaintiffs (Protestant Pueblo Indians) complain (allegedly
subjecting plaintiffs to indignities, threats and reprisals because of their faith) was done
under color of state law, statute, ordinance, regulation, custom or usage. Toledo v.
Pueblo De Jemez, 119 F. Supp. 429 (D.N.M. 1954).

Law reviews. -- For article, "The Indian Tax Cases - A Territorial Analysis," see 9 N.M.
L. Rev. 221 (1979).
ARTICLE 10
Unincorporated Associations

53-10-1. [Purpose of organization; filing statement, articles of
association and rules and regulations with county clerk.]

    Whenever two or more persons shall desire to form an association for the promotion
of their mutual pleasure or recreation of any hunting, fishing, camping, golf, country
club, or association for a similar purpose, or an association not for the individual profit of
the members thereof, and without incorporating the same as a corporation, or
maintaining the title of its property in trust for the interest of its several members as they
may exist from time to time.[, the] The said persons or members desiring to form such
an association or club may file in the office of the county clerk of the county in which it
may maintain its headquarters and pursue its objects and purposes, a statement
containing the name of such association, its objects and purposes, the names and
residences of the persons forming such association, together with a copy of its articles
of association and any rules and/or regulations governing the transactions of its objects
and purposes and prescribing the terms by which its members may maintain or cease
their membership therein.

History: Laws 1937, ch. 186, § 1; 1941 Comp., § 52-101; 1953 Comp., § 51-18-1.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

To create an association under this section, filing statutory documents is
mandatory. -- The plain language of this section sets out that whenever two or more
persons wish to form an association for the limited purpose described therein without
incorporating or maintaining title to its property in trust, then those persons may do so
by filing statutory documents with the county clerk. For those intending to create an
association under this section, the filing of statutory documents is mandatory. Blue
Canyon Well Ass'n v. Jevne, 2018-NMCA-004.

Plaintiffs lacked the legal capacity to sue. -- Where parties to a well sharing and
easement agreement brought suit against defendant for past due water well expenses,
but failed to satisfy the requirements of this section by filing the statutory documents to
form an unincorporated association, plaintiffs were unavailing of the rights conferred by
this section, including the right to sue granted by 53-10-5 NMSA 1978, and therefore the
district court erred in entering judgment in favor of plaintiffs. Blue Canyon Well Ass'n v.
Jevne, 2018-NMCA-004.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 6 Am. Jur. 2d Associations and Clubs §
7.
Club as inn or hotel, 19 A.L.R. 517, 53 A.L.R. 988.

Club, definition, 80 A.L.R. 1296, 143 A.L.R. 1381.

Solicitation of persons to join organization or society, or to pay membership fees or
dues, validity, construction and application of statute or ordinance regarding, 167 A.L.R.
697.

Notice of meeting of voluntary association, 167 A.L.R. 1233.

Suspension or expulsion from professional association and the remedies therefor, 20
A.L.R.2d 531.

Liability of bailee for hire of automobile for loss of, or damage to, contents, 27 A.L.R.2d
796.

7 C.J.S. Associations § 3.

53-10-2. [Property holdings; effect of member's death on
termination of membership; member's interest not subject to
execution.]

    Any such club or association may hold and acquire real or personal property by
deed, lease or otherwise, in the name of such association by which it is known, and to
[may] acquire title to any property by purchase or otherwise for its objects and
purposes, which property shall be deemed in law to be held by the said club or
association for the use and benefit of the actual and active members thereof composing
said association from time to time,[;] and upon the decease of any member, or the
termination of any membership therein, the interest of any deceased member, or the
interest of any member whose membership is terminated, in the property real or
personal of such association shall cease and terminate, without right of succession to
the heirs, executors and administrators of such deceased member, or to the creditors or
trustee in bankruptcy or assignee of any member whose membership in said
association shall be terminated. The interest of any member in the real and personal
property of any such club or association shall not be subject to execution as and for his
debts or as his individual or special property.

History: Laws 1937, ch. 186, § 2; 1941 Comp., § 52-102; 1953 Comp., § 51-18-2.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Cross references. -- For rules governing garnishment and writs of execution in the
district, magistrate, and metropolitan courts, see Rules 1-065.1, 2-801, and 3-801
NMRA, respectively.

For form for claim of exemptions on executions, see Rule 4-803 NMRA.

For form for order on claim of exemption and order to pay in execution proceedings, see
Rule 4-804 NMRA.

For form for application for writ of garnishment and affidavit, see Rule 4-805 NMRA.

For form for notice of right to claim exemptions from execution, see Rule 4-808A NMRA.

For form for claim of exemption from garnishment, see Rule 4-809 NMRA.

Issuance of tax deed to members of disbanded association. -- Where defendants
were the only remaining members of a voluntary association in good standing when it
was disbanded, tax deed to land previously owned by the association, issued to them
after its sale to the state for delinquent taxes, only effected a redemption of the land.
Flanagan v. Benvie, 1954-NMSC-074, 58 N.M. 525, 273 P.2d 381.

Rights of former members of disbanded association. -- Where rifle club ceased to
exist because there were no funds and only two members, the land owned by the
association being sold to state for delinquent taxes, plaintiffs who did not belong to the
association when land was acquired nor when the association disbanded had no right or
interest in the land, nor did those who belonged to a subsequently organized club by the
same name. Flanagan v. Benvie, 1954-NMSC-074, 58 N.M. 525, 273 P.2d 381.

Property in name of local chapters. -- The local chapters of the Future Farmers of
America are legally entitled to acquire and to hold both real or personal property in the
name of the local chapter, and to convey or dispose of such property as is in
accordance with such organization's bylaws or rules. 1961 Op. Att'y Gen. No. 61-96.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 6 Am. Jur. 2d Associations and Clubs §
13.

Status and rights of one renting room in club, 32 A.L.R. 1016.

Golf club, resignation from, 99 A.L.R. 1441.

Power and capacity of unincorporated association, lodge, society, or club to convey,
transfer or encumber association property, 15 A.L.R.2d 1451.

7 C.J.S. Associations §§ 35, 36.

53-10-3. [Mortgage or sale of property; method of conveyance.]
    The property, real, personal or leasehold interest therein of any such club or
association may be mortgaged or sold at such time and upon such terms as the then
members of such club or association may determine by vote as its rules or by-laws
[bylaws] may prescribe; and any deed signed by the president or secretary, or such
other officer or officers designated by resolution of the members of any such club or
association adopted at any regular or special meeting called for that purpose, shall be
deemed sufficient in law to convey the fee simple title, or any title, to any property held
or possessed by any such club or association free and clear of any interest, claim or title
of any of the individual members thereof, their heirs, executors and administrators, as
tenants in common or otherwise.

History: Laws 1937, ch. 186, § 3; 1941 Comp., § 52-103; 1953 Comp., § 51-18-3.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Compiler's notes. -- For property in name of local chapters, see notes to 53-10-2
NMSA 1978.

53-10-4. [Rules and regulations; subjects; effect.]

    The members of any such association or club formed under this act [53-10-1 to 53-
10-8 NMSA 1978] may prescribe from time to time, rules and regulations for the
government of said club or association as the majority of its members from time to time
may determine, may prescribe what fees and dues shall be payable, and the time when
the same shall be paid as a condition for membership, or the continuance thereof by
any member, and may provide in such rules that upon default in payment of such dues,
or the violation of any of its other rules or regulations, a member's membership may be
determined; which rules and regulations shall be deemed a contract between the
member affected thereby and the balance of the members composing such association.

History: Laws 1937, ch. 186, § 4; 1941 Comp., § 52-104; 1953 Comp., § 51-18-4.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- Suspension or expulsion from social
club or similar society and the remedies therefor, 20 A.L.R.2d 344.

Suspension or expulsion from professional association and the remedies therefor, 20
A.L.R.2d 531.
53-10-5. [Right to sue and be sued; actions against members.]

    Such club or association may sue or be sued in its name without the individual
members thereof being made parties to such suit, and may sue any member as a
defendant in any matter arising out of his membership in said club or association or the
termination thereof, and may recover judgment if necessary, for any dues or obligations
due and owing by such member to the club or association, whether such member has
ceased to become [be] such or not.

History: Laws 1937, ch. 186, § 5; 1941 Comp., § 52-105; 1953 Comp., § 51-18-5.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Individual liability of member. -- Driver of truck was individually liable for injuries to
woman struck by falling beam as truck was negligently moved in closing of refreshment
stand operated exclusively by the ladies auxiliary. Weese v. Stoddard, 1956-NMSC-
117, 63 N.M. 20, 312 P.2d 545.

The members of an unincorporated association are liable for the torts committed by the
association's agent acting within the scope of his employment. Weese v. Stoddard,
1956-NMSC-117, 63 N.M. 20, 312 P.2d 545.

Plaintiffs lacked the legal capacity to sue. -- Where parties to a well sharing and
easement agreement brought suit against defendant for past due water well expenses,
but failed to satisfy the requirements of 53-10-1 NMSA 1978 by filing the statutory
documents to form an unincorporated association, plaintiffs were unavailing of the rights
conferred by 53-10-1 NMSA 1978, including the right to sue granted by this section, and
therefore the district court erred in entering judgment in favor of plaintiffs. Blue Canyon
Well Ass'n v. Jevne, 2018-NMCA-004.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 59 Am. Jur. 2d Parties §§ 19 to 23, 27,
30, 31.

Liability to one struck by golf ball, 53 A.L.R.4th 282.

Association of persons as proper representative of class under Rule 23 of Federal
Rules of Civil Procedure governing maintenance of class actions, 63 A.L.R. Fed. 361.

53-10-6. Suits against or by unincorporated associations; recovery
of judgments.

    A. An unincorporated association may sue or be sued in its common name for the
purpose of enforcing for or against it any substantive right. Suit may be brought against
an unincorporated association by any individual member of the association, and the
unincorporated association may sue its individual associates.

    B. Any money judgment obtained against an unincorporated association shall bind
only the joint or common property of the association.

    C. In any action against an unincorporated association process may be served by
delivering a copy of the summons and of the complaint or other pleading to an officer of
the association or other head officer or agent in charge of its principal office in this state
or by serving process in the manner now provided for service of process against
corporations.

History: 1953 Comp., § 51-18-5.1, enacted by Laws 1959, ch. 68, § 1.

                                               ANNOTATIONS

Class action allegations not necessary. -- This section provides that unincorporated
associations may be sued in their own name and the union defendants are sued as
unincorporated labor organizations. Being sued in their own name, no allegations of a
class action were necessary to make them defendants in this action. Gonzales v. Oil,
Chem. & Atomic Workers Int'l Union, 1966-NMSC-211, 77 N.M. 61, 419 P.2d 257.

No substantive right against association. -- Near the close of rodeo sponsored by
an American Legion post, woman was injured by beam falling from truck when it was
being moved by special servant at request of member of auxiliary. The driver of the
truck was a special servant at the time of the accident, controlled by and acting under
the direction of the auxiliary, an unincorporated association. He was assigned
specifically by his post to do only the heavy work; other tasks were to be performed by
the auxiliary. The stand was the exclusive project of the ladies who received all of the
benefits. Legion post was not liable for the accident. Weese v. Stoddard, 1956-NMSC-
117, 63 N.M. 20, 312 P.2d 545.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 6 Am. Jur. 2d Associations and Clubs §
52.

Recovery by member from unincorporated association for injuries inflicted by tort of
fellow member, 14 A.L.R.2d 473.

Liability to one struck by golf ball, 53 A.L.R.4th 282.

Association of persons as proper representative of class under Rule 23 of Federal
Rules of Civil Procedure governing maintenance of class actions, 63 A.L.R. Fed. 361.

7 C.J.S. Associations § 16.
53-10-7. [Maximum term of existence; dissolution; distribution of
proceeds of property.]

    Any association or club formed under the provisions of this act [53-10-1 to 53-10-8
NMSA 1978] may exist for such period of time not exceeding twenty years as may be
fixed in the statement required to be filed by Section 1 [53-10-1 NMSA 1978] of this act;
and upon the dissolution or winding up of any such club or association prior to the
termination of its existence or otherwise, the property real and personal then possessed
by said club, or any real estate the title to which is then standing in its name shall in law
be deemed to be held by the said club or association for the use and benefit of the
members at the time of such dissolution, and upon a sale or disposition, the proceeds
shall be distributed among the members of such club or association at the time of such
dissolution.

History: Laws 1937, ch. 186, § 6; 1941 Comp., § 52-106; 1953 Comp., § 51-18-6.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 6 Am. Jur. 2d Associations and Clubs
§§ 61, 62.

Right to assets of voluntarily dissolved lodge or club, 70 A.L.R.4th 897.

7 C.J.S. Associations § 9.

53-10-8. [Construction of act.]

    This act [53-10-1 to 53-10-8 NMSA 1978] shall not be construed to repeal or modify
any of the present laws of this state relative to corporations formed or [for] any purpose,
but the same shall be construed as supplementary thereto.

History: Laws 1937, ch. 186, § 7; 1941 Comp., § 52-107; 1953 Comp., § 51-18-7.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

ARTICLE 11
Business Corporations; Substantive Provisions
53-11-1. Short title.

    Chapter 53, Articles 11 through 18 NMSA 1978 may be cited as the "Business
Corporation Act".

History: 1953 Comp., § 51-24-1, enacted by Laws 1967, ch. 81, § 1; 1977, ch. 103, § 9;
1998, ch. 108, § 27; 2001, ch. 200, § 40.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 1 of the ABA Model Business
Corporation Act.

Cross references. -- For Professional Corporation Act, see 53-6-1 NMSA 1978 et seq.

For Uniform Unclaimed Property Act, see Chapter 7, Article 8A NMSA 1978.

The 2001 amendment, effective July 1, 2001, substituted "Chapter 53, Articles 11
through 18 NMSA 1978" for "Sections 53-11-1 through 53-18-12 NMSA 1978 is the
general corporation law of New Mexico and".

The 1998 amendment, effective January 1, 1999, substituted "53-11-1 through 53-18-
12 NMSA 1978" for "51-31-11 NMSA 1953" near the beginning of the section.

Liability of shareholder. -- Nothing in Article 15 of the Business Corporation Act or in
the Professional Corporation Act (53-6-1 to 53-6-14 NMSA 1978) permits rendering an
individual judgment against a shareholder of a professional corporation based solely
upon a failure of the corporation to properly value the stock of the corporation. For that
reason, such liability must be predicated on a theory outside the language of the statute.
Morrow v. Cooper, 1991-NMCA-108, 113 N.M. 246, 824 P.2d 1048.

Piercing the corporate veil. -- A corporation will ordinarily be treated as a legal entity
separate from its shareholders, and individual shareholders cannot be held personally
liable for the corporation's debt. Under certain circumstances, however, courts may
exercise their equitable powers to pierce the corporate veil and require shareholders to
answer for the corporation's liability. To pierce the corporate veil, the district court must
find that the corporation was operated in a fashion not to serve the valid goals and
purposes of that corporation but instead under the domination and control and for the
purposes of some dominant party, that there is some form of moral culpability
attributable to the shareholder such as use of the corporation to perpetrate a fraud, and
that there is some reasonable relationship between the injury suffered by the plaintiff
and the actions of the defendant. Morrissey v. Krystopowicz, 2016-NMCA-011.

Where defendant set up corporations to own and operate a number of nursing homes in
New Mexico, and where defendant channeled millions of dollars from the revenues of
the nursing homes to an account controlled by defendant, from which hundreds of
thousands of dollars in distributions were made to defendant and a co-owner of the
corporation, evidence that defendant exercised improper domination of the
corporations, that defendant used the corporations for improper purposes, and that
defendant's abuse of the corporate form resulted in a sham corporation leading to
plaintiff's inability to recover for her injury, was sufficient to pierce the corporate veil of
the sham corporations such that defendant can be held liable for the corporations'
liabilities. Morrissey v. Krystopowicz, 2016-NMCA-011.

Fraud in the inducement in shareholder agreement of professional corporation. --
Where there is fraud in the inducement to enter into a shareholder agreement, the
contract is voidable, capable of being affirmed or rejected at the option of one of the
parties, and remains in effect until the fraud by which the defrauded party had been
induced to sign is discovered. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-
NMCERT-001.

Where appellant shareholder, without the knowledge of other shareholders, modified his
shareholder employment agreement, putting in place a more generous deferred
compensation package than the other shareholders, there is fraud in the inducement to
enter into the contract and the contract is voidable, remaining in effect until the fraud is
discovered. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.

Punitive damages for breach of fiduciary duties. -- Punitive damages are
appropriate when an actor willfully breaches fiduciary duties. Jones v. Augé, 2015-
NMCA-016, cert. denied, 2015-NMCERT-001.

Where appellant shareholder, without the knowledge of other shareholders, modified his
shareholder employment agreement, putting in place a more generous deferred
compensation package than the other shareholders, overpaid himself by hundreds of
thousands of dollars, failed to inform other shareholders of bonuses paid to himself
without appropriate basis, controlled the shareholder allocation sheets that the
shareholders used to track their compensation, failed to inform other shareholders of
material facts and information relating to business and financial affairs, knowingly
submitted incorrect information about his bonuses at shareholder meetings, and
knowingly and intentionally paid himself bonuses to the substantial economic detriment
of the other shareholders and the corporation itself, the award of punitive damages was
appropriate. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.

Contract reformation is a remedy for fraud and may form the basis for an award
of punitive damages. -- Contract reformation is an equitable remedy by which a court
will modify a written agreement to reflect the actual intent of the parties, usually to
correct fraud or mutual mistake in the writing; where a plaintiff has established a cause
of action in equity and the wrongdoer's misconduct is willful, wanton, malicious,
reckless, fraudulent and in bad faith, punitive damages are allowable to do complete
justice. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.
Where appellant shareholder, without the knowledge of other shareholders, modified his
shareholder employment agreement, putting in place a more generous deferred
compensation package than the other shareholders, overpaid himself by hundreds of
thousands of dollars, failed to inform other shareholders of bonuses paid to himself
without appropriate basis, controlled the shareholder allocation sheets that the
shareholders used to track their compensation, failed to inform other shareholders of
material facts and information relating to business and financial affairs, knowingly
submitted incorrect information about his bonuses at shareholder meetings, and
knowingly and intentionally paid himself bonuses to the substantial economic detriment
of the other shareholders and the corporation itself, appellees request to make all the
shareholder agreements equal fell squarely within the definition of the equitable remedy
of contract reformation, and the award of punitive damages was appropriate. Jones v.
Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.

Act inapplicable to corporation organized for banking. -- The powers and
authorities established for corporations by the Business Corporation Act, including the
authority to issue preferred stock, would not apply to a corporation organized for the
purpose of banking. 1979 Op. Att'y Gen. No. 79-06.

How corporation may be terminated. -- A corporation being granted life by the act of
a sovereign, that is by the act of the laws of the state wherein it is incorporated, nothing
less than that power or the lapse of the period of life provided by the articles of
incorporation or by the dissolution of the corporation by permission of the sovereignty
can take that life away. 1953 Op. Att'y Gen. No. 53-5723 (rendered under former law).

Law reviews. -- For article, "Attachment in New Mexico - Part I," see 1 Nat. Res. J.
303 (1961).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253 (1987).

For note, "Piercing the Corporate Veil in New Mexico: Scott v. AZL Res., Inc.," see 21
N.M.L. Rev. 429 (1991).

For note, "The Fiduciary Duties Owed in a New Mexico Closely Held Corporation: Walta
v. Gallegos Law Firm, P.C.", see 34 N.M.L. Rev. (2004).

53-11-2. Definitions.

    As used in the Business Corporation Act [Chapter 53, Articles 11 to 18 NMSA 1978],
unless the text otherwise requires:

    A. "corporation" or "domestic corporation" means a corporation for profit subject to
the provisions of the Business Corporation Act, except a foreign corporation;
    B. "foreign corporation" means a corporation for profit organized under laws other
than the laws of this state for a purpose for which a corporation may be organized under
the Business Corporation Act;

    C. "articles of incorporation" means the original or restated articles of incorporation
or articles of consolidation and all amendments thereto, including articles of merger;

    D. "shares" means the units into which the proprietary interests in a corporation are
divided;

    E. "subscriber" means one who subscribes for shares in a corporation, whether
before or after incorporation;

    F. "shareholder" means one who is a holder of record of shares in a corporation;

    G. "authorized shares" means the shares of all classes which the corporation is
authorized to issue;

    H. "annual report" means the corporate report required by the Corporate Reports
Act [Chapter 53, Article 5 NMSA 1978];

    I. "distribution" means a direct or indirect transfer of money or other property
(except its own shares) or incurrence of indebtedness, by a corporation to or for the
benefit of any of its shareholders in respect of any of its shares, whether by dividend or
by purchase redemption or other acquisition of its shares, or otherwise;

    J. "franchise tax" means the franchise tax imposed by the Corporate Income and
Franchise Tax Act [Chapter 7, Article 2A NMSA 1978];

    K. "fees" means the fees imposed by Section 53-2-1 NMSA 1978;

    L. "commission" means the public regulation commission [secretary of state] or its
delegate;

    M. "address" means:

         (1) the mailing address and the street address, if within a municipality; or

         (2) the mailing address and a rural route number and box number, if any, or
the geographical location, using well-known landmarks, if outside a municipality; and

    N. "delivery" means:

         (1) if personally served, the date on which the documentation is received by
the corporations bureau of the commission; and
         (2) if mailed, the date of the postmark plus three days, upon proof thereof by
the party delivering the documentation.

History: 1953 Comp., § 51-24-2, enacted by Laws 1967, ch. 81, § 2; 1975, ch. 64, § 1;
1977, ch. 103, § 10; 1983, ch. 304, § 21; 1989, ch. 385, § 1; 1998, ch. 108, § 28; 2001,
ch. 200, § 41.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 2 of the ABA Model Business
Corporation Act.

The 2001 amendment, effective July 1, 2001, deleted Subsection N, which defined
"duplicate original" and Subsection P, which defined "person", and redesignated former
Subsection O as Subsection N.

The 1998 amendment, effective January 1, 1999, deleted "or purposes" preceding "for
which a corporation" near the middle of Subsection B; in Subsection J inserted
"Corporate Income and"; substituted "public regulation" for "state corporation" near the
end of Subsection L; substituted "that" for "which" in Subsection N; and substituted
"corporations bureau of the commission" for "commission's corporation department"
near the end of Paragraph O(1).

The 1989 amendment, effective June 16, 1989, substituted the present provisions of
Subsection M for "address means a recitation of the mailing address or post office box
number and the street address, if within a municipality, or a description of the
geographical location, if outside a municipality"; and added Subsection P.

The 1983 amendment, effective June 17, 1983, redesignated former Subsections O to
T as present Subsections H and J to N, respectively, added present Subsections I and
O, deleted former Subsections H to N, which concerned the terms "treasury shares,"
"net assets," "stated capital," "surplus," "earned surplus," "capital surplus," and
"insolvent", substituted "corporate" for "annual" in Subsection H, substituted "the
Franchise Tax Act" for "Article 3 of Chapter 53 NMSA 1978" at the end of Subsection J,
added "or its delegate" at the end of Subsection L, and deleted "and" at the end of
Subsection M.

Change of legal domicile only. -- Where the corporation name, its principal address,
the nature of the business conducted, the assets and the shareholders will remain the
same and the only change is one of legal domicile, the new corporation will not be
required to apply for certificates of title to the vehicles and will not have to pay the one
percent excise tax. 1957 Op. Att'y Gen. No. 57-05 (rendered under former law).

Foreign Massachusetts or business trust not required to procure certificate of
authority as a foreign corporation before transacting business in the state. 1970 Op.
Att'y Gen. No. 70-104.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

53-11-3. Purposes.

    Corporations may be organized under the Business Corporation Act for any lawful
purpose or purposes, except banking, insurance, credit unions, savings and loan
associations, railroads and waterworks organized under the Laws of 1887, Chapter 12.

History: 1953 Comp., § 51-24-3, enacted by Laws 1967, ch. 81, § 3.

                                               ANNOTATIONS

Compiler's notes. -- Laws 1887, ch. 12, referred to in this section, is compiled as 62-
2-1 to 62-2-15, 62-2-17 to 62-2-19, 62-2-21 and 62-2-22 NMSA 1978.

This section is derived from Section 3 of the ABA Model Business Corporation Act.

Statute not for incorporation of savings bank. -- If the purpose, or one of the
purposes, of incorporating is to operate a savings bank, this statute is not available.
First Thrift & Loan Ass'n v. State ex rel. Robinson, 1956-NMSC-099, 62 N.M. 61, 304
P.2d 582 (decided under 51-2-6, 1953 Comp., now repealed).

No banking business under general corporation laws. -- A corporation cannot
organize under the general corporation laws and thereafter conduct a banking business
whether or not said corporation has two departments. First Thrift & Loan Ass'n v. State
ex rel. Robinson, 1956-NMSC-099, 62 N.M. 61, 304 P.2d 582 (decided under 51-2-6,
1953 Comp., now repealed).

Law reviews. -- For survey, "Article VII of the New Probate Code: In Pursuit of Uniform
Trust Administration," see 6 N.M.L. Rev. 213 (1976).
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 192 to
198, 204.

18 C.J.S. Corporations § 28.

53-11-4. General powers.

    Each corporation has power to:

    A. have perpetual succession by its corporate name unless a limited period of
duration is stated in its articles of incorporation;

    B. sue and be sued, complain and defend, in its corporate name;

    C. have a corporate seal which may be altered at pleasure, and to use the seal by
causing it, or a facsimile thereof, to be impressed or affixed or in any other manner
reproduced, but failure to have or to affix a corporate seal does not affect the validity of
any instrument, or any action taken in pursuance thereof or in reliance thereon;

    D. purchase, take, receive, lease or otherwise acquire, own, hold, improve, use and
otherwise deal in and with real or personal property, or any interest therein, wherever
situated;

    E. sell, convey, mortgage, pledge, lease, exchange, transfer and otherwise dispose
of all or any part of its property and assets;

    F. lend money to, and otherwise assist, its employees, officers and directors;

    G. purchase, take, receive, subscribe for or otherwise acquire, own, hold, vote, use,
employ, sell, mortgage, lend, pledge or otherwise dispose of, and otherwise use and
deal in and with, shares or other interests in, or obligations of, other domestic or foreign
corporations, associations, partnerships, limited partnerships or individuals, or direct or
indirect obligations of the United States or of any other government, state, territory,
governmental district or municipality or of any instrumentality thereof;

    H. make contracts and guarantees and incur liabilities, borrow money at such rates
of interest as the corporation may determine, issue its notes, bonds and other
obligations, and secure any of its obligations by mortgage or pledge of all or any of its
property, franchises and income;

    I. lend money for its corporate purposes, invest and reinvest its funds and take and
hold real and personal property as security for the payment of funds so loaned or
invested;

    J. conduct its business, carry on its operations, have offices and exercise the
powers granted by the Business Corporation Act within or without this state;
    K. elect or appoint directors, officers and agents of the corporation, and define their
duties and fix their compensation;

    L. make and alter bylaws, not inconsistent with its articles of incorporation or with
the laws of this state, for the administration and regulation of the affairs of the
corporation;

    M. make donations for the public welfare or for charitable, scientific, educational or
governmental purposes;

    N. transact any lawful business in aid of governmental policy;

    O. pay pensions and establish pension plans, pension trusts, profit-sharing plans,
stock bonus plans, stock option plans and other incentive plans for any or all of its
directors, officers and employees;

    P. be a promoter, partner, member, associate, trustee or manager of any
partnership, joint venture, trust or other enterprise;

    Q. resist a change or potential change in control of the corporation if the directors by
a majority vote of a quorum determine that the change or potential change is opposed
to or not in the best interest of the corporation upon consideration of the interests of the
corporation's shareholders and any of the matters set forth in Subsection D of Section
53-11-35 NMSA 1978; and

    R. have and exercise all powers necessary or convenient to effect its purposes.

History: 1953 Comp., § 51-24-4, enacted by Laws 1967, ch. 81, § 4; 1975, ch. 64, § 2;
1983, ch. 304, § 22; 1987, ch. 238, § 8.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 4 of the ABA Model Business
Corporation Act.

The 1987 amendment, effective April 9, 1987, added Subsection Q, redesignated
former Subsection Q as Subsection R, and deleted "and" from the end of Subsection P.

The 1983 amendment, effective June 17, 1983, redesignated former Subsections P to
R as present Subsections O to Q, respectively, and deleted former Subsection O, which
concerned the power to indemnify directors or officers of corporations.

Rule of limited liability. -- Normally the corporation is an insulator from liability on
claims of creditors, and the fact that incorporation was desired in order to obtain limited
liability does not defeat that purpose. Limited liability is the rule, not the exception; and
on that assumption large undertakings are rested, vast enterprises are launched and
huge sums of capital attracted. Scott Graphics, Inc. v. Mahaney, 1976-NMCA-038, 89
N.M. 208, 549 P.2d 623, cert. denied, 89 N.M. 322, 551 P.2d 1369.

Determination that shareholders are alter egos of corporation. -- Generally, the
determination that shareholders are the alter egos of the corporation describes the
specific situation where the shareholders have so manipulated the corporation to further
their own individual interests that the identity of the corporation has merged into its
shareholders, that is, where the two have, in fact, become so closely identified that a
court in ruling that the corporate entity should be disregarded is merely recognizing
reality. Scott Graphics, Inc. v. Mahaney, 1976-NMCA-038, 89 N.M. 208, 549 P.2d 623,
cert. denied, 89 N.M. 322, 551 P.2d 1369.

Corporate entity disregarded when used for fraud or injustice. -- The corporate
entity should be recognized and supported; however, it will be disregarded by the courts
when the corporation is used to perpetrate fraud or promote injustice. Scott Graphics,
Inc. v. Mahaney, 1976-NMCA-038, 89 N.M. 208, 549 P.2d 623, cert. denied, 89 N.M.
322, 551 P.2d 1369.

Disregard of formalities and ignorance of directors not enough. -- Disregard of
corporate formality in the operation of a corporation and considerable ignorance on the
part of the directors and officers as to its operation in and of themselves were not
enough to warrant disregarding the corporate entity, and there was no evidence of fraud
or injustice. Scott Graphics, Inc. v. Mahaney, 1976-NMCA-038, 89 N.M. 208, 549 P.2d
623, cert. denied, 89 N.M. 322, 551 P.2d 1369.

Law reviews. -- For article, "The New Mexico Professional Corporation," see 9 Nat.
Res. J. 591 (1969).

For article, "1975 Amendments to the New Mexico Business Corporation Act," see 6
N.M.L. Rev. 57 (1975).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1990
to 2123.

Right of business corporation to use its funds or property for humanitarian purposes, 3
A.L.R. 443.

Power of corporation to execute trust involving a determination regarding the personal
conduct or needs of beneficiaries, 11 A.L.R. 300.

Power of corporation to pass title to real property held in excess of corporate powers, 37
A.L.R. 204, 62 A.L.R. 494.
Corporation's right to sue on contract made by promoters before organization, 66 A.L.R.
1425.

Constitutionality, construction, and effect of statutory or charter provisions relating to the
sale of all or substantially all of the assets of corporation or division or distribution of
proceeds, 79 A.L.R. 624.

Assumption of mortgage as ultra vires, 91 A.L.R. 177.

Power of corporation to change obligations to stockholders, 105 A.L.R. 1452, 117
A.L.R. 1290.

Power of corporation to enforce a contract made after taking the steps necessary to put
its corporate existence beyond collateral attack, as affected by limited amount of capital
subscribed or paid in, 128 A.L.R. 874.

Power of corporation or its officers with respect to payment of bonus or pension to
officers or employees, 164 A.L.R. 1125.

Right of corporation to engage in business, trade, or activity requiring license from
public, 165 A.L.R. 1098.

Corporation's power with respect to payment of remuneration, bonus, and the like to
widow or family of deceased officer, 29 A.L.R.2d 1262.

Attorneys' fees and other expenses incident to controversy respecting internal affairs of
corporation as charge against corporation, 39 A.L.R.2d 580.

Power of a business corporation to donate to a charitable or similar institution, 39
A.L.R.2d 1192.

Corporation's power to enter into partnership or joint venture, 60 A.L.R.2d 917.

19 C.J.S. Corporations §§ 554 to 739.

53-11-4.1. Indemnification of directors and officers.

    A. As used in this section:

         (1) "director" means any person who is or was a director of the corporation
and any person who, while a director of the corporation, is or was serving at the request
of the corporation as a director, officer, partner, trustee, employee or agent of another
foreign or domestic corporation or nonprofit corporation, cooperative, partnership, joint
venture, trust, other incorporated or unincorporated enterprise or employee benefit plan
or trust;
         (2) "corporation" includes any domestic or foreign predecessor entity of the
corporation in a merger, consolidation or other transaction in which the predecessor's
existence ceased upon consummation of such transaction;

         (3) "expenses" include attorneys' fees;

         (4) "official capacity" means:

             (a) when used with respect to a director, the office of director in the
corporation; and

             (b) when used with respect to a person other than a director, as contemplated
in Subsection I of this section, the elective or appointive office in the corporation held by
the officer or the employment or agency relationship undertaken by the employee or
agent in behalf of the corporation, but in each case does not include service for any
other foreign or domestic corporation or nonprofit corporation, or any cooperative,
partnership, joint venture, trust, other incorporated or unincorporated enterprise or
employee benefit plan or trust;

         (5) "party" includes a person who was, is or is threatened to be made, a
named defendant or respondent in a proceeding; and

         (6) "proceeding" means any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative.

    B. A corporation shall have power to indemnify any person made a party to any
proceeding by reason of the fact that the person is or was a director if:

         (1) the person acted in good faith;

         (2) the person reasonably believed:

             (a) in the case of conduct in the person's official capacity with the corporation,
that the person's conduct was in its best interests; and

             (b) in all other cases, that the person's conduct was at least not opposed to its
best interests; and

         (3) in the case of any criminal proceeding, the person had no reasonable
cause to believe the person's conduct was unlawful. Indemnification may be made
against judgments, penalties, fines, settlements and reasonable expenses, actually
incurred by the person in connection with the proceeding; except that if the proceeding
was by or in the right of the corporation, indemnification may be made only against such
reasonable expenses and shall not be made in respect of any proceeding in which the
person shall have been adjudged to be liable to the corporation. The termination of any
proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere
or its equivalent, shall not, of itself, be determinative that the person did not meet the
requisite standard of conduct set forth in this subsection.

    C. A director shall not be indemnified under Subsection B of this section in respect
of any proceeding charging improper personal benefit to the director, whether or not
involving action in the director's official capacity, in which the director shall have been
adjudged to be liable on the basis that personal benefit was improperly received by the
director.

    D. Unless limited by the articles of incorporation:

         (1) a director who, in the opinion of the board of directors reasonably based
on the facts, circumstances and outcome of the proceeding, has been wholly
successful, on the merits or otherwise, in the defense of any proceeding referred to in
Subsection B of this section shall be indemnified against reasonable expenses incurred
by the director in connection with the proceeding; or

         (2) a court of appropriate jurisdiction, upon application of a director and such
notice as the court shall require, shall have authority to order indemnification in the
following circumstances:

             (a) if it determines a director is entitled to reimbursement under Paragraph (1)
of this subsection, the court shall order indemnification, in which case the director shall
also be entitled to recover the reasonable expenses of securing such reimbursement; or

             (b) if it determines that the director is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or not the director has
met the standard of conduct set forth in Subsection B of this section or has been
adjudged liable in the circumstances described in Subsection C of this section. The
court may order such indemnification except that indemnification with respect to any
proceeding by or in the right of the corporation or in which liability shall have been
adjudged in the circumstances described in Subsection C of this section shall be limited
to reasonable expenses. A court of appropriate jurisdiction may be the same court in
which the proceeding involving the director's liability took place.

    E. No indemnification under Subsection B of this section shall be made by the
corporation unless authorized in the specific case after a determination has been made
that indemnification of the director is permissible in the circumstances because the
director has met the standard of conduct set forth in Subsection B of this section. Such
determination shall be made:

         (1) by the board of directors by a majority vote of a quorum consisting of
directors not at the time parties to the proceeding;

         (2) if such a quorum cannot be obtained, by a majority vote of a committee of
the board duly designated to act in the matter by a majority vote of the full board, in
which designation directors who are parties may participate, and consisting solely of two
or more directors not at the time parties to the proceeding;

         (3) by special legal counsel, selected by the board of directors or a committee
thereof by vote as set forth in Paragraph (1) or (2) of this subsection or, if the requisite
quorum of the full board cannot be obtained therefor and such committee cannot be
established, by a majority vote of the full board, in which selection directors who are
parties may participate; or

         (4) by the shareholders.

    Authorization of indemnification and determination as to reasonableness of
expenses shall be made in the same manner as the determination that indemnification
is permissible, except that if the determination that indemnification is permissible is
made by special legal counsel, authorization of indemnification and determination as to
reasonableness of expenses shall be made in a manner specified in Paragraph (3) of
Subsection E of this section for the selection of such counsel. Shares held by directors
who are parties to the proceeding shall not be voted on the subject matter under this
subsection.

    F. Reasonable expenses incurred by a director who is a party to a proceeding may
be paid or reimbursed by the corporation in advance of the final disposition of such
proceeding if:

         (1) the director furnishes the corporation a written affirmation of his good faith
belief that the director has met the standard of conduct necessary for indemnification by
the corporation as authorized in this section;

         (2) the director furnishes the corporation a written undertaking by or on behalf
of the director to repay such amount if it shall ultimately be determined that the director
has not met such standards of conduct; and

         (3) a determination is made that the facts then known to those making the
determination would not preclude indemnification under this section.

    The undertaking required by Paragraph (2) of this subsection shall be an unlimited
general obligation of the director but need not be secured and may be accepted without
reference to financial ability to make repayment. Determinations and authorizations of
payments under this subsection shall be made in the manner specified in Subsection E
of this section.

    G. The indemnification authorized by this section shall not be deemed exclusive of
any other rights to which those seeking indemnification may be entitled under the
articles of incorporation, the bylaws, an agreement, a resolution of shareholders or
directors or otherwise, both as to action in an official capacity and as to action in
another capacity while holding such office, shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.

    H. For purposes of this section, the corporation shall be deemed to have requested
a director to serve an employee benefit plan whenever the performance by the director
of duties to the corporation also imposes duties on, or otherwise involves services by,
the director to the plan or participants or beneficiaries of the plan; excise taxes
assessed on a director with respect to an employee benefit plan pursuant to applicable
law shall be deemed "fines"; and action taken or omitted by the director with respect to
an employee benefit plan in the performance of duties for a purpose reasonably
believed by the director to be in the interest of the participants and beneficiaries of the
plan shall be deemed to be for a purpose which is not opposed to the best interests of
the corporation.

    I. Unless limited by the articles of incorporation:

         (1) an officer of the corporation shall be indemnified as and to the same
extent provided in Subsection D of this section for a director and shall be entitled to the
same extent as a director to seek indemnification pursuant to the provisions of that
subsection;

         (2) a corporation shall have the power to indemnify and to advance
reasonable expenses to an officer, employee or agent of the corporation to the same
extent that it may indemnify and advance reasonable expenses to directors pursuant to
this section; and

         (3) a corporation, in addition, shall have the power to indemnify and to
advance reasonable expenses to an officer, employee or agent who is not a director to
such further extent, consistent with law, as may be provided by its articles of
incorporation, bylaws, general or specific action of its board of directors, or contract.

    J. A corporation shall have power to purchase and maintain insurance or furnish
similar protection, including but not limited to providing a trust fund, a letter of credit or
self-insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation or who, while a director, officer, employee or agent of the
corporation, is or was serving at the request of the corporation as a director, officer,
partner, trustee, employee or agent of another foreign or domestic corporation or
nonprofit corporation, cooperative, partnership, joint venture, trust, other incorporated or
unincorporated enterprise or employee benefit plan or trust, against any liability
asserted against and incurred by the person in any such capacity or arising out of the
person's status as such, whether or not the corporation would have the power to
indemnify the person against such liability under the provisions of this section.

    K. Any indemnification of, or advance of expenses to, a director in accordance with
this section, if arising out of a proceeding by or in the right of the corporation, shall be
reported in writing to the shareholders with or before the notice of the next shareholders'
meeting.

History: 1978 Comp., § 53-11-4.1, enacted by Laws 1983, ch. 304, § 23; 1987, ch. 238,
§ 9.

                                               ANNOTATIONS

The 1987 amendment, effective April 9, 1987, substituted "other incorporated or
unincorporated enterprise or employee benefit plan or trust" for "other enterprise or
employee benefit plan" throughout the section; inserted "reasonable" preceding
"expenses" throughout the section; in Subsection A(1), inserted "or nonprofit
corporation, cooperative"; in Subsection A(4)(b), inserted "or nonprofit corporation, or
any cooperative"; in Subsection D(1), substituted "in the opinion of the board of
directors" for "in the board of director's opinion"; in Subsection D(2)(b), inserted "except
that indemnification" in the second sentence; in Subsection F, substituted "final
disposition of such proceeding if" for "final disposition of such proceeding upon receipt
by the corporation of"; in Subsections F(1) and (2), inserted "the director furnishes the
corporation" at the beginning; designated part of former Subsection F(2) as present
Subsection F(3); in the next-to-last sentence in Subsection F, substituted "Paragraph (2)
of this subsection" for "this Paragraph"; substituted present Subsection G for the former
provisions of that subsection as set out in the 1983 Replacement Pamphlet; and in
Subsection J, inserted "or furnished similar protection, including but not limited to
providing a trust fund, a letter of credit or self-insurance" near the beginning and
inserted "or nonprofit corporation, cooperative" near the middle of the subsection.

The purpose of this section is to encourage qualified individuals to accept the
responsibilities of corporate management without fear that expenses incurred by them
in performing their duties as directors will not be borne by the corporation they serve. To
expand the list of persons entitled to claim the benefit of indemnification to include
signatories to a buy-sell agreement, who are litigating questions under that agreement
for their own private benefit, would go far beyond this purpose of the statute. Petty v.
Bank of N.M. Holding Co., 1990-NMSC-021, 109 N.M. 524, 787 P.2d 443.

Scope of power conferred by Subsection B. -- Subsection B operates to empower
corporations to indemnify their directors and other agents; it does not confer on the
indemnified director an unquestionable right to indemnification. Petty v. Bank of N.M.
Holding Co., 1990-NMSC-021, 109 N.M. 524, 787 P.2d 443.

Effect of Subsection D(1). -- Subsection D(1) gives a director who has been wholly
successful in the defense of a proceeding the absolute right to indemnification under the
circumstances contemplated by it, and it makes the "opinion of the board of directors"
final on the question, assuming that their opinion is "reasonable." Petty v. Bank of N.M.
Holding Co., 1990-NMSC-021, 109 N.M. 524, 787 P.2d 443.

53-11-5. Power of corporation to acquire its own shares.
    A. As used in this section, "treasury shares" means shares of a corporation issued
and subsequently acquired by the corporation but that have not been restored to the
status of unissued shares.

    B. A corporation has the power to purchase, redeem, receive, take or otherwise
acquire, own and hold, sell, lend, exchange, transfer or otherwise dispose of and to
pledge, use and otherwise deal in and with its own shares.

    C. Treasury shares do not carry voting rights or participate in distributions, may not
be counted as outstanding shares for any purpose and may not be counted as assets of
the corporation for the purpose of computing the amount available for distributions.
Unless the articles of incorporation provide otherwise, treasury shares may be retired
and restored to the status of authorized and unissued shares without an amendment to
the articles of incorporation or may be disposed of for such consideration as the board
of directors may determine.

    D. This section does not limit the right of a corporation to vote its shares held by it in
a fiduciary capacity.

    E. If the articles of incorporation provide that treasury shares that are retired shall
not be reissued, the authorized shares shall be reduced by the number of treasury
shares retired.

    F. If the number of authorized shares is reduced by a retirement of treasury shares,
the corporation shall, on or before the time for filing its next corporate report under the
Corporate Reports Act [Chapter 53, Article 5 NMSA 1978] with the commission
[secretary of state], file a statement of reduction showing the reduction in the authorized
shares. The statement of reduction shall be executed by the corporation by an officer of
the corporation and shall set forth:

         (1) the name of the corporation;

         (2) the number of authorized shares reduced, itemized by classes and series;
and

         (3) the aggregate number of authorized shares, itemized by classes and
series, after giving effect to such reduction.

History: 1953 Comp., § 51-24-5, enacted by Laws 1967, ch. 81, § 5; 1983, ch. 304, §
24; 2001, ch. 200, § 42.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 6 of the ABA Model Business
Corporation Act.

The 2001 amendment, effective July 1, 2001, added present Subsection A and
renumbered former Subsection A as Subsection B; in present Subsection B, rewrote the
first sentence which formerly read "A corporation shall have the power to acquire its
own shares." and deleted the second sentence, which read "All of its own shares
acquired by a corporation shall, upon acquisition, constitute authorized but unissued
shares, unless the articles of incorporation provide that they shall not be reissued, in
which case the authorized shares shall be reduced by the number of shares acquired.";
inserted Subsections C, D and E and renumbered former Subsection B as Subsection
F; and in Subsection F, substituted "a retirement of treasury shares" for "an acquisition"
in the first sentence, deleted "verified by the officer signing the statement, and"
preceding "shall set forth", and substituted "authorized" for "acquired" in Paragraph (2).

The 1983 amendment, effective June 17, 1983, rewrote this section to the extent that a
detailed comparison would be impracticable.

Corporation purchase of own stock. -- Corporation may purchase its own stock,
keep it alive and treat it as an asset on its books, free of conditions, limitations or
reservations. Woodson v. Lee, 1963-NMSC-187, 73 N.M. 425, 389 P.2d 196 (decided
under former law).

Law reviews. -- For article, "1983 Amendments to the New Mexico Business
Corporation Act and Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 2061
to 2076.

Voting power of corporation stock as confined to issued and outstanding stock to
exclusion of authorized unissued stock or stock which has been reacquired by the
corporation, 90 A.L.R. 315.

19 C.J.S. Corporations §§ 561 to 563.

53-11-6. Defense of ultra vires.
    No act of a corporation and no conveyance or transfer of real or personal property to
or by a corporation is invalid because the corporation was without capacity or power to
do such act or to make or receive such conveyance or transfer, but such lack of
capacity or power may be asserted:

    A. in a proceeding by a shareholder against the corporation to enjoin the doing of
any act or acts or the transfer of real or personal property by or to the corporation. If the
unauthorized acts or transfer sought to be enjoined are being, or are to be, performed or
made pursuant to any contract to which the corporation is a party, the court may, if all of
the parties to the contract are parties to the proceeding and if it deems the same to be
equitable, set aside and enjoin the performance of the contract, and in so doing may
allow to the corporation or to the other parties to the contract, as the case may be,
compensation for the loss or damage sustained by either of them which may result from
the action of the court in setting aside and enjoining the performance of the contract, but
anticipated profits to be derived from the performance of the contract shall not be
awarded by the court as a loss or damage sustained;

    B. in a proceeding by the corporation, whether acting directly or through a receiver,
trustee or other legal representative, or through shareholders in a representative suit,
against the incumbent or former officers or directors of the corporation; or

    C. in a proceeding by the attorney general, as provided in the Business Corporation
Act, to dissolve the corporation, or in a proceeding by the attorney general to enjoin the
corporation from the transaction of unauthorized business.

History: 1953 Comp., § 51-24-6, enacted by Laws 1967, ch. 81, § 6.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 7 of the ABA Model Business
Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 2009
to 2033.

19 C.J.S. Corporations §§ 573 to 579.

53-11-7. Corporate name.

    A. The corporate name shall:

         (1) contain the separate word "corporation," "company," "incorporated" or
"limited" or shall contain a separate abbreviation of one of these words;
         (2) not contain any word or phrase which indicates or implies that it is
organized for any purpose other than one or more of the purposes contained in its
articles of incorporation; and

         (3) not be the same as, or confusingly similar to, the name of any domestic
corporation existing under the laws of this state or any foreign corporation authorized to
transact business in this state, or a name the exclusive right to which is, at the time,
reserved in the manner provided in the Business Corporation Act, or the name of a
corporation which has in effect a registration of its corporate name as provided in the
Business Corporation Act.

    B. Paragraph (3) of Subsection A of this section shall not apply if the applicant files
with the commission [secretary of state] either:

         (1) the written consent of such other corporation or holder of a reserved or
registered name to use the same or confusingly similar name and one or more words
are added to make the name distinguishable from the other name; or

         (2) a certified copy of a final decree of a court of competent jurisdiction
establishing the prior right of the applicant to the use of the name in this state.

History: 1953 Comp., § 51-24-7, enacted by Laws 1967, ch. 81, § 7; 1975, ch. 64, § 3;
1983, ch. 304, § 25.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 8 of the ABA Model Business
Corporation Act.

The 1983 amendment, effective June 17, 1983, inserted "separate" in two places in
Paragraph (1) of Subsection A.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporations Act," see 6 N.M.L. Rev. 57 (1975).
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 273,
277, 283, 284, 286 to 299.

What names import corporation within rule that one contracting with body described by
corporate name is estopped to deny its corporate existence, 5 A.L.R. 1580.

Corporation doing business and making contracts under assumed name, 56 A.L.R. 450.

Validity and construction of constitutional or statutory provisions which prohibit the use
by a corporation or partnership, as a part of its name, of certain described words giving
the impression that it is subject to governmental control, 63 A.L.R. 1049.

Use of abbreviations of name of municipal body or private corporation in designating
party to judicial proceedings, 167 A.L.R. 1217.

18 C.J.S. Corporations §§ 98 to 105.

53-11-8. Reserved name.

    A. The exclusive right to the use of a corporate name may be reserved by:

         (1) any person intending to organize a corporation under the Business
Corporation Act;

         (2) any domestic corporation intending to change its name;

         (3) any foreign corporation intending to make application for a certificate of
authority to transact business in this state;

         (4) any foreign corporation authorized to transact business in this state and
intending to change its name; or

         (5) any person intending to organize a foreign corporation and intending to
have such corporation make application for a certificate of authority to transact business
in this state.

    B. The reservation shall be made by filing with the commission [secretary of state]
an application to reserve a specified corporate name, executed by the applicant. If the
commission [secretary of state] finds that the name is available for corporate use, it
shall reserve the name for the exclusive use of the applicant for a period of one hundred
and twenty days.

    C. The right to the exclusive use of a specified corporate name so reserved may be
transferred to any other person or corporation by filing in the office of the commission
[secretary of state] a notice of transfer, executed by the applicant for whom the name
was reserved, and specifying the name and address of the transferee.
History: 1953 Comp., § 51-24-8, enacted by Laws 1967, ch. 81, § 8.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 9 of the ABA Model Business
Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 289 to
293.

Right to protection of corporate name as between domestic corporation and foreign
corporation not qualified to do business in state, 26 A.L.R.3d 994.

Protection of business or trading corporation against use of same or similar name by
another corporation, 72 A.L.R.3d 8.

53-11-9. Registered name.

    A. Any foreign corporation not authorized to transact business in this state may
register its corporate name under the Business Corporation Act if its corporate name is
not the same as, or confusingly similar to, the name of any domestic corporation
existing under the laws of this state, or the name of any foreign corporation authorized
to transact business in this state, or any corporate name reserved or registered under
the Business Corporation Act.

    B. Registration shall be made by:

         (1) filing with the commission [secretary of state]:

             (a) an application for registration executed by the corporation by an officer
thereof, setting forth the name of the corporation, the state or territory under the laws of
which it is incorporated, the date of its incorporation, a statement that it is carrying on or
doing business, and a brief statement of the business in which it is engaged; and
             (b) a certificate setting forth that the corporation is in good standing under the
laws of the state or territory in which it is organized, executed by the secretary of state
of the state or territory or by the official who may have custody of the records pertaining
to corporations; and

         (2) paying to the commission [secretary of state] a registration fee in the
amount of one dollar ($1.00) for each month, or fraction thereof, between the date of
filing the application and December 31 of the calendar year in which the application is
filed.

    C. Registration shall be effective until the close of the calendar year in which the
application for registration is filed.

History: 1953 Comp., § 51-24-9, enacted by Laws 1967, ch. 81, § 9.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 10 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 289 to
293.

Right to protection of corporate name as between domestic corporation and foreign
corporation not qualified to do business in state, 26 A.L.R.3d 994.

53-11-10. Renewal of registered name.

    A corporation which has in effect a registration of its corporate name, may renew the
registration from year to year by annually filing an application for renewal setting forth
the facts required to be set forth in an original application for registration and a
certificate of good standing as required for the original registration and by paying a fee
of ten dollars ($10.00). A renewal application may be filed between October 1 and
December 31 each year, and shall extend the registration for the following calendar
year.
History: 1953 Comp., § 51-24-10, enacted by Laws 1967, ch. 81, § 10.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 11 of the ABA Model
Business Corporation Act.

53-11-11. Registered office and registered agent.

    Each corporation shall have and continuously maintain in this state:

         A. a registered office which may be, but need not be, the same as its place of
business; and

         B. a registered agent, which agent may be either an individual resident in this
state whose business office is identical with the registered office, or a domestic
corporation, or a foreign corporation authorized to transact business in this state, having
a business office identical with the registered office.

History: 1953 Comp., § 51-24-11, enacted by Laws 1967, ch. 81, § 11.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 12 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- Propriety and effect of corporation's
appearance pro se through agent who is not attorney, 8 A.L.R.5th 653.

53-11-12. Failure to appoint and maintain registered agent; penalty;
reinstatement.

    A. If a corporation fails for a period of thirty days to file the corporate reports
required pursuant to Section 53-5-2 NMSA 1978 or to appoint and maintain a registered
agent in this state or has failed for thirty days after change of its registered office or
registered agent to file in the office of the commission [secretary of state] a statement of
the change, the commission [secretary of state] shall notify the corporation of its
delinquency by letter to the corporation's principal office. If the delinquency is not
corrected within sixty days from the date the letter is mailed, the commission [secretary
of state] shall issue a certificate of revocation that recites the grounds for revocation and
its effective date.

    B. A corporation administratively revoked pursuant to this section may apply to the
commission [secretary of state] for reinstatement within two years after the effective
date of revocation. The application shall:
         (1) recite the name of the corporation and the effective date of its
administrative revocation;

         (2) state that the ground or grounds for revocation either did not exist or have
been eliminated; and

         (3) state that the corporation's name satisfies the requirements of Section 53-
11-7 NMSA 1978.

    C. If the commission [secretary of state] determines that the application contains the
information required by Subsection B of this section and that the information is correct, it
shall cancel the certificate of revocation and prepare a certificate of reinstatement that
recites its determination and the effective date of reinstatement, file the original of the
certificate and serve a copy on the corporation.

    D. When the reinstatement is effective, it relates back to and takes effect as of the
effective date of the administrative revocation and the corporation resumes carrying on
its business as if the administrative revocation had never occurred.

History: 1953 Comp., § 51-24-11.1, enacted by Laws 1967, ch. 252, § 3; 2001, ch. 200,
§ 43; 2003, ch. 318, § 30.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is not a part of the ABA Model Business Corporation
Act.

The 2003 amendment, effective July 1, 2003, in Subsection A, inserted "file the
corporate reports required pursuant to Section 53-5-2 NMSA 1978 or to" following "thirty
days to" and deleted "certified" following "statement delinquency by".

The 2001 amendment, effective July 1, 2001, inserted "reinstatement" in the section
heading; inserted the Subsection A designation and added Subsections B, C and D;
and in Subsection A, substituted "sixty days from the date the letter is mailed" for "thirty
days form the date the letter is transmitted" and changed the consequences for a
delinquent corporation, which formerly provided for the names and records of the
corporation stricken from commission files, the issuance of a notice of dissolution, the
setting of a hearing date, and appeal procedures.

53-11-13. Change of registered office or registered agent.

    A. A corporation may change its registered office or change its registered agent, or
both, upon filing in the office of the public regulation commission [secretary of state] a
statement setting forth:

         (1) the name of the corporation;

         (2) the address of its registered office;

         (3) if the address of its registered office is to be changed, the address to
which the registered office is to be changed;

         (4) the name of its registered agent;

         (5) if its registered agent is to be changed:

             (a) the name of its successor registered agent; and

             (b) a statement executed by the successor registered agent acknowledging
his acceptance of the appointment by the filing corporation as its registered agent, if the
agent is an individual, or a statement executed by an authorized officer of a corporation
that is the successor registered agent in which the officer acknowledges the
corporation's acceptance of the appointment by the filing corporation as its registered
agent, if the agent is a corporation; and

         (6) that the address of its registered office and the address of the business
office of its registered agent, as changed, will be identical.

    B. The statement shall be executed by the corporation by an authorized officer and
delivered to the public regulation commission [secretary of state]. If the commission
[secretary of state] finds that the statement conforms to the provisions of the Business
Corporation Act, it shall file the statement in its office, and, upon such filing, the change
of address of the registered office or the appointment of a new registered agent, or both,
as the case may be, becomes effective, and, upon filing, fulfills the requirement to file a
supplemental report under Section 53-5-2 NMSA 1978.

    C. Any registered agent of a corporation may resign upon filing a written notice of
resignation with the public regulation commission [secretary of state]. The commission
[secretary of state] shall mail a copy immediately to the corporation at its principal place
of business as shown on the records of the commission [secretary of state]. The
appointment of the resigning agent shall terminate upon the expiration of thirty days
after receipt of the notice by the commission [secretary of state].

    D. If a registered agent changes his business address to another place within the
same county, he may change the address and the address of the registered office of
any corporation of which he is the registered agent by filing a statement as required by
this section except that it need be signed only by the registered agent, need not be
responsive to Paragraph (5) of Subsection A of this section and shall recite that a copy
of the statement has been mailed to the corporation.

    E. 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 corporation for which the registered agent is the registered agent by
notifying the corporation in writing of the change and signing, either manually or in
facsimile, and delivering to the public regulation commission [secretary of state] for filing
a statement that complies with the requirements of Subsection A of this section, and
recites that the corporation has been notified of the change.

History: 1953 Comp., § 51-24-12, enacted by Laws 1967, ch. 81, § 12; 1975, ch. 64, §
4; 1977, ch. 103, § 11; 2001, ch. 200, § 44; 2003, ch. 318, § 31.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 13 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, inserted "public regulation" in
Subsections A to C; substituted "53-5-2" for "53-5-5" following "report under Section" in
Subsection B; deleted "and" following "the registered agent" in Subsection D; and
added Subsection E.

The 2001 amendment, effective July 1, 2001, in Paragraph A(5)(b), substituted "a
statement" for "an affidavit" in two places, substituted "an authorized officer" for "the
president or vice president"; in Subsection B, substituted "an authorized officer" for "its
president, vice president, and verified by him" in the first sentence, and updated the
internal reference at the end of the subsection; and in Subsection C, substituted "a
written notice of resignation" for "a written notice thereof, executed in duplicate".

53-11-14. Service of process on corporation.

    The registered agent appointed by a corporation shall be an agent of the corporation
upon whom any process, notice or demand required or permitted by law to be served
upon the corporation may be served. Nothing in this section limits or affects the right to
serve any process, notice or demand required or permitted by law to be served upon a
corporation in any other manner now or hereafter permitted by law.

History: 1953 Comp., § 51-24-13, enacted by Laws 1967, ch. 81, § 13.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 14 of the ABA Model
Business Corporation Act.

Cross references. -- For service of process on secretary of state, see 38-1-5 NMSA
1978.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2192,
2194.

What suits at domicile of corporation involving corporate stock, or rights and obligations
incident thereto, are in rem, jurisdiction of which may rest on constructive service of
process against nonresident, 145 A.L.R. 1393.

Setting aside default judgment for failure of statutory agent on whom process was
served to notify defendant, 20 A.L.R.2d 1179.

Service in absence of express statutory direction on dissolved domestic corporation, 75
A.L.R.2d 1399.

19 C.J.S. Corporations §§ 721 to 735.

53-11-15. Authorized shares.

    A. Each corporation has power to create and issue the number of shares stated in
its articles of incorporation. The shares may be divided into one or more classes with
the designation, preferences, limitations and relative rights stated in the articles of
incorporation. The articles of incorporation may limit or deny the voting rights of, or
provide special voting rights for, the shares of any class to the extent not inconsistent
with the provisions of the Business Corporation Act.
    B. Without limiting the authority granted in this section, a corporation, when so
provided in its articles of incorporation, may issue shares of preferred or special
classes:

         (1) subject to the right of the corporation to redeem any of the shares at the
price fixed by the articles of incorporation for the redemption thereof;

         (2) entitling the holders thereof to cumulative, noncumulative or partially
cumulative dividends;

         (3) having preference over any other class or classes of shares as to the
payment of dividends;

         (4) having preference in the assets of the corporation over any other class or
classes of shares upon the voluntary or involuntary liquidation of the corporation; or

         (5) convertible into shares of any other class or into shares of any series of
the same or any other class, except a class having prior or superior rights and
preferences as to dividends or distribution of assets upon liquidation.

History: 1953 Comp., § 51-24-14, enacted by Laws 1967, ch. 81, § 14; 1975, ch. 64, §
5; 1983, ch. 304, § 26.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 15 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, in the second sentence of Subsection
A deleted "any or all of which classes may consist of shares with par value or shares
without par value," following "classes" and substituted "designation" for "designations"
and at the end of Subsection B(5) deleted "but shares without par value shall not be
converted into shares with par value unless that part of the stated capital of the
corporation represented by such shares without par value is, at the time of conversion,
at least equal to the aggregate par value of the shares into which the shares without par
value are to be converted or the amount of any such deficiency is transferred from
surplus to stated capital."

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 431 to
445, 463.

Rights of holders of preferred stock in respect of dividends, 6 A.L.R. 802, 67 A.L.R. 765,
98 A.L.R. 1526, 133 A.L.R. 653.
Nonpar stock, 19 A.L.R. 131, 36 A.L.R. 791, 45 A.L.R. 1501, 65 A.L.R. 1347.

Power of corporation to change obligations to stockholders, 105 A.L.R. 1452, 117
A.L.R. 1290.

Validity of cancellation of accrued dividends on preferred corporate stock, 8 A.L.R.2d
893.

Statutory requirements respecting issuance of corporate stock as applicable to foreign
corporations, 8 A.L.R.2d 1185.

Rights of preferred stockholders as to passed or accumulated dividends in going
concern, 27 A.L.R.2d 1073.

Meaning of "book value" of corporate stock, 51 A.L.R.2d 606.

Failure to issue stock as factor in disregard of corporate entity, 8 A.L.R.3d 1122.

Lis pendens in suit to compel stock transfer, 48 A.L.R.4th 731.

Employee's control or ownership of corporation as precluding receipt of benefits under
state unemployment compensation provisions, 23 A.L.R.5th 176.

18 C.J.S. Corporations §§ 122 to 183.

53-11-15.1. Shares held for account.

    If the articles of incorporation or the bylaws so provide, the board of directors may
adopt by resolution a procedure whereby a shareholder of the corporation may certify in
writing to the corporation that all or a portion of the shares registered in the name of
such shareholder are held for the account of a specified person or persons. The
resolution shall set forth:

    A. the classification of shareholder who may certify;

    B. the purpose or purposes for which the certification may be made;

    C. the form of certification and information to be contained therein;

    D. if the certification is with respect to a record date or closing of the stock transfer
books within which the certification must be received by the corporation; and

    E. such other provisions with respect to the procedure as are deemed necessary or
desirable. Upon receipt by the corporation of a certification complying with the
procedure, the persons specified in the certification shall be deemed, for the purpose or
purposes set forth in the certification, to be the holders of record of the number of
shares specified in place of the shareholder making the certification.

History: 1978 Comp., § 53-11-15.1, enacted by Laws 1983, ch. 304, § 27.

53-11-16. Issuance of shares of preferred or special classes in
series.

    A. If the articles of incorporation so provide, the shares of any preferred or special
class may be divided into and issued in series. If the shares of any such class are to be
issued in series, then each series shall be so designated as to distinguish the shares
thereof from the shares of all other series and classes. Any or all of the series of any
such class and the variations in the relative rights and preferences as between different
series may be fixed and determined by the articles of incorporation, but all shares of the
same class shall be identical except as to the following relative rights and preferences,
as to which there may be variations between different series:

         (1) the rate of dividend;

         (2) whether shares may be redeemed and, if so, the redemption price and the
terms and conditions of redemption;

         (3) the amount payable upon shares in event of voluntary and involuntary
liquidation;

         (4) sinking fund provisions, if any, for the redemption or purchase of shares;

         (5) the terms and conditions, if any, on which shares may be converted; and

         (6) voting rights, if any.

    B. If the articles of incorporation expressly vest authority in the board of directors,
then to the extent that the articles of incorporation have not established series and fixed
and determined the variations in the relative rights and preferences as between series,
the board of directors may divide any or all of such classes into series and, within the
limitations set forth in this section and in the articles of incorporation, fix and determine
the relative rights and preferences of the shares of any series so established.

    C. In order for the board of directors to establish a series, where authority to do so is
contained in the articles of incorporation, the board of directors shall adopt a resolution
setting forth the designation of the series and fixing and determining the relative rights
and preferences thereof, or so much thereof as are not fixed and determined by the
articles of incorporation.
    D. Prior to the issue of any shares of a series established by resolution adopted by
the board of directors, the corporation shall file in the office of the commission [secretary
of state] a statement setting forth:

         (1) the name of the corporation;

         (2) a copy of the resolution establishing and designating the series, and fixing
and determining the relative rights and preferences thereof;

         (3) the date of adoption of the resolution; and

         (4) that the resolution was duly adopted by the board of directors.

    E. An original of the statement and a copy, which may be a photocopy of the
original after it was signed or a photocopy that is conformed to the original, shall be
executed by an authorized officer of the corporation and shall be delivered to the
commission [secretary of state]. If the commission [secretary of state] finds that the
statement conforms to law, it shall, when all fees have been paid:

         (1) endorse on the original and copy the word "filed", and the month, day and
year of the filing thereof;

         (2) file the original in its office; and

         (3) return the copy to the corporation or its representative.

    F. Upon the filing of such statement by the commission [secretary of state], the
resolution establishing and designating the series and fixing and determining the
relative rights and preferences thereof shall become effective and constitute an
amendment of the articles of incorporation.

History: 1953 Comp., § 51-24-15, enacted by Laws 1967, ch. 81, § 15; 1975, ch. 64, §
6; 1983, ch. 304, § 28; 2003, ch. 318, § 32.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.
Compiler's notes. -- This section is derived from Section 16 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, rewrote Subsection E; substituted "the
original and copy" for "each of the duplicate originals" in Paragraph E(1); substituted
"the original" for "one of the duplicate originals" in Paragraph E(2); substituted "copy" for
"other duplicate original" in Paragraph E(3).

The 1983 amendment, effective June 17, 1983, deleted "franchise taxes and"
preceding "fees" in the last sentence of the introductory language of Subsection E.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporations Act," see 6 N.M.L. Rev. 57 (1975).

53-11-17. Subscriptions for shares.

    A subscription for shares of a corporation to be organized shall be irrevocable for a
period of six months, unless otherwise provided by the terms of the subscription
agreement or unless all of the subscribers consent to the revocation of the subscription.
Unless otherwise provided in the subscription agreement, subscriptions for shares,
whether made before or after the organization of a corporation, shall be paid in full at
such time, or in such installments and at such times, as determined by the board of
directors. Any call made by the board of directors for payment on subscriptions shall be
uniform as to all shares of the same class or as to all shares of the same series, as the
case may be. In case of default in the payment of any installment or call when the
payment is due, the corporation may proceed to collect the amount due in the same
manner as any debt due the corporation. The bylaws may prescribe other penalties for
failure to pay installments or calls that may become due, but no penalty working a
forfeiture of a subscription, or of the amounts paid thereon, shall be declared as against
any subscriber unless the amount due thereon remains unpaid for a period of thirty days
after written demand has been made therefor. If mailed, the written demand shall be
deemed to be made when deposited in the United States mail in a sealed envelope
addressed to the subscriber at his last post-office address known to the corporation,
with postage thereon prepaid. In the event of the sale of any shares by reason of any
forfeiture, the excess of proceeds realized over the amount due and unpaid on the
shares shall be paid to the delinquent subscriber or to his legal representative.

History: 1953 Comp., § 51-24-16, enacted by Laws 1967, ch. 81, § 16.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 17 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 578 to
581, 583.
Shares of corporate stock as subject of execution or attachment, 1 A.L.R. 653.

Bona fide holder of negotiable paper given in payment of a subscription to corporate
stock in violation of law, 4 A.L.R. 1330.

Liability upon stock subscription payable in services which are rendered unnecessary by
the insolvency of corporation, or other cause, 6 A.L.R. 277.

Right of creditor of insolvent corporation to sue stockholder at law upon unpaid
subscription, 7 A.L.R. 100.

Liability on unpaid subscription, of transferees of stock issued in exchange for property
or services at an overvaluation, 12 A.L.R. 449.

Liability to creditors of stockholders whose stock is forfeited or sold for nonpayment of
assessments, 19 A.L.R. 1096.

Payment of stock subscriptions in good will, 24 A.L.R. 1285.

Constructive notice to purchaser or pledgee of stock of corporation's lien thereon, 33
A.L.R. 1272.

When does statute of limitations begin to run against an action by, or in behalf of,
creditors of a corporation on unpaid stock or subscriptions, 35 A.L.R. 832.

Pledgee's right to allowance for assessments paid on pledged stock, 40 A.L.R. 268.

Insolvency of corporation as barring stockholder's right to rescind subscription on
ground of fraud, 41 A.L.R. 674, 46 A.L.R. 484.

Liability of transferor for calls or assessments as affected by insolvency, fraud, or
illegality in transfer, 45 A.L.R. 99, 86 A.L.R. 57.

Liability of transferor for calls or assessments, as affected by failure to enter transfer of
stock on corporate books, 45 A.L.R. 137, 104 A.L.R. 638.

Binding effect of subscription to stock in corporation to be formed, 61 A.L.R. 1463.

Who may enforce subscription to stock in corporation to be formed, 61 A.L.R. 1504.

Informality of meeting of directors at which assessment was made as affecting its
validity, 64 A.L.R. 714.

Infant's rights and liability on subscription to or purchase of corporate stock, 64 A.L.R.
972.
Liability under trust-fund doctrine of subscribers to stock of corporation the charter of
which has been canceled for reasons other than insolvency, 71 A.L.R. 103, 90 A.L.R.
1350.

Necessity and sufficiency of notice of withdrawal of subscription to stock in projected
corporation, 71 A.L.R. 1345.

Necessity for knowledge of falsity of representation as to value, inducing subscription to
or purchase of corporate stock, or other securities, 73 A.L.R. 1120.

Construction, application, and effect of statutes giving corporation a lien on shares of its
stockholders for debts due from stockholders to corporation, 80 A.L.R. 1338.

Validity and effect of extrinsic agreement absolving one, in whole or in part, from liability
on subscription to corporate stock, 81 A.L.R. 198.

Priority as between lien of corporation and rights of pledgee or bona fide purchaser of
corporate stock, 81 A.L.R. 989.

Exclusiveness of statutory remedy of sale or forfeiture of stock to enforce liability for
assessment, 83 A.L.R. 898.

Validity of release, cancelation, or compromise of unpaid subscription for stock by
corporation or its representatives, 101 A.L.R. 231.

Constitutionality, construction, and application of statutes which forbid or otherwise
regulate compensation for organizing corporation, procuring subscription for stock, or
selling its securities, 115 A.L.R. 1362.

Situs of corporate stock (or stock in joint stock company) for purpose of attachment,
garnishment, or execution, 122 A.L.R. 338.

Implied obligation of purchaser of corporate stock to indemnify a vendor against future
calls and assessments, 141 A.L.R. 1351.

Constitutional or statutory provisions prohibiting municipalities or other subdivisions of
the state from subscribing to, or acquiring stock of, private corporation, 152 A.L.R. 495.

Enforcement of stock subscription after suit on note of subscriber is barred by statute of
limitations, 11 A.L.R.2d 1380.

18 C.J.S. Corporations §§ 184 to 216.

53-11-18. Issuance of shares.
    A. Subject to any restrictions in the articles of incorporation, shares may be issued
for such consideration as shall be authorized by the board of directors establishing a
price (in money or other consideration) or a minimum price or general formula or
method by which the price will be determined.

    B. Upon authorization by the board of directors, the corporation may issue its own
shares in exchange for or in conversion of its outstanding shares, or distribute its own
shares, pro rata to its shareholders or the shareholders of one or more classes or
series, to effectuate stock dividends or splits, and any such transaction shall not require
consideration; provided, that no such issuance of shares of any class or series shall be
made to the holders of shares of any other class or series unless it is either expressly
provided for in the articles of incorporation, or is authorized by an affirmative vote or the
written consent of the holders of at least a majority of the outstanding shares of the
class or series in which the distribution is to be made.

History: 1953 Comp., § 51-24-17, enacted by Laws 1967, ch. 81, § 17; 1975, ch. 64, §
7; 1983, ch. 304, § 29.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 18 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, rewrote this section to the extent that a
detailed comparison would be impracticable.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporations Act," see 6 N.M.L. Rev. 57 (1975).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253 (1987).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations § 494.

Corporate stock without par value, 19 A.L.R. 131, 36 A.L.R. 791, 45 A.L.R. 1501, 65
A.L.R. 1347.

18 C.J.S. Corporations §§ 129 to 143.

53-11-19. Payment for shares.

    A. The board of directors may authorize shares to be issued for consideration
consisting of tangible or intangible property or benefit to the corporation, including cash,
promissory notes, services performed, contracts for services to be performed or other
securities of the corporation.

    B. Before the corporation issues shares, the board of directors shall determine that
the consideration received or to be received for shares to be issued is adequate. That
determination by the board of directors is conclusive insofar as the adequacy of
consideration for the issuance of shares relates to whether the shares are validly
issued, fully paid and nonassessable.

    C. When the corporation receives the consideration for which the board of directors
authorized the issuance of shares, the shares issued therefor are fully paid and
nonassessable.

    D. The corporation may place in escrow shares issued for a contract for future
services or benefits or a promissory note, or make other arrangements to restrict the
transfer of the shares, and may credit distributions in respect of the shares against their
purchase price, until the services are performed, the note is paid or the benefits
received. If the services are not performed, the note is not paid or the benefits are not
received, the shares escrowed or restricted and the distributions credited may be
canceled in whole or part.

History: 1978 Comp., § 53-11-19, enacted by Laws 2001, ch. 200, § 45.

                                               ANNOTATIONS

Repeals and reenactments. -- Laws 2001, ch. 200, § 45 repealed 53-11-19 NMSA
1978, as amended by Laws 1983, ch. 304, § 30, and enacted a new section, effective
July 1, 2001.

Compiler's notes. -- This section is derived from Section 19 of the ABA Model
Business Corporation Act.

Stock sales to employees subject to Blue Sky Law. -- Sales of corporate stock,
either for cash or on credit, to employees of the issuing corporation, are subject to the
registration provisions of the Blue Sky Law (now Sections 58-13C-101 to 58-13C-701
NMSA 1978). 1959 Op. Att'y Gen. No. 59-49 (rendered under prior law).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations § 20; 18A
Am. Jur. 2d Corporations §§ 494 to 508.

Bona fide holder of negotiable paper given in payment of a subscription to corporate
stock in violation of law, 4 A.L.R. 1330.

Payment of stock subscriptions in good will, 24 A.L.R. 1285.
Pledge of unissued stock to secure payment of debt as within prohibition against issuing
stock or bonds except for money paid, labor done, or property actually received, 51
A.L.R. 1134.

Right of corporation itself, in absence of fraud against it, to complain that stock issued
as fully paid was based on overvaluation of property, or receipt of less than par value,
56 A.L.R. 396.

Note as consideration for issuance of corporate stock under statute forbidding issuance
of stock except for money paid, property received, etc., 58 A.L.R. 708.

Right of corporation to deny validity of stock issued by it in violation of statutory or
constitutional provisions respecting receipt of consideration, as against subsequent
bona fide purchasers or pledgees for value, 73 A.L.R. 1435.

Statutory requirement respecting payment for stock as applicable to foreign
corporations, 8 A.L.R.2d 1185.

Validity of stock option plan under which selected personnel of corporation may acquire
stock interest therein, 34 A.L.R.2d 852.

Patent rights, copyrights, trademarks, secret processes, formulas, or the like, as
"property" within provisions of law or charter forbidding issuance of corporate stock
except for money paid or property received, 37 A.L.R.2d 913.

Construction and effect of constitutional or statutory provisions precluding issuance of
corporate stock in consideration of promissory notes, 78 A.L.R.2d 834.

18 C.J.S. Corporations §§ 163 to 171.

53-11-20. Stock rights and options.

    Subject to any provisions in respect thereof set forth in its articles of incorporation, a
corporation may create and issue, whether or not in connection with the issuance and
sale of any of its shares or other securities, rights or options entitling the holders thereof
to purchase from the corporation shares of any class or classes. Such rights or options
shall be evidenced in the manner approved by the board of directors and, subject to the
provisions of the articles of incorporation, shall set forth the terms upon which, the time
or times within which and the price or prices at which the shares may be purchased
from the corporation upon the exercise of any such right or option. In the absence of
fraud in the transaction, the judgment of the board of directors as to the adequacy of the
consideration received for the rights or options is conclusive.

History: 1953 Comp., § 51-24-19, enacted by Laws 1967, ch. 81, § 19; 1975, ch. 64, §
9; 1983, ch. 304, § 31; 2001, ch. 200, § 46.
                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 20 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, deleted the former third sentence, which
read "Unless otherwise provided in the articles of incorporation, if the rights or options
have been or are to be issued to directors, officers or employees as such of the
corporation or of any subsidiary thereof, and not to the shareholders generally, their
issuance shall be approved or ratified by the affirmative vote of the holders of a majority
of the shares entitled to vote thereon or shall be authorized by and consistent with a
plan approved or ratified by such a vote of shareholders.".

The 1983 amendment, effective June 17, 1983, inserted "Unless otherwise provided in
the articles of incorporation," at the beginning of the third sentence, inserted "have been
or" near the beginning of the third sentence, inserted "or ratified" near the middle of the
third sentence, and deleted the former last sentence, which read "The price or prices to
be received for any shares having a par value, other than treasury shares to be issued
upon the exercise of such rights or options, shall not be less than the par value thereof."

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1957
to 1983.

18 C.J.S. Corporations § 122 et seq.

53-11-21. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1983, ch. 304, § 73, repealed 53-11-21 NMSA 1978, as enacted by
Laws 1967, ch. 81, § 20, relating to determination of the amount of stated capital,
effective June 17, 1983.

53-11-22. Expenses of organization, reorganization and financing.

    The reasonable charges and expenses of organization or reorganization of a
corporation, and the reasonable expenses of and compensation for the sale or
underwriting of its shares, may be paid or allowed by the corporation, either out of the
consideration received by it in payment for its shares, or by issuance of its shares,
without thereby rendering the shares not fully paid.

History: 1953 Comp., § 51-24-21, enacted by Laws 1967, ch. 81, § 21; 1983, ch. 304, §
32.

                                               ANNOTATIONS
Compiler's notes. -- This section is derived from Section 22 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, deleted "or assessable" at the end of
the section.

53-11-23. Shares represented by certificates and uncertificated
shares.

    A. The shares of a corporation shall be represented by certificates or shall be
uncertificated shares. Certificates shall be signed by the chairman or vice chairman of
the board of directors or the president or a vice president and by the treasurer or an
assistant treasurer, the secretary or an assistant secretary of the corporation, and may
be sealed with the seal of the corporation or a facsimile thereof. Any or all of the
signatures upon a certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon the
certificate ceases to be an officer, transfer agent or registrar before the certificate is
issued, it may be issued by the corporation with the same effect as if he were an officer,
transfer agent or registrar at the date of its issue.

    B. Every certificate representing shares issued by a corporation which is authorized
to issue shares of more than one class shall set forth upon the face or back of the
certificate, or shall state that the corporation will furnish to any shareholder upon
request and without charge, a full statement of the designations, preferences, limitations
and relative rights of the shares of each class authorized to be issued, and if the
corporation is authorized to issue any preferred or special class in series, the variations
in the relative rights and preferences between the shares of each series so far as the
same have been fixed and determined and the authority of the board of directors to fix
and determine the relative rights and preferences of subsequent series.

    C. Each certificate representing shares shall state upon its face:

         (1) that the corporation is organized under the laws of this state;

         (2) the name of the person to whom issued; and

         (3) the number and class of shares, and the designation of the series, if any,
which the certificate represents.

    D. No certificate shall be issued for any share until the consideration established for
its issuance is fully paid.

    E. Unless otherwise provided by the articles of incorporation or bylaws, the board of
directors of a corporation may provide by resolution that some or all of any or all classes
and series of its shares shall be uncertificated shares, provided that such resolution
shall not apply to shares represented by a certificate until such certificate is surrendered
to the corporation. Within a reasonable time after the issuance or transfer of
uncertificated shares, the corporation shall send to the registered owner thereof a
written notice containing the information required to be set forth or stated on certificates
pursuant to Paragraphs (2) and (3) of Subsection C of this section. Except as otherwise
expressly provided by law, the rights and obligations of the holders of uncertificated
shares and the rights and obligations of the holders of certificates representing shares
of the same class and series shall be identical.

History: 1953 Comp., § 51-24-22, enacted by Laws 1967, ch. 81, § 22; 1975, ch. 64, §
10; 1983, ch. 304, § 33.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 23 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, substituted the present catchline for
"Certificates representing shares"; rewrote the former first two sentences of Subsection
A as the present first three sentences, adding provisions for uncertificated shares and
for signing by the treasurer or assistant treasurer and deleting language which provided
for facsimile signatures if the certificate is manually signed on behalf of a transfer agent
or a registrar other than the corporation or its employee; inserted "transfer agent or
registrar" in three places in the last sentence of Subsection A; substituted "the same" for
"they" near the end of Subsection B; deleted former Paragraph (4) of Subsection C,
which read "the par value of each share represented by the certificate, or a statement
that the shares are without par value"; substituted "the consideration established for its
issuance" for "such share" in Subsection D; and added Subsection E; and made other
minor changes.

Law reviews. -- For article, "1983 Amendments to the New Mexico Business
Corporation Act and Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 487,
488, 490.

Corporate stock or certificate thereof as subject of conversion, 21 A.L.R. 390, 83 A.L.R.
1199.

Certificate of stock as conclusive and exclusive evidence of stockholder's rights, 31
A.L.R. 1326.

Corporation's delivery of stock certificate to stockholder as prerequisite of its issuance to
him, 16 A.L.R.3d 1015.

Measure of damages for conversion of corporate stock or certificate, 31 A.L.R.3d 1286.
18 C.J.S. Corporations §§ 172 to 176.

53-11-24. Fractional shares.

    A. A corporation may:

         (1) issue fractions of a share, either represented by a certificate or
uncertificated;

         (2) arrange for the disposition of fractional interests by those entitled thereto;

         (3) pay in money the fair value of fractions of a share as of the time when
those entitled to receive such fractions are determined; or

         (4) issue scrip in registered or bearer form which shall entitle the holder to
receive a certificate for a full share or an uncertificated full share upon the surrender of
such scrip aggregating a full share.

    B. A certificate for a fractional share or an uncertificated fractional share shall, but
scrip shall not unless otherwise provided therein, entitle the holder to exercise voting
rights, to receive dividends thereon and to participate in any of the assets of the
corporation in the event of liquidation. The board of directors may cause scrip to be
issued subject to the condition that it shall become void if not exchanged for certificates
representing full shares or uncertificated full shares before a specified date, or subject
to the condition that the shares for which the scrip is exchangeable may be sold by the
corporation and the proceeds thereof distributed to the holders of the scrip, or subject to
any other conditions which the board of directors may deem advisable.

History: 1953 Comp., § 51-24-23, enacted by Laws 1967, ch. 81, § 23; 1975, ch. 64, §
11; 1983, ch. 304, § 34.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 24 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, inserted "either represented by a
certificate or uncertificated" in Paragraph (1) of Subsection A, substituted "money" for
"cash" in Paragraph (3) of Subsection A, inserted "or an uncertificated full share" in
Paragraph (4) of Subsection A, and inserted "or an uncertificated fractional share" in the
first and second sentences of Subsection B.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporations Act," see 6 N.M.L. Rev. 57 (1975).
For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations § 1022.

53-11-25. Liability of subscribers and shareholders.

    A. A holder of or subscriber to shares of a corporation shall be under no obligation
to the corporation or its creditors with respect to the shares other than the obligation to
pay to the corporation the full consideration for which the shares were issued or to be
issued.

    B. No person who becomes an assignee or transferee of shares or of a subscription
for shares in good faith and without knowledge or notice that the full consideration
therefor has not been paid shall be personally liable to the corporation or its creditors for
any unpaid portion of the consideration. No executor, administrator, conservator,
guardian, custodian, trustee, assignee for the benefit of creditors or receiver shall be
personally liable to the corporation as a holder of, or subscriber to, shares of a
corporation but the estate and funds in his hands shall be so liable. No pledgee or other
holder of shares as collateral security shall be personally liable as a shareholder.

History: 1953 Comp., § 51-24-24, enacted by Laws 1967, ch. 81, § 24.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 25 of the ABA Model
Business Corporation Act.

Piercing the corporate veil. -- A corporation will ordinarily be treated as a legal entity
separate from its shareholders, and individual shareholders cannot be held personally
liable for the corporation's debt. Under certain circumstances, however, courts may
exercise their equitable powers to pierce the corporate veil and require shareholders to
answer for the corporation's liability. To pierce the corporate veil, the district court must
find that the corporation was operated in a fashion not to serve the valid goals and
purposes of that corporation but instead under the domination and control and for the
purposes of some dominant party, that there is some form of moral culpability
attributable to the shareholder such as use of the corporation to perpetrate a fraud, and
that there is some reasonable relationship between the injury suffered by the plaintiff
and the actions of the defendant. Morrissey v. Krystopowicz, 2016-NMCA-011.

Where defendant set up corporations to own and operate a number of nursing homes in
New Mexico, and where defendant channeled millions of dollars from the revenues of
the nursing homes to an account controlled by defendant, from which hundreds of
thousands of dollars in distributions were made to defendant and a co-owner of the
corporation, evidence that defendant exercised improper domination of the
corporations, that defendant used the corporations for improper purposes, and that
defendant's abuse of the corporate form resulted in a sham corporation leading to
plaintiff's inability to recover for her injury, was sufficient to pierce the corporate veil of
the sham corporations such that defendant can be held liable for the corporations'
liabilities. Morrissey v. Krystopowicz, 2016-NMCA-011.

Law reviews. -- Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253
(1987).

For note, "Legal Malpractice - Membership in a Professional Corporation Does Not
Confer upon an Attorney-Shareholder a Limitation on Personal Liability for Attorney's
Breach of Duty: Sanders, Bruin, Coll & Worley, P.A. v. McKay Oil Corp.," see 31 N.M.L.
Rev. 637 (2001).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations §§ 42, 45;
18A Am. Jur. 2d Corporations §§ 186 to 188, 249 to 257, 850, 852, 865 to 877.

Liability of one whose name appears upon corporate books as a stockholder without his
consent, 3 A.L.R. 1049.

Liability upon stock subscription payable in services which are rendered unnecessary by
the insolvency of corporation, or other cause, 6 A.L.R. 277.

Right of subscriber to defeat liability on ground of failure to comply with statutory
requirement of payment at time of subscribing, 6 A.L.R. 1116.

Right of creditor of insolvent corporation to sue stockholder at law upon unpaid
subscription, 7 A.L.R. 100.

Creditor's knowledge that stock is unpaid as affecting stockholder's liability, 7 A.L.R.
972, 69 A.L.R. 881.

Unauthorized change in name, personal liability of officers or stockholders for debts of
corporation making, 8 A.L.R. 583.

Liability of transferees on unpaid subscription to stock issued in exchange for property
or services at an overvaluation, 12 A.L.R. 449.

Forfeiture of stock for nonpayment of assessments as affecting liability to creditors of
stockholder, 19 A.L.R. 1096.

Enforcement during liquidation or receivership, of unpaid stock subscriptions, to
equalize loss among stockholders, 35 A.L.R. 493.

Reorganization, consolidation, or merger of corporation as affecting liability on stock
subscription, 45 A.L.R. 1031, 89 A.L.R. 770, 154 A.L.R. 427.
Liability of stockholder as affected by business of corporation being turned over to an
officer of the court or other persons, 55 A.L.R. 327.

Right of stockholders contributing to make good losses to be reimbursed by, or out of
assets of, corporation, 55 A.L.R. 794.

Effect of stockholder's bankruptcy upon his liability as stockholder, 62 A.L.R. 988.

Liability under trust fund doctrine, of subscribers to stock of corporation the charter of
which has been canceled for reasons other than insolvency, 71 A.L.R. 103, 90 A.L.R.
1350.

Right of person who has paid corporation's indebtedness to be subrogated to creditors'
right to enforce stockholders' statutory liability, 78 A.L.R. 611.

Death of stockholder as affecting statutory added liability, 79 A.L.R. 1537, 96 A.L.R.
1466.

Validity and effect of agreement absolving one, in whole or in part, from liability on
subscription to corporate stock, 81 A.L.R. 198.

Liability as shareholder of pledgee of stock, 82 A.L.R. 565.

Assignment or sale of stockholders' statutory liability, 82 A.L.R. 1285, 159 A.L.R. 1114.

Added liability of holders of corporate stock the issue of which was ultra vires, invalid, or
irregular, 86 A.L.R. 816.

Fraudulent conveyance or transfer by stockholder as regards his liability as stockholder
to creditors of corporation, 89 A.L.R. 751.

Liability on stock standing in name of one as trustee or in other fiduciary capacity, 91
A.L.R. 257, 97 A.L.R. 1250, 117 A.L.R. 655.

Change in or renewal of corporation's obligation as affecting liability of stockholder of
bank or other corporation, 97 A.L.R. 630.

Setoff of liability of stockholder of insolvent corporation against corporation's debt to
him, 98 A.L.R. 647.

Life interest and remainder in corporate stock as affecting stockholder's statutory
liability, 99 A.L.R. 505.

Liability of officers, directors or members of defectively organized corporation to one of
their number for advancements or commissions, 115 A.L.R. 658.
Promise by stockholder to pay debt of corporation, 35 A.L.R.2d 906.

Reduction of capital stock and distribution of capital assets upon reduction, 35 A.L.R.2d
1149.

Duty and liability of closely held corporation, its directors, officers, or majority
stockholders, in acquiring stock of minority shareholder, 7 A.L.R.3d 500.

18 C.J.S. Corporations §§ 414 to 432.

53-11-26. Shareholders' preemptive rights.

    Except to the extent limited or denied by this section or by the articles of
incorporation, shareholders shall have a preemptive right to acquire authorized but
unissued shares, or securities convertible into such shares or carrying a right to
subscribe to or acquire shares. Unless otherwise provided in the articles of
incorporation:

    A. holders of shares of any class that is preferred or limited as to dividends or
assets shall not be entitled to any preemptive right;

    B. holders of shares of common stock shall not be entitled to any preemptive right to
shares of any class that is preferred or limited as to dividends or assets or to any
obligations, unless convertible into shares of common stock or carrying a right to
subscribe to or acquire shares of common stock;

    C. holders of common stock without voting power shall have no preemptive right to
shares of common stock with voting power; and

    D. the preemptive right shall be only an opportunity to acquire shares or other
securities under such terms and conditions as the board of directors may fix for the
purpose of providing a fair and reasonable opportunity for the exercise of such right.

History: 1953 Comp., § 51-24-25, enacted by Laws 1975, ch. 64, § 12; 1983, ch. 304, §
35.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived in part from Section 26 of ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, substituted "authorized but unissued"
for "unissued or treasury" preceding "shares" in the first sentence of the introductory
language.
Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporations Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 525 to
539.

18 C.J.S. Corporations § 133.

53-11-27. Bylaws.

    The initial bylaws of a corporation shall be adopted by its board of directors. The
power to alter, amend or repeal the bylaws or adopt new bylaws shall be vested in the
board of directors unless reserved to the shareholders by the articles of incorporation.
The bylaws may contain any provisions for the regulation and management of the
affairs of the corporation not inconsistent with law or the articles of incorporation.

History: 1953 Comp., § 51-24-26, enacted by Laws 1967, ch. 81, § 26.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 27 of the ABA Model
Business Corporation Act.

Modification of bylaws. -- The action of the board of directors in entering into
employment contract modified in its legal effect all inconsistent bylaws and prevails over
them. Jennings v. Ruidoso Racing Ass'n, 1968-NMSC-081, 79 N.M. 144, 441 P.2d 42.

Unless contrary bylaw adopted by shareholders. -- Even if the bylaws could be
interpreted to prohibit employment of a comptroller prior to the annual election of
directors, absent a contrary bylaw adopted by the stockholders, the directors have
power to make or amend the bylaws and a silent record as to any such stockholders'
action amounts to failure of the corporation to maintain their burden of showing a lack of
authority in the directors to enact or amend the bylaw. Jennings v. Ruidoso Racing
Ass'n, 1968-NMSC-081, 79 N.M. 144, 441 P.2d 42.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporations Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations §§ 17, 18;
18A Am. Jur. 2d Corporations §§ 310 to 332.

President's power to employ, control, or discharge agents or subordinates, as affected
by bylaws, 5 A.L.R. 1492.
Stockholder's right to inspect books and records of corporation as affected by bylaws,
22 A.L.R. 32, 43 A.L.R. 783, 59 A.L.R. 1373, 80 A.L.R. 1502, 174 A.L.R. 262, 15
A.L.R.2d 11.

Enforceability of invalid corporate bylaw as contract, 59 A.L.R. 290.

Power to remove officers or directors as affected by bylaws, 63 A.L.R. 779.

Validity of bylaw restricting transfer of stock, 65 A.L.R. 1159, 61 A.L.R.2d 1318.

Validity and construction of corporate articles or bylaws relating to stock held by one
retiring from corporate office or employment, 66 A.L.R. 1295.

Provision of articles, bylaws, or agreement regarding future determination by parties
other than owner of price at which corporate stock is to be taken over by corporation or
stockholders upon specified event, 117 A.L.R. 1359.

Removal of officer, agent, or employee at any time, bylaw authorizing, as affecting
contract of employment for specified period, 145 A.L.R. 312.

Enforceability of invalid corporate bylaw as contract, 159 A.L.R. 290.

Provision of statute, charter, or bylaws respecting amendment of corporate bylaws as
excluding waiver thereof, 169 A.L.R. 1374.

Construction and application of provisions of articles, bylaws, statutes, or agreements
restricting alienation or transfer of corporate stock, 2 A.L.R.2d 745.

Power of president of corporation to have litigation instituted by it where board of
directors has failed or refused to grant permission, 10 A.L.R.2d 701.

Conflict of laws as to validity and effect of corporate bylaws, 27 A.L.R.2d 435.

Construction and effect of corporate articles, charter, or bylaws limiting duration or
maturity of its indebtedness, 55 A.L.R.2d 949.

Construction and effect of corporate bylaws or articles relating to change in number of
directors, 3 A.L.R.3d 623.

18 C.J.S. Corporations §§ 111 to 121.

53-11-28. Meetings of shareholders.

    A. Meetings of shareholders may be held at any place within or without this state in
accordance with the bylaws. If no other place is designated in, or fixed in accordance
with, the bylaws, meetings shall be held at the principal place of business of the
corporation.

    B. An annual meeting of the shareholders shall be held at the time designated in or
fixed in accordance with the bylaws. If the annual meeting is not held within any
thirteen-month period, the district court may, on the application of any shareholder,
order a meeting to be held.

    C. Special meetings of the shareholders may be called by the board of directors, the
holders of not less than one-tenth of all the shares entitled to vote at the meeting or
such other persons as may be authorized in the articles of incorporation or the bylaws.

History: 1953 Comp., § 51-24-27, enacted by Laws 1967, ch. 81, § 27; 1975, ch. 64, §
13; 2001, ch. 200, § 47.

                                               ANNOTATIONS

Special shareholder meeting was effective to remove board member. -- Where
majority shareholder of debtor corporation, who was also a director and president of the
corporation, called a special shareholder's meeting for the express purpose of voting on
the election of new officers and the removal of current officers or directors, and where at
the shareholders' meeting the only other director of the corporation was removed as a
director, officer and employee of the corporation, the special meeting of the
shareholders was effective to remove the director of the corporation despite the
corporation's bylaws not allowing a reduction in the number of directors to have the
effect of shortening the term of an incumbent director, because this section authorizes a
shareholder with at least 10% voting interest to call a special shareholder's meeting,
and in this case the removal of the director merely created a vacancy, it did not
decrease the number of directorships which would have resulted in the shortening of the
term of an incumbent director. In re Sandia Tobacco Mfrs., Inc., 571 B.R. 449 (2017).

Compiler's notes. -- This section is derived from Section 28 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, substituted "principal place of business"
for "registered office" in Subsection A.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 948 to
962; 18B Am. Jur. 2d Corporations §§ 1365 to 1367, 1436.

Time for regular meeting of stockholders, power of directors to change, 2 A.L.R. 558, 8
A.L.R. 678.
Informality of meeting of stockholders as affecting action taken thereat, 51 A.L.R. 941.

Admissibility of oral evidence as to proceedings at meetings of stockholders or
directors, 66 A.L.R. 1328, 48 A.L.R.2d 1259.

Remedies to restrain or compel holding of stockholders' meetings, 48 A.L.R.2d 615.

18 C.J.S. Corporations §§ 362 to 396.

53-11-29. Notice of shareholders' meetings.

    Written notice stating the place, day and hour of the meeting and, in case of a
special meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten nor more than fifty days before the date of the meeting,
either personally or by mail, at the direction of the president, the secretary or the officer
or persons calling the meeting, to each shareholder of record entitled to vote at the
meeting. If mailed, the notice shall be deemed to be delivered when deposited in the
United States mail addressed to the shareholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid. Attendance of a
shareholder in person or by proxy at a meeting constitutes a waiver of notice of the
meeting, except where a shareholder attends a meeting for the express purpose of
objecting to the transaction of any business because the meeting is not lawfully called
or convened.

History: 1953 Comp., § 51-24-28, enacted by Laws 1967, ch. 81, § 28.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 29 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 963 to
985; 18B Am. Jur. 2d Corporations §§ 1368 to 1370, 1436.

18 C.J.S. Corporations §§ 365 to 367.

53-11-30. Closing of transfer books and fixing record date.

    For the purpose of determining shareholders entitled to notice of, or to vote at, any
meeting of shareholders or any adjournment thereof, or entitled to receive payment of
any dividend, or in order to make a determination of shareholders for any other proper
purpose, the board of directors of a corporation may provide that the stock transfer
books shall be closed for a stated period not to exceed fifty days. If the stock transfer
books are closed for the purpose of determining shareholders entitled to notice of, or to
vote at, a meeting of shareholders, the books shall be closed for at least ten days
immediately preceding the meeting. In lieu of closing the stock transfer books, the
bylaws, or in the absence of an applicable bylaw, the board of directors may fix in
advance a date as the record date for any such determination of shareholders, the date
to be not more than fifty days and, in case of a meeting of shareholders, not less than
ten days prior to the date on which the particular action, requiring such determination of
shareholders, is to be taken. If the stock transfer books are not closed and no record
date is fixed for the determination of shareholders entitled to notice of, or to vote at, a
meeting of shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the resolution of the
board of directors declaring the dividend is adopted, as the case may be, shall be the
record date for the determination of shareholders. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this section, the determination shall apply to any adjournment thereof.

History: 1953 Comp., § 51-24-29, enacted by Laws 1967, ch. 81, § 29.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 30 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- Transfer on corporate books as
sufficient for gift of stock, 6 A.L.R.4th 250.

53-11-31. Voting list.

    The officer or agent having charge of the stock transfer books for shares of a
corporation shall make, at least ten days before each meeting of shareholders, a
complete list of the shareholders entitled to vote at the meeting or any adjournment
thereof, arranged in alphabetical order, with the address of, and the number of shares
held by, each, which list, for a period of ten days prior to the meeting, shall be kept on
file at the registered office of the corporation and shall be subject to inspection by any
shareholder at any time during usual business hours. The list shall also be produced
and kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the shareholders entitled to
examine the list or transfer books or to vote at any meeting of shareholders. Failure to
comply with the requirements of this section does not affect the validity of any action
taken at the meeting. An officer or agent having charge of the stock transfer books who
fails to prepare the list of shareholders, or keep it on file for a period of ten days, or
produce and keep it open for inspection at the meeting, as provided in this section is
liable to any shareholder suffering damage on account of the failure, to the extent of the
damage.

History: 1953 Comp., § 51-24-30, enacted by Laws 1967, ch. 81, § 30.

                                               ANNOTATIONS
Compiler's notes. -- This section is derived from Section 31 of the ABA Model
Business Corporation Act.

Omission of names of eligible voters. -- In a shareholder election for a corporation's
board of directors, the votes reflecting Class B shares of stock should have been
counted in the candidates' totals, even though the voting list, prepared before the
election, did not list the Class B shares and their owners. The Class B shareholders,
who were entitled to vote by law, should not have been disenfranchised by another's
misfeasance or malfeasance. Pena v. Westland Dev. Co., 1988-NMCA-052, 107 N.M.
560, 761 P.2d 438.

53-11-32. Quorum of shareholders.

    Unless otherwise provided in the articles of incorporation, a majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a quorum at a
meeting of shareholders, but in no event shall a quorum consist of less than one-third of
the shares entitled to vote at the meeting. A quorum, once attained at a meeting, shall
be deemed to continue until adjournment notwithstanding the voluntary withdrawal of
enough shares to leave less than a quorum. If a quorum is present, the affirmative vote
of the majority of the shares represented at the meeting and entitled to vote on the
subject matter shall be the act of the shareholders, unless the vote of a greater number
or voting by classes is required by the Business Corporation Act or the articles of
incorporation.

History: 1953 Comp., § 51-24-31, enacted by Laws 1967, ch. 81, § 31.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 32 of the ABA Model
Business Corporation Act.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 993 to
998; 18B Am. Jur. 2d Corporations § 1372.

Stockholders required for quorum or vote as determined by number of shares, 63 A.L.R.
1106.

18 C.J.S. Corporations § 370.

53-11-33. Voting of shares.

    A. Each outstanding share, regardless of class, shall be entitled to one vote on each
matter submitted to a vote at a meeting of shareholders, except as otherwise provided
in the articles of incorporation. If the articles of incorporation provide for more or less
than one vote for any share, on any matter, every reference in the Business Corporation
Act to a majority or other proportion of shares shall refer to such a majority or other
proportion of votes entitled to be cast. The articles of incorporation may grant, either
absolutely or conditionally to the holders of bonds, debentures or other obligations of
the corporation the power to vote on specified matters, including the election of
directors, and this right shall not be terminated except upon written assent of the
holders of a majority in aggregate face amount of the bonds or debentures.

    B. Shares held by another corporation, domestic or foreign, if a majority of the
shares entitled to vote for the election of directors of the other corporation is held by the
corporation, shall not be voted at any meeting or counted in determining the total
number of outstanding shares at any given time.

    C. The articles of incorporation may provide that at each election for directors every
shareholder entitled to vote at the election has the right to vote, in person or by proxy,
the number of shares owned by him for as many persons as there are directors to be
elected and for whose election he has a right to vote, or to cumulate his votes by giving
one candidate as many votes as the number of such directors multiplied by the number
of his shares shall equal, or by distributing such votes on the same principle among any
number of the candidates. A statement in the articles of incorporation that cumulative
voting exists is sufficient to confer such right.

    D. Shares standing in the name of another corporation, domestic or foreign, may be
voted by the officer, agent or proxy as the bylaws of the other corporation may
prescribe, or, in the absence of such provisions, as the board of directors of the other
corporation may determine.

    E. Shares held by an administrator, executor, guardian or conservator may be voted
by him, either in person or by proxy, without a transfer of the shares into his name.
Shares standing in the name of a trustee, or a custodian for a minor, may be voted by
him, either in person or by proxy, but only after a transfer of the shares into his name.

    F. A shareholder may vote either in person or by proxy executed in writing by the
shareholder or by his duly authorized attorney in fact. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise provided in the proxy.

    G. Shares standing in the name of a receiver or bankruptcy trustee may be voted by
the receiver or bankruptcy trustee, and shares held by or under the control of a receiver
or bankruptcy trustee may be voted by him without the transfer thereof into his name if
authority so to do is contained in an appropriate order of the court by which the receiver
or bankruptcy trustee was appointed.

    H. A shareholder whose shares are pledged may vote the shares until the shares
have been transferred into the name of the pledgee, and thereafter the pledgee may
vote the shares so transferred.
    I. Shares standing in the name of a partnership may be voted by any partner, and
shares standing in the name of a limited partnership may be voted by any general
partner.

    J. Shares standing in the name of a person as life tenant may be voted by him,
either in person or by proxy.

    K. From the date on which written notice of redemption of redeemable shares has
been mailed to the holders thereof and a sum sufficient to redeem the shares has been
deposited with a bank or trust company with irrevocable instruction and authority to pay
the redemption price to the holders thereof upon surrender of certificates therefor, the
shares shall not be entitled to vote on any matter and shall not be deemed to be
outstanding shares.

    L. Without limiting the manner in which a shareholder may authorize another person
or persons to act for the shareholder as proxy pursuant to Subsection F of this section,
the following shall constitute valid means by which a shareholder may grant that
authority:

         (1) a shareholder may execute a writing authorizing another person or
persons to act for that shareholder as proxy, and execution may be by the shareholder
or the shareholder's authorized officer, director, employee or agent signing the writing or
causing the person's signature to be affixed to the writing by any reasonable means,
including by facsimile signature;

         (2) a shareholder may authorize another person or persons to act for that
shareholder as proxy by transmitting or authorizing the transmission of a telegram,
cablegram, facsimile transmission, email or other means of electronic transmission to
the person who will be the holder of the proxy or to a proxy solicitation firm, proxy
support service organization or like agent duly authorized by the person who will be the
holder of the proxy to receive the transmission; provided that the electronic transmission
shall either set forth, or be submitted with information from which it can be determined,
that the electronic transmission was authorized by the shareholder. If it is determined
that an electronic transmission is valid, the inspector, or if there is no inspector, the
person making that determination, shall specify the information upon which he relied.

    M. A copy, facsimile telecommunication or other reliable reproduction of the writing
or transmission created pursuant to Subsection L of this section may be substituted or
used in lieu of the original writing or transmission for any purpose for which the original
writing or transmission could be used, if that copy, facsimile telecommunication or other
reproduction is a complete reproduction of the entire original writing or transmission.

History: 1953 Comp., § 51-24-32, enacted by Laws 1967, ch. 81, § 32; 1975, ch. 64, §
14; 1983, ch. 304, § 36; 2001, ch. 200, § 48.

                                               ANNOTATIONS
Compiler's notes. -- This section is derived from Section 33 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, added Subsections L and M.

The 1983 amendment, effective June 17, 1983, deleted "Neither treasury shares, nor"
at the beginning of Subsection B, inserted "not" near the end of Subsection B, and
substituted "provisions" for "provision" in Subsection D.

Voting list omitting names of eligible voters. -- In a shareholder election for a
corporation's board of directors, the votes reflecting Class B shares of stock should
have been counted in the candidates' totals, even though the voting list, prepared
before the election, did not list the Class B shares and their owners. The Class B
shareholders, who were entitled to vote by law, should not have been disenfranchised
by another's misfeasance or malfeasance. In addition, 53-11-31 NMSA 1978, which
specifies voting list requirements, provides in part: "Failure to comply with the
requirements of this section does not affect the validity of any action taken at the
[shareholders'] meeting". Pena v. Westland Dev. Co., 1988-NMCA-052, 107 N.M. 560,
761 P.2d 438.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M. L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations § 24; 18A
Am. Jur. 2d Corporations §§ 1015 to 1102; 18B Am. Jur. 2d Corporations §§ 1384 to
1394.

Validity and effect of provisions in will to control voting power of corporate stock, 9
A.L.R. 1242, 17 A.L.R. 238.

Reconsideration of vote in stockholder's or director's meeting, 13 A.L.R. 131.

Right to issue stock without voting power, 21 A.L.R. 643.

Waiver of right to object to voting of invalid or unauthorized stock, 72 A.L.R. 948.

Voting power of corporation stock as confined to issued and outstanding stock to
exclusion of authorized unissued stock or stock which has been reacquired by the
corporation, 90 A.L.R. 315.

Construction and application of provisions of statute, charter, bylaws, or stock certificate
conferring upon holders of preferred or other specified class of stock a right to vote in
event of nonpayment of dividends or other specified conditions, 154 A.L.R. 418.

Revocability of proxy to vote stock, 159 A.L.R. 307.
Cumulative voting of stock for corporate directors, 43 A.L.R.2d 1322.

Agreement controlling the vote of corporate stock, 45 A.L.R.2d 799.

Expenses incurred by competing factions within corporation in soliciting proxies as
charge against corporation, 51 A.L.R.2d 873.

Proxies provision of Federal Securities Exchange Act, § 14 (U.S.C., Tit. 15, § 78n), 55
A.L.R.2d 1126.

Voting of jointly held or fractional share in corporation, 98 A.L.R.2d 357.

Validity of proxy agreement for control of voting power of corporate stock, 98 A.L.R.2d
376.

Who may exercise voting power of corporate stock pending settlement of estate of
deceased owner, 7 A.L.R.3d 629.

Casting ballots after closing of polls, 41 A.L.R.3d 234.

Misrepresentation in proxy solicitation - state cases, 20 A.L.R.4th 1287.

Relief other than by dissolution in cases of intracorporate deadlock or dissension, 34
A.L.R.4th 13.

18 C.J.S. Corporations §§ 375 to 394.

53-11-34. Voting trusts and agreements among shareholders.

    A. Any number of shareholders of a corporation may create a voting trust for the
purpose of conferring upon a trustee or trustees the right to vote or otherwise represent
their shares, for a period not to exceed ten years, by entering into a written voting trust
agreement specifying the terms and conditions of the voting trust, by depositing a
counterpart of the agreement with the corporation at its registered office, and by
transferring their shares to the trustee or trustees for the purposes of the agreement.
The trustee or trustees shall keep a record of the holders of voting trust certificates
evidencing a beneficial interest in the voting trust, giving the names and addresses of all
such holders and the number and class of the shares in respect of which the voting trust
certificates held by each are issued, and shall deposit a copy of such record with the
corporation at its registered office. Failure to keep or deposit the record as required by
this subsection does not affect the validity of the agreement or any action taken
pursuant to it. Any trustee or trustees who fail to keep or deposit the record as required
is liable to any holder of a voting trust certificate suffering damage on account of the
failure to the extent of the damage. The counterpart of the voting trust agreement
deposited with the corporation shall be subject to the same right of examination by a
shareholder of the corporation, in person or by agent or attorney, as are the books and
records of the corporation, and shall be subject to examination by any holder of record
of voting trust certificates, either in person or by agent or attorney, at any reasonable
time for any proper purpose.

    B. Agreements among shareholders regarding the voting of their shares, which
agreements are not voting trusts or purported voting trusts, shall not be subject to the
provisions of Subsection A of this section and shall be valid and specifically
enforceable.

History: 1953 Comp., § 51-24-33, enacted by Laws 1967, ch. 81, § 33; 1975, ch. 64, §
15.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 34 of the ABA Model
Business Corporation Act.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations § 24; 18A
Am. Jur. 2d Corporations §§ 1112 to 1158, 1387.

Powers of voting trustees, 159 A.L.R. 1067.

Transfer of beneficiary's interest, validity of provision of voting trust against, 11 A.L.R.2d
1000.

Removal of trustee of voting trust, 34 A.L.R.2d 1136.

Agreement controlling the vote of corporate stock, 45 A.L.R.2d 799.

Validity of voting trusts or other similar agreement for control of voting power of
corporate stock, 98 A.L.R.2d 376.

Validity of voting trust created by will, 77 A.L.R.4th 1194.

18 C.J.S. Corporations §§ 380 to 382.

53-11-35. Board of directors.

    A. All corporate powers shall be exercised by or under authority of, and the
business and affairs of a corporation shall be managed under the direction of, a board
of directors except as may be otherwise provided in the Business Corporation Act or the
articles of incorporation. If any such provision is made in the articles of incorporation,
the powers and duties conferred or imposed upon the board of directors by the
Business Corporation Act shall be exercised or performed to such extent and by such
person or persons as provided in the articles of incorporation. Directors need not be
residents of this state or shareholders of the corporation unless the articles of
incorporation or bylaws so require. The articles of incorporation or bylaws may prescribe
other qualifications for directors. The board of directors may fix the compensation of
directors unless otherwise provided in the articles of incorporation.

    B. A director shall perform his duties as a director, including his duties as a member
of any committee of the board upon which the director may serve, in good faith, in a
manner the director believes to be in or not opposed to the best interests of the
corporation, and with such care as an ordinarily prudent person would use under similar
circumstances in a like position. In performing such duties, a director shall be entitled to
rely on factual information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or presented by:

         (1) one or more officers or employees of the corporation whom the director
reasonably believes to be reliable and competent in the matters presented;

         (2) counsel, public accountants or other persons as to matters which the
director reasonably believes to be within such person's professional or expert
competence; or

         (3) a committee of the board upon which the director does not serve, duly
designated in accordance with a provision of the articles of incorporation or the bylaws,
as to matters within its designated authority, which committee the director reasonably
believes to merit confidence, but the director shall not be considered to be acting in
good faith if the director has knowledge concerning the matter in question that would
cause such reliance to be unwarranted. A person who so performs such duties shall
have no liability by reason of being or having been a director of the corporation.

    C. A director of a corporation who is present at a meeting of its board of directors at
which action on any corporate matter is taken shall be presumed to have assented to
the action taken unless the director's dissent shall be entered in the minutes of the
meeting or unless the director shall file written dissent to such action with the secretary
of the meeting before the adjournment thereof or shall forward such dissent by
registered mail to the secretary of the corporation immediately after the adjournment of
the meeting. Such right to dissent shall not apply to a director who voted in favor of such
action.

    D. For purposes of Subsection B of this section, a director, in determining what he
reasonably believes to be in or not opposed to the best interests of the corporation,
shall consider the interests of the corporation's shareholders and, in his discretion, may
consider any of the following:

         (1) the interests of the corporation's employees, suppliers, creditors and
customers;
         (2) the economy of the state and nation;

         (3) the impact of any action upon the communities in or near which the
corporation's facilities or operations are located; and

         (4) the long-term interests of the corporation and its shareholders, including
the possibility that those interests may be best served by the continued independence
of the corporation.

History: 1953 Comp., § 51-24-34, enacted by Laws 1967, ch. 81, § 34; 1975, ch. 64, §
16; 1983, ch. 304, § 37; 1987, ch. 238, § 10.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 35 of the ABA Model
Business Corporation Act.

The 1987 amendment, effective April 9, 1987, inserted "or not opposed to" in
Subsection B, made minor stylistic changes in that subsection, and added Subsection
D.

The 1983 amendment, effective June 17, 1983, designated the existing provisions as
Subsection A, added "All corporate powers shall be exercised by or under authority of,
and" at the beginning of the first sentence of Subsection A, substituted "under the
direction of" for "by," and inserted "the Business Corporation Act or" in the first sentence
of Subsection A, and added Subsections B and C.

Standard of conduct for corporate governance. -- This section defines the basic
standard of conduct for corporate governance. Federal Deposit Insurance Corp. v. Dee,
222 F.Supp.3d 972 (D.N.M. 2016).

Common-law business judgment rule does not abrogate this section. -- The
common-law business judgment rule, which creates a presumption that in making a
business decision the directors and officers of a corporation acted on an informed basis,
in good faith, and in honest belief that the action taken was in the best interests of the
company, compliments rather than abrogates Subsection B of this section, and
consequently, directors must comply with Subsection B to obtain the business judgment
rule's protections. Conversely, if a director violates Subsection B of this section, then
the New Mexico common law business judgment rule does not apply. Federal Deposit
Insurance Corp. v. Dee, 222 F.Supp.3d 972 (D.N.M. 2016).

Directors and officers of failed bank were not entitled to the protections of this
section or the common law business judgment rule. -- Where the federal deposit
insurance corporation (FDIC) brought an action in federal district court, as a receiver for
a failed bank (first community bank), against bank's officers and directors, alleging
claims based on defendant's alleged conduct in ignoring appropriate credit-risk
management practices and deviating from first community bank loan policies and
procedures, defendant's motion to dismiss was denied because FDIC's amended
complaint included sufficient factual allegations that the directors and officers did not act
with such care as an ordinarily prudent person would use under similar circumstances in
a like position, individually, and in their capacity as first community directors, and that
defendants were not entitled to the protections of the business judgment rule. Federal
Deposit Insurance Corp. v. Dee, 222 F.Supp.3d 972 (D.N.M. 2016).

Law reviews. -- For article, "The New Mexico Professional Corporation," see 9 Nat.
Res. J. 591 (1969).

For article, "1975 Amendments to the New Mexico Business Corporation Act," see 6
N.M.L. Rev. 57 (1975).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1341
to 1364, 1381, 1395, 1396, 1399, 1483, 1484, 1486.

Duty of director to disclose lien or claim against property on which corporation or
association lends money, 3 A.L.R. 1058.

Power of directors to sell, without consent of stockholders, property of corporation, 5
A.L.R. 930, 60 A.L.R. 1210.

Maintenance of designated person in office, contract of director or stockholder for, 12
A.L.R. 1070, 45 A.L.R. 795.

Court's right to interfere with amount of salaries voted to officers of private corporations
by directors, 27 A.L.R. 300, 44 A.L.R. 570.

Character or ability as a qualification of membership of board of trustees or directors, 30
A.L.R. 248.

Fixing wages or salaries of working stockholders above those current for similar
services, 48 A.L.R. 508.

Right of stockholder, director, officer, or agent to engage in similar or competing
business, 64 A.L.R. 782.

Responsibility of corporation for misstatements by officer or employee to induce or
influence purchase of stock, 66 A.L.R. 1450.

Power of other officers to fix compensation of officers, 72 A.L.R. 238.
Purchase by officer or director in his own interest at a judicial or other public sale of the
corporate property, 76 A.L.R. 439.

Implied or ostensible authority of officer or employee of private corporation to take or
negotiate leaseholds for corporation or its subsidiaries, 107 A.L.R. 996.

Eligibility as corporate director of one who was not stockholder in fact, or not
stockholder of record, at time of election, but who afterwards became such, 130 A.L.R.
156.

Authority of directors to employ attorney for corporation, 130 A.L.R. 897.

Right of stockholder as individual to complain as against officers, directors, or large
stockholders, of their transactions in corporation's outstanding stock involving its control
or other purpose, 132 A.L.R. 260.

Validity, construction, and effect of statute or corporate regulation requiring deposit of
stock of corporation as condition of qualification of director, 148 A.L.R. 1164.

Attorneys' fees and other expenses incident to controversy respecting internal affairs of
corporation as charge against the corporation, 152 A.L.R. 909, 39 A.L.R.2d 580.

Purchase of claims against corporation by officer or director, 13 A.L.R.2d 1172.

Validity of contract between corporations as affected by directors or officers in common,
33 A.L.R.2d 1060.

Authority of corporate officers to mortgage or pledge corporate personal property, 62
A.L.R.2d 712.

Validity of stockholders' agreement allegedly infringing in directors' management
powers - modern cases, 15 A.L.R.4th 1078.

Financial inability of corporation to take advantage of business opportunity as affecting
determination whether "corporate opportunity" was presented, 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of "corporate
opportunity," 16 A.L.R.4th 784.

Fairness to corporation where "corporate opportunity" is allegedly usurped by officer or
director, 17 A.L.R.4th 479.

Duty of corporate directors to exercise "informed" judgment in recommending
responses to merger or tender offers, 46 A.L.R.4th 887.

19 C.J.S. Corporations § 434 et seq.
53-11-36. Number and election of directors.

    The number of directors of a corporation shall consist of one or more members. The
number of directors shall be fixed by, or in the manner provided in, the articles of
incorporation or the bylaws. The number of directors may be increased or decreased
from time to time by amendment to, or in the manner provided in, the articles of
incorporation or the bylaws, but no decrease shall have the effect of shortening the term
of any incumbent director. If the number of directors is not fixed by, or in the manner
provided in, the bylaws or the articles of incorporation, the number shall be the same as
the number of directors constituting the initial board of directors. The names and
addresses of the members of the first board of directors shall be stated in the articles of
incorporation. Such persons shall hold office until the first annual meeting of
shareholders and until their successors have been elected and qualified. At the first
annual meeting of shareholders and at each annual meeting thereafter, the
shareholders shall elect directors to hold office until the next succeeding annual
meeting, except in case of the classification of directors as permitted by the Business
Corporation Act. Each director shall hold office for the term for which the director is
elected and until a successor has been elected and qualified.

History: 1953 Comp., § 51-24-35, enacted by Laws 1967, ch. 81, § 35; 1975, ch. 64, §
17; 2003, ch. 318, § 33.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 36 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, deleted "except as to the number
constituting the initial board of directors, which number shall be fixed by the articles of
incorporation" following "or the bylaws".

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1349
to 1352, 1360, 1362, 1363, 1381, 1395 to 1399.

Construction and effect of corporate bylaws or articles relating to change in number of
directors, 3 A.L.R.3d 623.

19 C.J.S. Corporations § 434 to 442.

53-11-37. Classification of directors.

    When the board of directors consists of two or more members, in lieu of electing the
whole number of directors annually, the articles of incorporation may provide that the
directors be divided into either two or three classes, each class to be as nearly equal in
number as possible, the term of office of directors of the first class to expire at the first
annual meeting of shareholders after their election, that of the second class to expire at
the second annual meeting after their election and that of the third class, if any, to
expire at the third annual meeting after their election. At each annual meeting after the
classification, the number of directors equal to the number of the class whose term
expires at the time of the meeting shall be elected to hold office until the second
succeeding annual meeting, if there are two classes, or until the third succeeding
annual meeting, if there are three classes. No classification of directors shall be
effective prior to the first annual meeting of shareholders.

History: 1953 Comp., § 51-24-36, enacted by Laws 1967, ch. 81, § 36; 2001, ch. 200, §
49.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 37 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, substituted "When the board of directors
consists of two members" for "When the board of directors consists of nine members".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1397,
1398.

53-11-38. Vacancies.

    Any vacancy occurring in the board of directors may be filled by the affirmative vote
of a majority of the remaining directors though less than a quorum of the board of
directors. A director elected to fill a vacancy shall be elected for the unexpired term of
his predecessor in office. Any directorship to be filled by reason of an increase in the
number of directors may be filled by the board of directors for a term of office continuing
only until the next election of directors by the shareholders.

History: 1953 Comp., § 51-24-37, enacted by Laws 1967, ch. 81, § 37; 1975, ch. 64, §
18.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 38 of the ABA Model
Business Corporation Act.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1400,
1401.

Provision authorizing directors to fill vacancies in directorships as applicable to newly
created directorships, 6 A.L.R.2d 174.

19 C.J.S. Corporations § 435.

53-11-39. Removal of directors.

    A. At a meeting of shareholders called expressly for that purpose, directors may be
removed in the manner provided in this section. Except as provided in Subsection D of
this section, a director or the entire board of directors may be removed, with or without
cause, by a vote of the holders of a majority of the shares then entitled to vote at an
election of directors.

    B. In the case of a corporation having cumulative voting, if less than the entire board
is to be removed, no one of the directors may be removed if the votes cast against his
removal would be sufficient to elect him if then cumulatively voted at an election of the
entire board of directors, or, if there are classes of directors, at an election of the class
of directors of which he is a part.

    C. Whenever the holders of the shares of any class are entitled to elect one or more
directors by the provisions of the articles of incorporation, the provisions of this section
apply, in respect to the removal of a director or directors so elected, to the vote of the
holders of the outstanding shares of that class and not to the vote of the outstanding
shares as a whole.

    D. Unless the articles of incorporation provide otherwise, in the case of a
corporation whose board is classified as provided in Section 53-11-37 NMSA 1978,
shareholders may remove directors only for cause.

History: 1953 Comp., § 51-24-38, enacted by Laws 1967, ch. 81, § 38; 1975, ch. 64, §
19; 2001, ch. 200, § 50.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 39 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, inserted "Except as provided in
Subsection D of this section," in the second sentence of Subsection A; and added
Subsection D.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1427
to 1444.

Directors' power to remove officers or fellow directors, 63 A.L.R. 776.

Removal by court of director or officer of private corporation, 124 A.L.R. 364.

19 C.J.S. Corporations §§ 454 to 457.

53-11-40. Quorum of directors.

    A majority of the number of directors as fixed pursuant to Section 53-11-36 NMSA
1978 shall constitute a quorum for the transaction of business unless a greater number
is required by the articles of incorporation or the bylaws. A quorum, once attained at a
meeting, shall be deemed to continue until adjournment notwithstanding the voluntary
withdrawal of enough directors to leave less than a quorum. The act of the majority of
the directors present at a meeting at which a quorum is present shall be the act of the
board of directors, unless the act of a greater number is required by the articles of
incorporation or the bylaws.

History: 1953 Comp., § 51-24-39, enacted by Laws 1967, ch. 81, § 39; 1975, ch. 64, §
20.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 40 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1470
to 1474.

19 C.J.S. Corporations § 438.

53-11-40.1. Director conflict of interest.

    A. A conflict of interest transaction is a transaction with the corporation in which a
director of the corporation has a direct or indirect interest. A conflict of interest
transaction is not voidable by the corporation solely because of the director's interest in
the transaction if any one of the following is true:

         (1) the material facts of the transaction and the director's interest were
disclosed or known to the board of directors or a committee of the board of directors
and the board of directors or committee authorized, approved or ratified the transaction;
         (2) the material facts of the transaction and the director's interest were
disclosed or known to the shareholders entitled to vote and they authorized, approved
or ratified the transaction; or

         (3) the transaction was fair to the corporation.

    B. For purposes of this section, a director of the corporation has an indirect interest
in a transaction if:

         (1) another entity in which he has a material financial interest or in which he is
a general partner is a party to the transaction; or

         (2) another entity of which he is a director, officer or trustee is a party to the
transaction and the transaction is or should be considered by the board of directors of
the corporation.

    For purposes of this section, a director of the corporation does not have a direct or
indirect interest in a transaction solely because the transaction may involve or effect a
change in control of the corporation or his continuation in office as a director of that
corporation.

    C. For purposes of Paragraph (1) of Subsection A of this section, a conflict of
interest transaction is authorized, approved or ratified if it receives the affirmative vote of
a majority of the directors on the board or [of] directors or on a committee of the board
of directors who have no direct or indirect interest in the transaction but a transaction
may not be authorized, approved or ratified under this section by a single director. If a
majority of the directors who have no direct or indirect interest in the transaction vote to
authorize, approve or ratify the transaction, a quorum is present for the purpose of
taking action under this section. The presence of or a vote cast by a director with a
direct or indirect interest in the transaction does not affect the validity of any action
taken under Paragraph (1) of Subsection A of this section if the transaction is otherwise
authorized, approved or ratified as provided in that subsection.

    D. For purposes of Paragraph (2) of Subsection A of this section, a conflict of
interest transaction is authorized, approved or ratified if it receives the vote of a majority
of the shares entitled to be counted under this subsection. Shares owned by or voted
under the control of a director who has a direct or indirect interest in the transaction and
shares owned by or voted under the control of an entity described in Paragraph (2) of
Subsection B of this section may not be counted in a vote of shareholders to determine
whether to authorize, approve or ratify a conflict of interest transaction under Paragraph
(2) of Subsection A of this section. The vote of those shares, however, is counted in
determining whether the transaction is approved under other sections of the Business
Corporation Act. A majority of the shares, whether or not present, that are entitled to be
counted in a vote on the transaction under this subsection constitutes a quorum for the
purpose of taking action under this section.
History: 1978 Comp., § 53-11-40.1, enacted by Laws 1987, ch. 238, § 11.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material in Subsection C was inserted by the
compiler and is not part of the law.

53-11-41. Executive and other committees.

    If the articles of incorporation or the bylaws so provide, the board of directors, by
resolution adopted by a majority of the full board of directors, may designate from
among its members an executive committee and one or more other committees each of
which, to the extent provided in the resolution or in the articles of incorporation or the
bylaws of the corporation, shall have and may exercise all the authority of the board of
directors, except that no such committee shall have authority to:

    A. declare dividends or authorize distributions;

    B. approve or recommend to shareholders actions or proposals required by this act
to be approved by shareholders;

    C. designate candidates for the office of director, for purposes of proxy solicitation
or otherwise, or fill vacancies on the board of directors or any committee thereof;

    D. amend the bylaws;

    E. approve a plan of merger not requiring shareholder approval;

    F. authorize or approve the reacquisition of shares unless pursuant to general
formula or method specified by the board of directors; or

    G. authorize or approve the issuance or sale of, or any contract to issue or sell,
shares or designate the terms of a series of a class of shares, provided that the board of
directors, having acted regarding general authorization for the issuance or sale of
shares, or any contract therefor, and, in the case of a series, the designation thereof,
may, pursuant to a general formula or method specified by the board of resolution or by
adoption of a stock option or other plan, authorize a committee to fix the terms of any
contract for the sale of the shares and to fix the terms upon which such shares may be
issued or sold, including, without limitation, the price, the dividend rate, provisions for
redemption, sinking fund, conversion, voting or preferential rights, and provisions for
other features of a class of shares, or a series of a class of shares, with full power in
such committee to adopt any final resolution setting forth all the terms thereof and to
authorize the statement of the terms of a series for filing with the commission [secretary
of state] under this act. Neither the designation of any such committee, the delegation
thereto of authority nor action by such committee pursuant to such authority shall alone
constitute compliance by any member of the board of directors, not a member of the
committee in question, with the director's responsibility to act in good faith, in a manner
the director reasonably believes to be in the best interests of the corporation, and with
such care as an ordinarily prudent person in a like position would use under similar
circumstances.

History: 1953 Comp., § 51-24-40, enacted by Laws 1967, ch. 81, § 40; 1983, ch. 304, §
38.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 42 of the ABA Model
Business Corporation Act.

The term, "this act," referred to in Subsections B and G, means Laws 1983, ch. 304,
which amended various sections in Chapter 53, including this section.

The 1983 amendment, effective June 17, 1983, rewrote this section to the extent that a
detailed comparison would be impracticable.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1507,
1508, 1510 to 1512, 1519, 1520.

19 C.J.S. Corporations §§ 473, 474.

53-11-42. Place and notice of directors' meetings; committee
meetings.

    Meetings of the board of directors, regular or special, or any committee designated
thereby, may be held either within or without this state. Regular meetings of the board of
directors or any committee designated thereby may be held with or without notice as
prescribed in the bylaws. Special meetings of the board of directors or any committee
designated thereby shall be held upon the notice prescribed in the bylaws. Attendance
of a director at a meeting constitutes a waiver of notice of the meeting, except where a
director attends a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any regular or special meeting of the board of
directors or any committee designated thereby need be specified in the notice or waiver
of notice of the meeting unless required by the bylaws. Except as otherwise restricted
by the articles of incorporation or bylaws, members of the board of directors or any
committee designated thereby may participate in a meeting of the board or committee
by means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting.

History: 1953 Comp., § 51-24-41, enacted by Laws 1967, ch. 81, § 41; 1975, ch. 64, §
21.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 43 of the ABA Model
Business Corporation Act.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1446
to 1450, 1464 to 1466, 1475.

Informality of meeting of directors as affecting action taken thereat, 64 A.L.R. 712.

Admissibility of oral evidence as to proceedings at meetings of stockholders or
directors, 66 A.L.R. 1328, 48 A.L.R.2d 1259.

19 C.J.S. Corporations §§ 463, 474.

53-11-43. Action by directors without a meeting.

    Unless otherwise provided by the articles of incorporation or bylaws, any action
required by the Business Corporation Act to be taken at a meeting of the directors of a
corporation, or any action which may be taken at a meeting of the directors or of a
committee, may be taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the directors, or all of the members of the
committee, as the case may be. The consent shall have the same effect as a
unanimous vote.

History: 1953 Comp., § 51-24-42, enacted by Laws 1967, ch. 81, § 42.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 44 of the ABA Model
Business Corporation Act.
53-11-44. Distributions to shareholders.

    A. Subject to any restrictions in the articles of incorporation, the board of directors
may authorize and the corporation may make distributions, except that no distribution
may be made if, after giving effect thereto, either:

         (1) the corporation would be unable to pay its debts as they become due in
the usual course of its business; or

         (2) the corporation's total assets would be less than the sum of its total
liabilities and (unless the articles of incorporation otherwise permit) the maximum
amount that then would be payable, in any liquidation, in respect of all outstanding
shares having preferential rights in liquidation.

    B. Determinations under Paragraph (2) of Subsection A of this section may be
based upon:

         (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 in the circumstances.

    C. In the case of a purchase, redemption or other acquisition of a corporation's
shares, the effect of a distribution shall be measured as of the date money or other
property is transferred or debt is incurred by the corporation, or as of the date the
shareholder ceases to be a shareholder of the corporation with respect to such shares,
whichever is earlier. In all other cases, the effect of a distribution shall be measured as
of the date of its authorization, or as of the date of payment if payment occurs more
than one hundred twenty days following the date of authorization.

    D. Indebtedness of a corporation incurred or issued to a shareholder in a distribution
in accordance with this section shall be on a parity with the indebtedness of the
corporation to its general unsecured creditors except to the extent subordinated by
agreement.

    E. In circumstances to which this section and related sections of the Business
Corporation Act are applicable, such provisions supersede the applicability of any other
statutes of this state with respect to the legality of distributions.

History: 1978 Comp., § 53-11-44, enacted by Laws 1983, ch. 304, § 39.

                                               ANNOTATIONS

Repeals and reenactments. -- Laws 1983, ch. 304, § 39, repealed former 53-11-44
NMSA 1978, relating to dividends, and enacted the above section.
Change in accounting method. -- Where accounting procedures uniformly followed
by corporation were those in effect at the time of the purchase and sale of stock for
several years prior thereto, and where such accounting methods were acceptable to the
taxing authorities, and where there was no suggestion that there was any fraud or
absence of good faith on the part of the corporation in their accounting practice
followed, a different method of accounting from that in use over the years should not
have been applied in determining the availability of surplus, for to do so would be to
open the door to exactly what was intended to be prevented by 51-3-17, 1953 Comp.
(now repealed). Through adoption of different accounting methods from those used over
the years, it would be just as easy to create a profit or surplus as by a revaluation of
assets, and neither is to be condoned. Woodson v. Lee, 1963-NMSC-187, 73 N.M. 425,
389 P.2d 196 (decided under former law).

Agreement to distribute regardless of surplus or net profit. -- Any agreement to
distribute funds or assets of a corporation to stockholders regardless of surplus or net
profit would be in violation of 51-3-17, 1953 Comp. (now repealed), and accordingly
void. Woodson v. Lee, 1963-NMSC-187, 73 N.M. 425, 389 P.2d 196 (decided under
former law).

Agreement to distribute only when "income shall be for distribution". -- Under an
agreement whereby owners of reserved right to oil and gas income from the corporate
lands agreed to eliminate the reservation and participate in oil and gas income which
corporation received for distribution to stockholders, and where contract stipulated that
owners would receive a distribution only when "income shall be for distribution to the
stockholders," such a situation could occur only when surplus or net profits were
present, and therefore agreement did not violate 51-3-17, 1953 Comp. (now repealed).
Woodson v. Lee, 1963-NMSC-187, 73 N.M. 425, 389 P.2d 196 (decided under former
law).

Law reviews. -- For article, "1983 Amendments to the New Mexico Business
Corporation Act and Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1168
to 1203.

Dividends on preferred stock, 6 A.L.R. 802, 67 A.L.R. 765, 98 A.L.R. 1526, 133 A.L.R.
653.

Guaranteeing future price of, or dividends on, corporate stock as contrary to public
policy, 24 A.L.R. 986.

Right or duty of corporation to pay dividends and liability for wrongful payment, 55
A.L.R. 8, 76 A.L.R. 885, 109 A.L.R. 1381.

Right as between seller and purchaser of stock to dividends declared thereon, 60 A.L.R.
703.
Right of pledgee of stock in respect of dividends, 67 A.L.R. 485, 103 A.L.R. 849.

Failure of purchaser of stock from existing corporation, or of subscriber thereto, to pay
for same as affecting his right to dividends, 122 A.L.R. 1048.

Right as between life beneficiaries and remaindermen in corporate dividends or
distributions during the life interest, 130 A.L.R. 492, 44 A.L.R.2d 1277.

Right of bankrupt's creditors in unclaimed dividends, 4 A.L.R.2d 1435.

Validity of cancellation of accrued dividends on preferred corporate stock, 8 A.L.R.2d
893.

Overpayments of dividends on preferred stock as deductible in payment of dividends for
later years, 10 A.L.R.2d 241.

Parties defendant to stockholder's suit to compel declaration of dividend, 15 A.L.R.2d
1124.

Remedy for refusal of corporation or its agent to register or effectuate transfer of stock,
22 A.L.R.2d 12.

Preferred stockholders' rights, upon liquidation or dissolution, to dividends, 25 A.L.R.2d
788.

Rights of preferred stockholders as to passed or accumulated dividends in going
concern, 27 A.L.R.2d 1073.

Corporation's right to interplead claimants to dividends, 46 A.L.R.2d 980.

Change in stock or corporate structure, or split or substitution of stock of corporation, as
affecting bequest of stock, 46 A.L.R.3d 7.

18 C.J.S. Corporations §§ 293 to 304.

53-11-45. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1983, ch. 304, § 73, repealed 53-11-45 NMSA 1978, as enacted by
Laws 1967, ch. 81, § 44, relating to distributions from capital surplus, effective June 17,
1983.

53-11-46. Liability of directors in certain cases.
    A. In addition to any other liabilities, a director who votes for or assents to any
distribution contrary to the provisions of the Business Corporation Act or contrary to any
restrictions contained in the articles of incorporation shall, unless the director complies
with the standard provided in the Business Corporation Act for the performance of the
duties of directors, be liable to the corporation, jointly and severally with all other
directors so voting or assenting, for the amount of the dividend which is paid or the
value of the distribution in excess of the amount of the distribution which could have
been made without a violation of the provisions of the Business Corporation Act or the
restrictions in the articles of incorporation.

    B. Any director against whom a claim is asserted under this section for the making
of a distribution and who shall be held liable thereon, shall be entitled to contribution
from the shareholders who accepted or received any such distribution, knowing the
distribution to have been made in violation of the Business Corporation Act, in
proportion to the amounts received by them.

    C. Any director against whom a claim shall be asserted under or pursuant to this
section shall be entitled to contribution from any other director who voted for or
assented to the action upon which the claim is asserted and who did not comply with
the standard provided in the Business Corporation Act for the performance of the duties
of directors.

History: 1953 Comp., § 51-24-45, enacted by Laws 1967, ch. 81, § 45; 1975, ch. 64, §
23; 1983, ch. 304, § 40.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 48 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, redesignated former Paragraph (1) of
Subsection A as present Subsection A; deleted former Paragraphs (2) and (3) of
Subsection A and former Subsections B and C, which concerned the liability of directors
of a corporation who vote for the illegal purchase of its own shares or for the illegal
distribution of assets during liquidation, presumed assent to actions taken by the board
absent express dissent, and presumption of good faith reliance on financial statements;
redesignated former Subsections D and E as present Subsections B and C,
respectively; near the beginning of Subsection A deleted "imposed by law upon
directors of a corporation" following "liabilities" and substituted "a director who votes for
or assents to any distribution" for "directors of a corporation who vote for or assent to
the declaration of any dividend or other distribution of the assets of a corporation to its
shareholders," near the middle of Subsection A inserted "unless the director . . . duties
of directors," deleted "jointly and severally" preceding "liable" and inserted "jointly and
severally with all other directors so voting or assenting," and near the end of Subsection
A substituted "distribution" for "assets which are distributed," deleted "dividend or"
preceding "distribution," and substituted "made" for "paid or distributed"; substituted
"making of a distribution" for "payment of a dividend or other distribution of assets of a
corporation" near the beginning of Subsection B; substituted "distribution, knowing the
distribution" for "dividend or assets, knowing the dividend or distribution" near the
middle of Subsection B; and inserted "or pursuant to" near the beginning of Subsection
C, substituted "any other director" for "the other directors" near the middle of Subsection
C, and added "and who did not . . . the duties of directors" at the end of Subsection C.

Forbidden distributions to stockholders defined. -- It is clear that forbidden
distributions to shareholders out of capital surplus of a corporation of a portion of its
assets, in cash or profits, are those distributions to shareholders of corporate property
paid to the corporation by the shareholders in excess of the capital stock liability, which
would render the corporation insolvent, would deprive preferential shareholders of
accrued dividends to which they were entitled, or would reduce the corporation's assets
below the amount preferential shareholders could claim in the event of involuntary
liquidation. DiIaconi v. New Cal Corp., 1982-NMCA-064, 97 N.M. 782, 643 P.2d 1234.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1684
to 1896.

Laches as affecting right of corporation or its stockholders to relief against directors for
violation of trust, 10 A.L.R. 370.

Liability of directors or officers of corporation for incurring excessive debts, right of
individual creditor to enforce, 43 A.L.R. 1147.

Right of creditor of corporation to maintain, action against directors or officers for
mismanagement, 50 A.L.R. 462.

Judgment in action by or against corporation as res judicata in action by or against
stockholder or officer of corporation, 129 A.L.R. 1041.

Securities Exchange Act provision regarding liability of directors, officers, and principal
stockholders for profits on short-swing speculation in corporation's stock, 40 A.L.R.2d
1346, 67 A.L.R. Fed. 849, 86 A.L.R. Fed. 16.

Duty and liability of closely held corporation, its directors, officers, or majority
stockholders, in acquiring stock of minority shareholder, 7 A.L.R.3d 500.

Liability of corporate directors or officers for negligence in permitting conversion of
property of third persons by corporation, 29 A.L.R.3d 660.
Duty of corporate directors to exercise "informed" judgment in recommending
responses to merger or tender offers, 46 A.L.R.4th 887.

Liability of shareholders, directors, and officers where corporate business is continued
after its dissolution, 72 A.L.R.4th 419.

Liability of corporate director, officer, or employee for tortious interference with
corporation's contract with another, 72 A.L.R.4th 492.

19 C.J.S. Corporations §§ 475 to 553.

53-11-47. Provisions relating to actions by shareholders.

    A. No action shall be brought in this state by a shareholder in the right of a domestic
or foreign corporation unless:

         (1) the plaintiff was a shareholder of record or the beneficial owner of shares
held by a nominee or the holder of voting trust certificates at the time of the transaction
of which he complains, or his shares or his beneficial ownership of shares held by a
nominee or voting trust certificates thereafter devolved upon him by operation of law
from a person who was a holder of record at such time;

         (2) the complaint be verified; and

         (3) the complaint alleges with particularity the efforts, if any, made by the
plaintiff to obtain the action he desires from the directors and the reasons for his failure
to obtain the action or for not making the effort. If the corporation undertakes an
investigation upon receipt of a demand by plaintiff for action, or following
commencement of suit, the court may stay any action commenced as the
circumstances reasonably require.

    B. In any action hereafter instituted in the right of any domestic or foreign
corporation by the person or persons described in the above paragraph, the court
having jurisdiction, upon final judgment and a finding that the action was brought without
reasonable cause, may require the plaintiff or plaintiffs to pay to the parties named as
defendant the reasonable expenses, including fees of attorneys, incurred by them in the
defense of such action.

    C. An action authorized by this section shall not be discontinued, compromised or
settled without approval by the court having jurisdiction of the action. If the court
determines that the interest of the shareholders or of any class thereof will be
substantially affected by the discontinuance, compromise or settlement, the court may
direct that notice, by publication or otherwise, be given to the shareholders or any class
thereof whose interests it determines will be so affected.
History: 1953 Comp., § 51-24-45.1, enacted by Laws 1975, ch. 64, § 24; 1983, ch. 304,
§ 41.

                                               ANNOTATIONS

The 1983 amendment, effective June 17, 1983, added "Provisions relating to" at the
beginning of the catchline; designated part of former Subsection A as present
Paragraph (1) of Subsection A; in Paragraph (1) of Subsection A substituted
"shareholder of record or the beneficial owner of shares held by a nominee or the
holder" for "holder of record of shares or," deleted "therefor" following "voting trust
certificates," and inserted "his beneficial ownership of shares held by a nominee or";
added Paragraphs (2) and (3) of Subsection A; substituted "person or persons
described in the above paragraph" for "holder or holders of record of shares of such
corporation or of voting trust certificates therefor" near the beginning of Subsection B;
and added Subsection C.

Standing to bring individual action. -- Where plaintiffs and defendant were equal
shareholders in a closely held corporation; the corporation purchased residential
property were defendant could reside and run the corporate business; defendant made
all payments on the purchase price of the residential property; the corporation ceased to
operate, but the corporation was not dissolved and the assets were not divided among
the shareholders; defendant, as president of the corporation, executed a deed
conveying the residential property to defendant, and defendant took cash out of the
residential property through the refinancing of the residential property, plaintiffs had
standing to sue defendant individually for a breach of fiduciary duty in the sale of
corporate assets in violation of 53-15-1 NMSA 1978. Clark v. Sims, 2009-NMCA-118,
147 N.M. 252, 219 P.3d 20, cert. denied, 2009-NMCERT-009, 147 N.M. 421, 224 P.3d
648.

A stockholder who directly attacks the fairness or validity of a merger alleges a direct
injury to the stockholders, not the corporation, and has standing to pursue the
shareholder's direct claims. Rael v. Page, 2009-NMCA-123, 147 N.M. 306, 222 P.3d
678, cert. denied, 2009-NMCERT-009, 147 N.M. 421, 224 P.3d 648.

Where plaintiff, who was a shareholder in a corporation that had been merged out of
existence, claimed that the merger was unfair and resulted in an unfair share price paid
to shareholders because the directors of the corporation breached fiduciary duties by
engaging in self-interested negotiations with potential buyers of the corporation,
devaluing the corporation for personal gain, and conducting unfair and misleading
voting processes, plaintiff alleged a direct injury to the shareholders and plaintiff had
standing to pursue plaintiff's direct claims against the directors for damages. Rael v.
Page, 2009-NMCA-123, 147 N.M. 306, 222 P.3d 678, cert. denied, 2009-NMCERT-009,
147 N.M. 421, 224 P.3d 648.

Attorney's fees. -- Where defendant and plaintiffs were equal shareholders in a
closely held corporation and defendant transferred the corporation's sole asset to
defendant and took cash out of the asset through the refinancing of the asset, attorney's
fees were not recoverable by plaintiffs. Clark v. Sims, 2009-NMCA-118, 147 N.M. 252,
219 P.3d 20, cert. denied, 2009-NMCERT-009, 147 N.M. 421, 224 P.3d 648.

Breach of fiduciary duty. -- A fiduciary duty is a duty of utmost good faith, trust,
confidence, and candor owed by a fiduciary such as a corporate officer to a beneficiary
such as a shareholder, and involves a duty to act with the highest degree of honesty
and loyalty toward another person and in the best interests of the other person; a
breach of duties imposed by contract may also constitute a breach of the fiduciary
duties of loyalty, good faith, inherent fairness and the obligation not to profit at the
expense of the corporation. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-
NMCERT-001.

Where appellant shareholder overpaid himself by hundreds of thousands of dollars,
failed to inform other shareholders of bonuses paid to himself without appropriate basis,
controlled the shareholder allocation sheets that the shareholders used to track their
compensation, failed to inform other shareholders of material facts and information
relating to business and financial affairs, knowingly submitted incorrect information
about his bonuses at shareholder meetings, and knowingly and intentionally paid
himself bonuses to the substantial economic detriment of the other shareholders and
the corporation itself, there was sufficient evidence to support the district court's
decision that appellee breached his fiduciary duties. Jones v. Augé, 2015-NMCA-016,
cert. denied, 2015-NMCERT-001.

Punitive damages for breach of fiduciary duties. -- Punitive damages are
appropriate when an actor willfully breaches fiduciary duties; where punitive damages
are requested, it must be determined whether the actor acted with a culpable mental
state. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.

Where appellant shareholder, without the knowledge of other shareholders, modified his
shareholder employment agreement, putting in place a more generous deferred
compensation package than the other shareholders, overpaid himself by hundreds of
thousands of dollars, failed to inform other shareholders of bonuses paid to himself
without appropriate basis, controlled the shareholder allocation sheets that the
shareholders used to track their compensation, failed to inform other shareholders of
material facts and information relating to business and financial affairs, knowingly
submitted incorrect information about his bonuses at shareholder meetings, and
knowingly and intentionally paid himself bonuses to the substantial economic detriment
of the other shareholders and the corporation itself, the award of punitive damages was
appropriate. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.

Contract reformation is a remedy for fraud and may form the basis for an award
of punitive damages. -- Contract reformation is an equitable remedy by which a court
will modify a written agreement to reflect the actual intent of the parties, usually to
correct fraud or mutual mistake in the writing; where a plaintiff has established a cause
of action in equity and the wrongdoer's misconduct is willful, wanton, malicious,
reckless, fraudulent and in bad faith, punitive damages are allowable to do complete
justice. Jones v. Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.

Where appellant shareholder, without the knowledge of other shareholders, modified his
shareholder employment agreement, putting in place a more generous deferred
compensation package than the other shareholders, overpaid himself by hundreds of
thousands of dollars, failed to inform other shareholders of bonuses paid to himself
without appropriate basis, controlled the shareholder allocation sheets that the
shareholders used to track their compensation, failed to inform other shareholders of
material facts and information relating to business and financial affairs, knowingly
submitted incorrect information about his bonuses at shareholder meetings, and
knowingly and intentionally paid himself bonuses to the substantial economic detriment
of the other shareholders and the corporation itself, appellees request to make all the
shareholder agreements equal fell squarely within the definition of the equitable remedy
of contract reformation, and the award of punitive damages was appropriate. Jones v.
Augé, 2015-NMCA-016, cert. denied, 2015-NMCERT-001.

Standing for shareholder action. -- The contemporaneous ownership requirement
also includes a continuous ownership rule, requiring contemporaneous and continuous
ownership of stock throughout the duration of litigation to maintain standing in a
derivative action. White ex rel. Banes Co. Derivative Action v. Banes Co., 1993-NMSC-
078, 116 N.M. 611, 866 P.2d 339.

Subsection B sanction appropriate if action "groundless." -- The phrase "without
reasonable cause" means "groundless", and the subjective standard should be used.
Under this interpretation, for the plaintiff to be sanctioned with attorney's fees, a showing
must be made that he or she subjectively knew at the time the suit was filed that the
complaint was groundless. A "groundless" claim is one in which the allegations in the
complaint are not in good faith discoverable through litigation. White ex rel. Banes Co.
Derivative Action v. Banes Co., 1993-NMSC-078, 116 N.M. 611, 866 P.2d 339.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2243 to
2252, 2272, 2326 to 2352, 2487, 2491, 2495.

Statute of limitations in stockholder's derivative suit against directors or officers, 123
A.L.R. 346.

18 C.J.S. Corporations §§ 397 to 413.

53-11-48. Officers.

    Every corporation organized under the Business Corporation Act shall have officers,
with titles and duties as shall be stated in the bylaws or in a resolution of the board of
directors which is not inconsistent with the bylaws, and as many officers as may be
necessary to enable the corporation to sign instruments and stock certificates required
under the Business Corporation Act. One of the officers shall have the duty to record
the proceedings of the meetings of the members and directors in a book to be kept for
that purpose. All officers and agents of the corporation, as between themselves and the
corporation, shall have the authority and perform the duties in the management of the
corporation as provided in the bylaws or as determined by resolution of the board of
directors not inconsistent with the bylaws.

History: 1953 Comp., § 51-24-46, enacted by Laws 1967, ch. 81, § 46; 1989, ch. 385, §
2.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 50 of the ABA Model
Business Corporation Act.

The 1989 amendment, effective June 16, 1989, substituted the present first and
second sentences for the former first through third sentences, which read: "The officers
of a corporation shall consist of a president, one or more vice presidents as may be
prescribed by the bylaws, a secretary and a treasurer, each of whom shall be elected by
the board of directors at the time and in the manner prescribed by the bylaws. Other
officers and assistant officers and agents deemed necessary may be elected or
appointed by the board of directors or chosen in the manner prescribed by the bylaws.
Any two or more offices may be held by the same person, except the offices of
president and secretary."

Delegation of authority. -- Directors may not only delegate authority to transact
ordinary and routine business, but also authority to transact business requiring the
highest degree of judgment and discretion. Directors cannot, however, delegate entire
supervision and control of the corporation. McKinney v. Gannett Co., 817 F.2d 659
(10th Cir. 1987).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1341
to 1352, 1360 to 1364.

Informality of directors' meetings as affecting election of officers, 64 A.L.R. 716.

Power of president of corporation to have litigation instituted by it where a board of
directors has failed or refused to grant permission, 10 A.L.R.2d 701.

Purchase of claims against corporation by officer thereof, 13 A.L.R.2d 1172.

Right of corporate officer to purchase corporate assets from corporation, 24 A.L.R.2d
71.
Power of corporate officer or agent to hire employees for life, 28 A.L.R.2d 929.

Validity of contract between corporations as affected by directors or officers in common,
33 A.L.R.2d 1060.

Authority of officer to bind corporation as guarantor or surety, 34 A.L.R.2d 290.

Authority of agent to endorse and transfer commercial paper, 37 A.L.R.2d 453.

Power of particular officer or agent of business corporation to bind it by a donation to a
charity or similar institution, 50 A.L.R.2d 447.

Authority of president to subordinate corporation's claim, assignment, lien, or the like, 53
A.L.R.2d 1421.

Authority of corporate officers to mortgage or pledge corporate personal property, 62
A.L.R.2d 712.

Power of secretary or treasurer of corporation to institute litigation, 64 A.L.R.2d 900.

Duty and liability of closely held corporation, its directors, officers, or majority
stockholders, in acquiring stock of minority shareholder, 7 A.L.R.3d 500.

Financial inability of corporation to take advantage of business opportunity as affecting
determination whether "corporate opportunity" was presented, 16 A.L.R.4th 185.

Purchase of shares of corporation by director or officer as usurpation of "corporate
opportunity," 16 A.L.R.4th 784.

Fairness to corporation where "corporate opportunity" is allegedly usurped by officer or
director, 17 A.L.R.4th 479.

Liability of shareholders, directors, and officers where corporate business is continued
after its dissolution, 72 A.L.R.4th 419.

Liability of corporate director, officer, or employee for tortious interference with
corporation's contract with another, 72 A.L.R.4th 492.

19 C.J.S. Corporations §§ 433 to 553.

53-11-49. Removal of officers.

    Any officer or agent may be removed by the board of directors whenever in its
judgment the best interests of the corporation will be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person removed. Election
or appointment of an officer or agent shall not of itself create contract rights.
History: 1953 Comp., § 51-24-47, enacted by Laws 1967, ch. 81, § 47.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 51 of the ABA Model
Business Corporation Act.

Resolution held not to be removal. -- A resolution suspending a newspaper
executive during the period of litigation between him and the newspaper corporation
was not a removal within the meaning of this section. McKinney v. Gannett Co., 660 F.
Supp. 984 (D.N.M. 1981), appeal dismissed, 694 F.2d 1240 (10th Cir. 1982).

Subsequent ratification not curing breach. -- Subsequent ratification by the board of
directors of its removal of an officer in breach of an employment agreement could not
cure the breach. McKinney v. Gannett Co., 660 F. Supp. 984 (D.N.M. 1981), appeal
dismissed, 694 F.2d 1240 (10th Cir. 1982).

Contract rights of person not removed. -- The underlying policy of this section giving
precedence to contract rights implied that a former newspaper owner who sued a
successor newspaper corporation for breach of his contract with the corporation could
maintain his contract rights, even though it was another officer who was removed
without the former owner's permission. McKinney v. Gannett Co., 660 F. Supp. 984
(D.N.M. 1981), appeal dismissed, 694 F.2d 1240 (10th Cir. 1982).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18B Am. Jur. 2d Corporations §§ 1427
to 1444.

Directors' power to remove officers or fellow directors, 63 A.L.R. 776.

Construction, application and effect of statute empowering removal of officer, agent or
employee at pleasure, 111 A.L.R. 894.

Removal by court of director or officer of private corporation, 124 A.L.R. 364.

Bylaw authorizing removal of officer at any time as affecting contract of employment for
specified period, 145 A.L.R. 312.

"Golden parachute" defense to hostile corporate takeover, 66 A.L.R.4th 138.

19 C.J.S. Corporations §§ 454 to 457.

53-11-50. Books and records; financial reports to shareholders;
examination of records.

    A. Each corporation shall keep correct and complete books and records of account
and shall keep minutes of the proceedings of its shareholders and board of directors,
and shall keep at its registered office or principal place of business, or at the office of its
transfer agent or registrar, a record of its shareholders, giving the names and addresses
of all shareholders and the number and class of the shares held by each. Any books,
records and minutes may be in written form or in any other form capable of being
converted into written form within a reasonable time.

    B. Any person who shall have been a holder of record of shares or of voting trust
certificates therefor at least six months immediately preceding his demand or who shall
be the holder of record of, or the holder of record of voting trust certificates for, at least
five percent of all the outstanding shares of the corporation, upon written demand
stating the purpose thereof, may examine, in person, or by agent or attorney, at any
reasonable time or times, for any proper purpose, its relevant books and records of
account, minutes and record of shareholders and make extracts therefrom. Any officer
or agent who, or a corporation which, shall refuse to allow any such shareholder or
holder of voting trust certificates, or his agent or attorney, to examine and make extracts
from its books and records of account, minutes and record of shareholders, for any
proper purpose, shall be liable to the shareholder or holder of voting trust certificates in
a penalty of ten percent of the value of the shares owned by the shareholder, or in
respect of which such voting trust certificates are issued, in addition to any other
damages or remedy afforded him by law. It shall be a defense to any action for
penalties under this section that the person suing therefor has, within two years:

         (1) sold or offered for sale any list of shareholders or of holders of voting trust
certificates for shares of the corporation or any other corporation;

         (2) aided or abetted any person in procuring any list of shareholders or of
holders of voting trust certificates for any such purpose;

         (3) improperly used any information secured through any prior examination of
the books and records of account, or minutes, or records of shareholders or of holders
of voting trust certificates for shares of the corporation or any other corporation; or

         (4) not acted in good faith or for a proper purpose in making his demand.

    C. Nothing in this section shall impair the power of any court of competent
jurisdiction, upon proof by a shareholder or holder of voting trust certificates of proper
purpose, irrespective of the period of time during which the shareholder or holder of
voting trust certificates shall have been a shareholder of record or a holder of record of
voting trust certificates, and irrespective of the number of shares held by him or
represented by voting trust certificates held by him, to compel the production for
examination by the shareholder or holder of voting trust certificates of the books and
records of account, minutes and record of shareholders of a corporation.

    D. Each corporation shall provide its shareholders access to at least a balance
sheet as of the end of each taxable year and a statement of income for such taxable
year, if the corporation prepares such financial statements for such taxable year for any
purpose. Such financial statements may be consolidated statements of the corporation
and one or more of its subsidiaries, but shall not be required to include the statements'
supporting data or information.

History: 1953 Comp., § 51-24-48, enacted by Laws 1967, ch. 81, § 48; 1975, ch. 64, §
25; 1983, ch. 304, § 42.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 52 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, added "Financial reports to
shareholders; examination of records" at the end of the catchline, deleted "has" at the
beginning of Paragraphs (2) and (3) of Subsection B, substituted "not acted" for "was
not acting" at the beginning of Paragraph (4) of Subsection B, and substituted present
Subsection D for former Subsection D, which concerned similar subject matter.

Section is not a limitation or abrogation of the common-law right of inspection
and is sometimes described as an extension or even an enlargement of the right as
recognized under the common law. Schwartzman v. Schwartzman Packing Co., 1983-
NMSC-010, 99 N.M. 436, 659 P.2d 888.

Shareholder's right to examine books and records under this section is not
unlimited. -- The right of examination must be exercised at reasonable and proper
times. Schwartzman v. Schwartzman Packing Co., 1983-NMSC-010, 99 N.M. 436, 659
P.2d 888.

Discretion vested in court to control right of examination. -- A trial court must of
necessity have some discretion in determining when and in what manner the right of
examination should be exercised. Schwartzman v. Schwartzman Packing Co., 1983-
NMSC-010, 99 N.M. 436, 659 P.2d 888.

Imposition of penalty under Subsection B is also within trial court's discretion.
Schwartzman v. Schwartzman Packing Co., 1983-NMSC-010, 99 N.M. 436, 659 P.2d
888.

Members of non-stock, nonprofit corporations have the right to inspect the
corporation's books and records. Schein v. N. Rio Arriba Elec. Coop., Inc., 1997-NMSC-
011, 122 N.M. 800, 932 P.2d 490.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).
Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253 (1987).

For note, "Corporate Law ­ Formulating and Applying a 'Proper Purpose' Analysis to a
Books & Records Inspection Request ­ Schein v. N. Rio Arriba Elec. Coop., Inc.," see
28 N.M.L. Rev. 133 (1998).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 333 to
422.

Jurisdiction of action involving inspection of books of foreign corporation, 18 A.L.R.
1399, 89 A.L.R. 736, 155 A.L.R. 1231, 72 A.L.R.2d 1211.

Stockholder's right to inspect books and records of corporation, 22 A.L.R. 24, 43 A.L.R.
783, 59 A.L.R. 1373, 80 A.L.R. 1502, 174 A.L.R. 262, 15 A.L.R.2d 11.

Creditor's right to inspect books and records under constitutional or statutory provision
relating specifically to corporations, 35 A.L.R. 752.

Power of equity to appoint receiver at instance of stockholder, because of refusal of
officers to permit inspection of books, 43 A.L.R. 977, 46 A.L.R. 976, 62 A.L.R. 411, 77
A.L.R. 861, 98 A.L.R. 1264.

Right of stockholder or creditor to inspect record of corporation in hands of receiver, 92
A.L.R. 1047.

Form, particularity, and manner of designation required in subpoena duces tecum for
production of corporate books, records, and documents, 23 A.L.R.2d 862.

What corporate documents are subject to shareholder's right of inspection, 88 A.L.R.3d
663.

18 C.J.S. Corporations §§ 110, 332 to 338.

53-11-51. Shares held for account.

    A. If the articles of incorporation or the bylaws so provide, the board of directors
may adopt by resolution a procedure whereby a shareholder of the corporation may
certify in writing to the corporation that all or a portion of the shares registered in the
name of such shareholder are held for the account of a specified person or persons.
The resolution shall set forth:

         (1) the types or groups of shareholders who may certify;

         (2) the purpose or purposes for which the certification may be made;

         (3) the form of certification and information to be contained therein;
         (4) the deadline, if any, within which the certification must be received by the
corporation; and

         (5) such other provisions with respect to the procedure as are deemed
necessary or desirable.

    B. Upon receipt by the corporation of a certification complying with the procedure,
the persons specified in the certification shall be deemed, for the purpose or purposes
set forth in the certification, to be the holders of record of the number of shares specified
in place of the shareholder making the certification.

History: 1953 Comp., § 51-24-49, enacted by Laws 1975, ch. 64, § 26.

ARTICLE 12
Business Corporations; Formation of Corporations

53-12-1. Incorporators.

    One or more persons or a domestic or foreign corporation may act as incorporator of
a corporation by signing and delivering an original and 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 commission [secretary of state] of articles of incorporation for the
corporation.

History: 1953 Comp., § 51-25-1, enacted by Laws 1967, ch. 81, § 49; 2003, ch. 318, §
34.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 53 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, deleted "or incorporators" following "act
as incorporator" and substituted "an original and a copy, which may be a photocopy of
the original after it was signed or a photocopy that is conformed to the original" for "in
duplicate" following "signing an delivering".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 189,
190.

Liability of attorney for improper or ineffective incorporation of client, 40 A.L.R.4th 535.

18 C.J.S. Corporations § 25 et seq.

53-12-2. Articles of incorporation.

    A. The articles of incorporation shall set forth:

         (1) the name of the corporation and, if different, the name under which it
proposes to transact business in New Mexico;

         (2) the period of duration, if other than perpetual;

         (3) the purpose for which the corporation is organized, which may include the
transaction of any lawful business for which corporations may be incorporated under the
Business Corporation Act;

         (4) the aggregate number of shares that the corporation has authority to issue
and, if the shares are to be divided into classes, the number of shares of each class;

         (5) if the shares are to be divided into classes, the designation of each class
and a statement of the preferences, limitations and relative rights in respect of the
shares of each class;

         (6) if the corporation is to issue the shares of any preferred or special class in
series, the designation of each series and a statement of the variations in the relative
rights and preferences as between series, insofar as they are to be fixed in the articles
of incorporation and a statement of any authority to be vested in the board of directors
to establish series and fix and determine the variations in the relative rights and
preferences as between series;

         (7) any provision limiting or denying to shareholders the preemptive right to
acquire unissued shares or securities convertible into such shares or carrying a right to
subscribe to or acquire shares;

         (8) the address of its initial registered office and the name of its initial
registered agent at the address;
         (9) the names and addresses of the persons who have consented to serve as
directors until the first annual meeting of shareholders or until their successors are
elected and qualify; and

         (10) the name and address of each incorporator.

    B. In addition to provisions required therein, the articles of incorporation may also
contain provisions not inconsistent with law regarding:

         (1) the direction of the management of the business and the regulation of the
affairs of the corporation;

         (2) the definition, limitation and regulation of the powers of the corporation,
the directors and the shareholders, or any class of the shareholders, including
restrictions on the transfer of shares;

         (3) the minimum consideration for any authorized shares or class of shares;
and

         (4) any provision that, under the Business Corporation Act, is required or
permitted to be set forth in the bylaws.

    C. It is not necessary to set forth in the articles of incorporation any of the corporate
powers enumerated in the Business Corporation Act.

    D. The articles of incorporation may set forth any provision that the incorporators
elect to set forth for the regulation of the internal affairs of the corporation.

    E. The articles of incorporation may provide that a director shall not be personally
liable to the corporation or its shareholders for monetary damages for breach of
fiduciary duty as a director unless:

         (1) the director has breached or failed to perform the duties of the director's
office in compliance with Subsection B of Section 53-11-35 NMSA 1978; and

         (2) the breach or failure to perform constitutes:

             (a) negligence, willful misconduct or recklessness in the case of a director
who has either an ownership interest in the corporation or receives as a director or as
an employee of the corporation compensation of more than two thousand dollars
($2,000) from the corporation in any calendar year; or

             (b) willful misconduct or recklessness in the case of a director who does not
have an ownership interest in the corporation and does not receive as director or as an
employee of the corporation compensation of more than two thousand dollars ($2,000)
from the corporation in any calendar year.
    Such a provision in the articles of incorporation shall, however, only eliminate the
liability of a director for action taken as a director or any failure to take action as a
director at meetings of the board of directors or of a committee of the board of directors
or by virtue of action of the directors without a meeting pursuant to Section 53-11-43
NMSA 1978, on or after the date when such provision in the articles of incorporation
becomes effective.

History: 1953 Comp., § 51-25-2, enacted by Laws 1967, ch. 81, § 50; 1975, ch. 64, §
27; 1983, ch. 304, § 43; 1987, ch. 238, § 12; 1988, ch. 39, § 1; 1991, ch. 170, § 7; 1993,
ch. 318, § 3; 2003, ch. 318, § 35; 2021, ch. 68, § 4.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 54 of the ABA Model
Business Corporation Act.

The 2021 amendment, effective July 1, 2021, required articles of incorporation to
include any name under which the corporation proposes to transact business in New
Mexico if different than the corporate name; and in Subsection A, Paragraph A(1), after
"corporation", added "and, if different, the name under which it proposes to transact
business in New Mexico".

The 2003 amendment, effective July 1, 2003, substituted "that the corporation has" for
"which the corporation shall have" following "number of shares" in Paragraph A(4);
deleted "the number of directors constituting the initial board of directors and" at the
beginning Paragraph A(9); deleted "in his capacity" following "corporation or receives" in
Subparagraph E(2)(a); and deleted "in his capacity" following "does not receive" in
Subparagraph E(2)(b).

The 1993 amendment, effective June 18, 1993, in Subsection A(9), substituted "have
consented" for "are" and deleted "and include a statement that an affidavit signed by
each director stating that he consents to being a director is on file with the corporation"
from the end.

The 1991 amendment, effective January 1, 1992, in Subsection A, added "and include
a statement that an affidavit signed by each director stating that he consents to being a
director is on file with the corporation" at the end of Paragraph (9) and made minor
stylistic changes in Paragraphs (3) and (6).

Amendment requiring consent of decedent shareholder's heirs. -- Amendment of
the articles of incorporation, placing restrictions on the transfer of shares, did not affect
shares which were due heirs of a decedent shareholder, in the absence of consent and
any opportunity to participate in the decision to amend the articles and adopt the
restrictions. Lett v. Westland Dev. Co., 1991-NMSC-069, 112 N.M. 327, 815 P.2d 623.
Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253 (1987).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 199 to
206.

Validity of restriction on transfer of stock in articles of incorporation, 65 A.L.R. 1159, 61
A.L.R.2d 1318.

Validity and construction of corporate articles or bylaws relating to stock held by one
retiring from corporate office or employment, 66 A.L.R. 1295.

Conclusiveness of charter as regards character, kind or purposes of corporation, 119
A.L.R. 1012.

Conclusiveness, as regards venue, of designation in incorporation papers of place of
business, 175 A.L.R. 1092.

Construction and effect of corporate articles, charter, or bylaws limiting duration or
maturity of its indebtedness, 55 A.L.R.2d 949.

18 C.J.S. Corporations § 25 et seq.

53-12-3. Filing of articles of incorporation.

    A. An original of the articles of incorporation together with a copy, which may be
signed, photocopied or conformed, and a statement executed by the designated
registered agent acknowledging acceptance of the appointment by the filing corporation
as its registered agent, if the agent is an individual, or a statement executed by an
authorized officer of a corporation that is the designated registered agent in which the
officer acknowledges the corporation's acceptance of the appointment by the filing
corporation as its registered agent, if the agent is a corporation, shall be delivered to the
commission [secretary of state]. If the commission [secretary of state] finds that the
articles of incorporation and the statement conform to law, it shall, when all fees have
been paid:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing thereof;

         (2) file the original and the statement in its office; and
         (3) issue a certificate of incorporation to which it shall affix the file-stamped
copy.

    B. The certificate of incorporation, together with the file-stamped copy of the articles
of incorporation affixed to it, shall be returned by the commission [secretary of state] to
the incorporators or their representative.

History: 1953 Comp., § 51-25-3, enacted by Laws 1967, ch. 81, § 51; 1977, ch. 103, §
12; 2001, ch. 200, § 51; 2003, ch. 318, § 36.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 55 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, in Subsection A, deleted "and franchise
taxes" following "when all fees".

The 2001 amendment, effective July 1, 2001, substituted "statement" for "affidavit"
throughout the section; in Subsection A, substituted "An original of the articles of
incorporation together with a copy, which may be signed, photocopied or conformed" for
"Duplicate originals of the articles of incorporation", substituted "an authorized officer"
for "the president or vice president" substituted "the original and copy" for "each of the
duplicate originals" in Paragraph (1), substituted "file the original" for "file one of the
duplicate originals" in Paragraph (2), substituted "file-stamped copy" for "other duplicate
original" in Paragraph (3); and in Subsection B, substituted "file-stamped copy" for
"duplicate original".

No requirement to file with county clerks. -- No requirement exists in this provision
for filing or recording articles of incorporation, or amendments, with the county clerks.
1968 Op. Att'y Gen. No. 68-108.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 208 to
213.
18 C.J.S. Corporations § 39.

53-12-4. Effect of incorporation.

    Unless the commission [secretary of state] disapproves pursuant to Subsection A of
Section 53-18-2 NMSA 1978, upon delivery of the articles of incorporation to the
commission [secretary of state], the corporate existence shall begin, and the certificate
of incorporation shall be conclusive evidence that all conditions precedent required to
be performed by the incorporators have been complied with and that the corporation
has been incorporated under the Business Corporation Act, except as against this state
in a proceeding to cancel or revoke the certificate of incorporation or for involuntary
dissolution of the corporation.

History: 1953 Comp., § 51-25-4, enacted by Laws 1967, ch. 81, § 52; 1983, ch. 304, §
44.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 56 of the ABA Model
Business Corporation Act.

Cross references. -- For definition of "commission," see 53-11-2L NMSA 1978.

The 1983 amendment, effective June 17, 1983, deleted "issuance of certificate of"
preceding "incorporation" in the catchline and substituted "Unless the commission . . . to
the commission," for "Upon the issuance of the certificate of incorporation," at the
beginning of the section.

Statutory conditions to be met after incorporation are conditions subsequent. --
Statutory conditions to the right to engage in business, to be performed after the
corporation has been formed, are conditions subsequent, and while noncompliance
therewith may give the state a right to proceed to forfeit the franchise, such
noncompliance in the absence of such proceeding does not in anywise affect the legal
existence of the corporation. Scott Graphics, Inc. v. Mahaney, 1976-NMCA-038, 89
N.M. 208, 549 P.2d 623, cert. denied, 89 N.M. 322, 551 P.2d 1369.
Law reviews. -- Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253
(1987).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations § 67.

18 C.J.S. Corporations §§ 45 to 61.

53-12-5. Organization meeting of directors.

    After the issuance of the certificate of incorporation, an organization meeting of the
board of directors named in the articles of incorporation shall be held, either within or
without this state, at the call of a majority of the directors named in the articles of
incorporation, for the purpose of adopting bylaws, electing officers and the transaction
of other business as may come before the meeting. The directors calling the meeting
shall give at least three days' notice thereof by mail to each director so named, stating
the time and place of the meeting.

History: 1953 Comp., § 51-25-6, enacted by Laws 1967, ch. 81, § 54; 1975, ch. 64, §
28.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 57 of the ABA Model
Business Corporation Act.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 220,
221.

53-12-6. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1993, ch. 318, § 6 repealed 53-12-6 NMSA 1978, as enacted by
Laws 1991, ch. 170, § 8, requiring any person elected or appointed to a board of
directors to file an affidavit with the corporation stating that he consents to be a member
of the board of directors, effective June 18, 1993. For provisions of former section, see
the 1992 NMSA 1978 on NMOneSource.com.

53-12-7. Designation as a benefit corporation; requirements;
standard of conduct.
    A. A corporation, including a professional corporation, may elect to be designated
as a benefit corporation. A professional corporation that elects to be designated as a
benefit corporation does not violate the provisions of Section 53-6-5 NMSA 1978. A
provision of the articles of incorporation or bylaws of a benefit corporation shall not limit,
conflict with or supersede the provisions of this section. A corporation that elects to be
designated as a benefit corporation:

         (1) shall include a statement in the corporation's articles of incorporation that
the corporation is a benefit corporation;

         (2) in addition to the purpose for which the corporation is organized pursuant
to Paragraph (3) of Subsection A of Section 53-12-2 NMSA 1978, shall have a purpose
to create through its business and operations the general public benefit of a positive
impact on society and the environment, taken as a whole, that is material taking into
consideration the corporation's size and the nature of its business;

         (3) may identify in the corporation's articles of incorporation that it has a
purpose to create a specific public benefit of a positive effect on one or more
communities or categories of persons, other than shareholders solely in their capacity
as shareholders, or on the environment, including effects of an artistic, charitable,
economic, educational, cultural, literary, medical, religious, social, ecological or scientific
nature;

         (4) shall prepare and provide to shareholders a benefit report annually that:

             (a) describes the corporation's progress in achieving its general public benefit
purpose and any specific public benefit purpose stated in the articles of incorporation;

             (b) describes the process and rationale for selecting or changing the third-
party standard used to measure achieving the general public benefit or a specific public
benefit;

             (c) assesses the overall social and environmental performance of the benefit
corporation against a third-party standard;

             (d) identifies each member of the board of directors and the duties and
compensation as a director; provided that the benefit corporation may omit information
regarding director compensation and financial or proprietary information from the benefit
report that is made public; and

             (e) discloses any connection with the entity that established the third-party
standard used to assess the general public benefit or a specific public benefit; and

         (5) shall publish the benefit report on the public portion of its internet website,
if any, or provide a copy free of charge to any person that requests the benefit report.
    B. When performing and discharging the duties of a director set forth in Section 53-
11-35 NMSA 1978, a director of a benefit corporation, in determining what that director
reasonably believes to be in, or not opposed to, the best interests of the benefit
corporation, shall take into consideration:

         (1) the interests of the benefit corporation's shareholders, employees,
workforce and customers as beneficiaries of the general public benefit or a specific
public benefit;

         (2) community and societal factors;

         (3) the local and global environment;

         (4) the short-term and long-term interests of the benefit corporation, including
benefits that may accrue to the benefit corporation from its long-term plans and the
possibility that these interests may be best served by the continued independence of
the benefit corporation; and

         (5) the ability of the benefit corporation to accomplish its general public
benefit purpose and any specific public benefit purpose stated in the corporation's
articles of incorporation.

    C. A director of a benefit corporation is not required to give priority to the interests of
a particular person or group listed in Subsection B of this section over the interests of
any other person or group unless the benefit corporation has stated in its articles of
incorporation the intention to give priority to certain interests related to its
accomplishment of the general public benefit or a specific public benefit.

    D. An officer of a benefit corporation shall consider the interests and factors listed in
Subsection B of this section if the officer:

         (1) has the discretion to act with respect to a matter; and

         (2) reasonably believes that the matter may have a material effect in
achieving the corporation's general public benefit purpose or any specific public benefit
purpose identified in the articles of incorporation.

    E. The board of directors of a publicly traded corporation designated as a benefit
corporation shall elect an independent director who shall prepare the benefit report.
Any other corporation may designate a director or officer to prepare the benefit report.

    F. A benefit corporation shall not be liable for monetary damages pursuant to this
section for any failure to pursue or create general public benefit or a specific public
benefit.
    G. A claim or action against a benefit corporation for failure to pursue or create
general public benefit or a specific public benefit as set forth in the articles of
incorporation, or a violation of any obligation, duty or standard of conduct pursuant to
this section, may only be commenced or maintained by the benefit corporation or on
behalf of the corporation in a derivative lawsuit by:

         (1) a person or group of persons that, at the time of the action or inaction that
gave rise to the complaint, owned beneficially or of record at least two percent of the
total number of shares or of a class of shares;

         (2) a director of the benefit corporation;

         (3) a person or group of persons that, at the time of the action or inaction that
gave rise to the complaint, owned beneficially or of record five percent or more of the
outstanding equity interests in an entity of which the benefit corporation is a subsidiary;
or

         (4) other persons as specified in the articles of incorporation or bylaws of the
benefit corporation.

    H. The amendments to the articles of incorporation that relate to the designation or
termination of the designation of the benefit corporation or the general public benefit or
a specific public benefit of the corporation shall only be adopted upon receiving the
affirmative vote of the holders of a two-thirds' majority of the shares entitled to vote,
unless any class of shares is entitled to vote as a class, in which event, the proposed
amendment shall be adopted upon receiving the affirmative vote of the holders of a two-
thirds' majority of the shares of each class of shares entitled to vote as a class and of
the total shares entitled to vote.

    I. A benefit corporation may terminate its designation as a benefit corporation by
amending its articles of incorporation to delete the requirements of Paragraphs (1) and
(2) of Subsection A of this section. The termination of the designation shall be effective
upon the adoption of the amendment.

History: Laws 2020, ch. 61, § 1.

                                               ANNOTATIONS

Effective dates. -- Laws 2020, ch. 61 contained no effective date provision, but,
pursuant to N.M. Const., art. IV, § 23, was effective May 20, 2020, 90 days after
adjournment of the legislature.

ARTICLE 13
Business Corporations; Amendment of Articles of
Incorporation
53-13-1. Right to amend articles of incorporation.

    A corporation may amend its articles of incorporation from time to time in as many
respects as may be desired, so long as its articles of incorporation, as amended,
contain only such provisions as might be lawfully contained in original articles of
incorporation at the time of making the amendment and, if a change in shares or the
rights of shareholders, or an exchange, reclassification or cancellation of shares or
rights of shareholders is to be made, provisions as may be necessary to effect the
change, exchange, reclassification or cancellation. In particular, and without limitation
upon the general power of amendment, a corporation may amend its articles of
incorporation from time to time to:

    A. change its corporate name and, if different, include any name under which it
proposes to transact business in New Mexico;

    B. change its period of duration;

    C. change, enlarge or diminish its corporate purposes;

    D. increase or decrease the aggregate number of shares or shares of any class that
the corporation has authority to issue;

    E. provide or eliminate any provision with respect to the minimum consideration for
any shares or class of shares;

    F. exchange, classify, reclassify or cancel all or any part of its shares, whether
issued or unissued;

    G. change the designation of all or any part of its shares, whether issued or
unissued, and to change the preferences, limitations and relative rights in respect of all
or any part of its shares, whether issued or unissued;

    H. change the shares of any class, whether issued or unissued, into a different
number of shares of the same class or into the same or a different number of shares of
other classes;

    I. create new classes of shares having rights and preferences, either prior and
superior or subordinate and inferior, to the shares of any class then authorized, whether
issued or unissued;

    J. cancel or otherwise affect the right of the holders of the shares of any class to
receive dividends that have accrued but have not been declared;

    K. divide any preferred or special class of shares, whether issued or unissued, into
series and fix and determine the designation of the series and the variations in the
relative rights and preferences as between the shares of the series;
    L. authorize the board of directors to establish, out of authorized but unissued
shares, series of any preferred or special class of shares and fix and determine the
relative rights and preferences of the shares of any series so established;

    M. authorize the board of directors to fix and determine the relative rights and
preferences of the authorized but unissued shares of series theretofore established in
respect of which either the relative rights and preferences have not been fixed and
determined or the relative rights and preferences theretofore fixed and determined are
to be changed;

    N. revoke, diminish or enlarge the authority of the board of directors to establish
series out of authorized but unissued shares of any preferred or special class and fix
and determine the relative rights and preferences of the shares of any series so
established; or

    O. limit, deny or grant to shareholders of any class the preemptive right to acquire
additional shares of the corporation, whether then or thereafter authorized.

History: 1953 Comp., § 51-26-1, enacted by Laws 1967, ch. 81, § 55; 1983, ch. 304, §
45; 2021, ch. 68, § 5.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 58 of the ABA Model
Business Corporation Act.

The 2021 amendment, effective July 1, 2021, provided that a corporation may amend
its articles of incorporation to include any name under which the corporation proposes to
transact business in New Mexico if different than the corporate name; and in Subsection
A, after "corporate name", added "and, if different, include any name under which it
proposes to transact business in New Mexico".

The 1983 amendment, effective June 17, 1983, rewrote Subsection E, which formerly
read "increase or decrease the par value of the authorized shares of any class having a
par value, whether issued or unissued," deleted former Subsection H, relating to
changing shares with par value into shares without par value and vice versa,
redesignated former Subsection I as present Subsection H, deleted "and whether with
or without par value" preceding "into a different number" and deleted "either with or
without par value" preceding "of other classes" in Subsection H, redesignated former
Subsections J to P as present Subsections I to O, respectively, and deleted "or
treasury" preceding "shares" in Subsection O.

Consent of heirs of decedent shareholder. -- Amendment of the articles of
incorporation, placing restrictions on the transfer of shares, did not affect shares which
were due heirs of a decedent shareholder, in the absence of consent and any
opportunity to participate in the decision to amend the articles and adopt the restrictions.
Lett v. Westland Dev. Co., 1991-NMSC-069, 112 N.M. 327, 815 P.2d 623.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations §§ 76 to
95.

Power of corporation to amend its charter in respect of character or kind of business,
111 A.L.R. 1525.

18 C.J.S. Corporations §§ 54 to 61.

53-13-2. Procedure to amend articles of incorporation.

    Amendments to the articles of incorporation shall be made in the following manner:

    A. if shares have been issued, the board of directors shall adopt a resolution setting
forth the proposed amendment and directing that it be submitted to a vote at a meeting
of shareholders, which may be either the annual or a special meeting. If no shares have
been issued, the amendment shall be adopted by resolution of the board of directors,
and the provisions for adoption by shareholders shall not apply. If the corporation has
only one class of shares outstanding, an amendment solely to change the number of
authorized shares to effectuate a split of, or stock dividend in, the corporation's own
shares, or solely to do so and to change the number of authorized shares in proportion
thereto, may be adopted by the board of directors; and the provisions for adoption by
shareholders shall not apply, unless otherwise provided by the articles of incorporation.
The resolution may incorporate the proposed amendment in restated articles of
incorporation which contain a statement that, except for the designated amendment, the
restated articles of incorporation correctly set forth without change the corresponding
provisions of the articles of incorporation as theretofore amended and that the restated
articles of incorporation together with the designated amendment supersede the original
articles of incorporation and all amendments thereto;

    B. written notice setting forth the proposed amendment or a summary of the
changes to be effected thereby shall be given to each shareholder of record entitled to
vote thereon within the time and in the manner provided in the Business Corporation Act
for the giving of notice of meetings of shareholders. If the meeting is an annual meeting,
the proposed amendment or the summary may be included in the notice of the annual
meeting; and
    C. at the meeting, a vote of the shareholders entitled to vote thereon shall be taken
on the proposed amendment. The proposed amendment shall be adopted upon
receiving the affirmative vote of the holders of a majority of the shares entitled to vote
thereon, unless any class of shares is entitled to vote thereon as a class, in which event
the proposed amendment shall be adopted upon receiving the affirmative vote of the
holders of a majority of the shares of each class of shares entitled to vote thereon as a
class and of the total shares entitled to vote thereon. Any number of amendments may
be submitted to the shareholders and voted upon by them at one meeting.

History: 1953 Comp., § 51-26-2, enacted by Laws 1967, ch. 81, § 56; 1975, ch. 64, §
29; 1983, ch. 304, § 46.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 59 of the ABA Model
Business Corporation Act.

Cross references. -- For applicability of lowered voting requirements to existing
corporations, see 53-18-6.1 NMSA 1978.

The 1983 amendment, effective June 17, 1983, added the present third sentence of
Subsection A and substituted "a majority" of "two-thirds" in two places in the second
sentence of Subsection C.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253 (1987).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18 Am. Jur. 2d Corporations § 95.

53-13-3. Class voting on amendments.

    The holders of the outstanding shares of a class may vote as a class upon a
proposed amendment, whether or not entitled to vote thereon by the provisions of the
articles of incorporation, if the amendment would:

    A. effect an exchange, reclassification or cancellation of all or part of the shares or
the class;

    B. effect an exchange or create a right of exchange of all or any part of the shares
of another class into the shares of the class;

    C. change the designations, preferences, limitations or relative rights of the shares
of the class;
    D. change the shares of the class into the same or a different number of shares of
the same class or another class;

    E. create a new class of shares having rights and preferences prior and superior to
the shares of the class or increase the rights and preferences or the number of
authorized shares of any class having rights and preferences prior or superior to the
shares of the class;

    F. in the case of a preferred or special class of shares, divide the shares of the
class into series and fix and determine the designation of the series and the variations
in the relative rights and preferences between the shares of the series or authorize the
board of directors to do so;

    G. limit or deny the existing preemptive rights of the shares of the class; or

    H. cancel or otherwise affect dividends on the shares of the class which have
accrued but have not been declared.

History: 1953 Comp., § 51-26-3, enacted by Laws 1967, ch. 81, § 57; 1975, ch. 64, §
30; 1983, ch. 304, § 47; 2001, ch. 200, § 52.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 60 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, deleted former Subsection A, which read
"increase or decrease the aggregate number of authorized shares of the class", and
renumbered the remaining Subsections accordingly.

The 1983 amendment, effective June 17, 1983, redesignated former Subsections C to
J as present Subsections B to I, respectively, deleted former Subsection B, which read
"increase or decrease the par value of the shares of the class" deleted "whether with or
without par value," preceding "into" and deleted "either with or without par value"
preceding "of the same" in Subsection E, and deleted "or classes" at the end of
Subsection E.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

53-13-4. Articles of amendment.

    The articles of amendment shall be executed by the corporation by an authorized
officer and shall set forth:

    A. the name of the corporation;
    B. the amendment adopted;

    C. the date of the adoption of the amendment by the shareholders or by the board
of directors where no shares have been issued;

    D. the number of shares outstanding and the number of shares entitled to vote on
the amendment and, if the shares of any class are entitled to vote on it as a class, the
designation and number of outstanding shares entitled to vote of each class;

    E. the number of shares voted for and against the amendment, respectively, and, if
the shares of any class are entitled to vote on the amendment as a class, the number of
shares of each class voted for and against the amendment, respectively, or if no shares
have been issued, a statement to that effect; and

    F. if the amendment provides for an exchange, reclassification or cancellation of
issued shares and if the manner in which the action shall be effected is not set forth in
the amendment, then a statement of the manner in which it shall be effected.

History: 1953 Comp., § 51-26-4, enacted by Laws 1967, ch. 81, § 58; 1975, ch. 64, §
31; 1983, ch. 304, § 48; 2001, ch. 200, § 53.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 61 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, in the preliminary language, deleted the
provision that the articles of amendment be executed in duplicate, and substituted "an
authorized officer" for "its chairman of the board, president or vice president and by its
secretary or assistant secretary and verified by one of the officers signing the articles"
and substituted "in which the action shall be" for "in which they shall be" in Subsection
F.

The 1983 amendment, effective June 17, 1983, inserted "chairman of the board," near
the middle of the introductory language and deleted former Subsection G, which read "if
the amendment effects a change in the amount of stated capital, then a statement of the
manner in which it is effected and a statement, expressed in dollars, of the amount of
stated capital as changed by the amendment" and made other minor changes.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

53-13-5. Filing of articles of amendment.

    A. An original and a copy, which may be a photocopy of the original after it was
signed or a photocopy that is conformed to the original, of the articles of amendment
shall be delivered to the commission [secretary of state]. If the commission [secretary of
state] finds that the articles of amendment conform to law, it shall, when all fees have
been paid:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing;

         (2) file the original in its office; and

         (3) issue a certificate of amendment to which it shall affix the copy.

    B. The certificate of amendment, together with the duplicate original of the articles
of amendment affixed thereto by the commission [secretary of state], shall be returned
to the corporation or its representative.

History: 1953 Comp., § 51-26-5, enacted by Laws 1967, ch. 81, § 59; 1983, ch. 304, §
49; 2003, ch. 318, § 37.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 62 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, substituted "An original and a copy,
which may be a photocopy of the original after it was signed or a photocopy that is
conformed to the original" for "Duplicate originals" at the beginning of Subsection A;
substituted "the original and copy" for "each of the duplicate originals" in Paragraph
A(1); substituted "the original" for "one of the duplicate originals" in Paragraph A(2);
substituted "copy" for "other duplicate original" in Paragraph A(3).

The 1983 amendment, effective June 17, 1983, deleted "and franchise taxes" following
"fees" in the last sentence of the introductory language of Subsection A.

No requirement to file with county clerk. -- No requirement exists in this section for
filing the amendments with the county clerks. 1968 Op. Att'y Gen. No. 68-108.
53-13-6. Effect of certificate of amendment.

    Unless the commission [secretary of state] disapproves pursuant to Subsection A of
Section 53-18-2 NMSA 1978, the amendment shall become effective upon delivery of
the articles of amendment to the commission [secretary of state] or on such later date,
not more than thirty days subsequent to the delivery thereof to the commission
[secretary of state], as shall be provided for in the articles of amendment. No
amendment shall affect any existing cause of action in favor of or against the
corporation or any pending suit to which the corporation is a party or the existing rights
of persons other than shareholders; and, in the event the corporate name is changed by
amendment, no suit brought by or against the corporation under its former name shall
abate for that reason.

History: 1953 Comp., § 51-26-6, enacted by Laws 1967, ch. 81, § 60; 1983, ch. 304, §
50.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 63 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, rewrote the first sentence, which
formerly read: "Upon the issuance of the certificate of amendment by the commission,
the amendment shall become effective and the articles of incorporation shall be deemed
to be amended accordingly."

53-13-7. Restated articles of incorporation.

    A. A domestic corporation may at any time restate its articles of incorporation, as
amended, by a resolution adopted by the board of directors.

    B. Upon the adoption of such resolution, restated articles of incorporation shall be
executed by the corporation by an authorized officer and shall set forth all of the
operative provisions of the articles of incorporation as amended together with a
statement that the restated articles of incorporation correctly set forth without change
the corresponding provisions of the articles of incorporation as amended and that the
restated articles of incorporation supersede the original articles of incorporation and all
previous amendments.

    C. The original of the restated articles of incorporation together with a copy, which
may be signed, photocopied or conformed, shall be delivered to the commission
[secretary of state]. If the commission [secretary of state] finds that the restated articles
of incorporation conform to law, it shall, when all fees have been paid:

         (1) endorse on the original and a copy the word "filed" and the month, day
and year of the filing;

         (2) file the original in its office; and

         (3) issue a restated certificate of incorporation to which it shall affix the file-
stamped copy.

    D. The restated certificate of incorporation, together with the file-stamped copy of
the restated articles of incorporation affixed to it shall be returned by the commission
[secretary of state] to the corporation or its representative. Unless the commission
[secretary of state] disapproves pursuant to Subsection A of Section 53-18-2 NMSA
1978, upon delivery of the restated articles of incorporation to the commission
[secretary of state], the restated articles of incorporation shall become effective and
shall supersede the original articles of incorporation and all previous amendments.

History: 1953 Comp., § 51-26-7, enacted by Laws 1975, ch. 64, § 32; 1983, ch. 304, §
51; 2001, ch. 200, § 54.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived in part from Section 64 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, deleted the provision that the articles of
incorporation be executed in duplicate and changed the provisions of the section so that
instead of explaining the procedures for processing duplicates, it explains procedures
for processing the original and a copy of the original; in Subsection B, substituted "an
authorized officer" for "its chairman of the board, president or vice president and by its
secretary or assistant secretary and verified by one of the officers signing the articles",
and inserted "previous" preceding "amendments" at the end of Subsections B and D.

The 1983 amendment, effective June 17, 1983, deleted "and franchise taxes" following
"fees" near the end of the last sentence of the introductory language of Subsection C
and substituted "Unless the commission . . . to the commission," for "Upon the issuance
of the restated certificate of incorporation by the commission," at the beginning of the
last sentence of Subsection D.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

53-13-8. Amendment of articles of incorporation in reorganization
proceedings.

    A. Whenever a plan of reorganization of a corporation has been confirmed by
decree or order of a court of competent jurisdiction in proceedings for the reorganization
of the corporation, pursuant to the provisions of any applicable statute of the United
States relating to reorganizations of corporations, the articles of incorporation of the
corporation may be amended in the manner provided in this section in as many
respects as necessary to carry out the plan and put it into effect, so long as the articles
of incorporation as amended contain only those provisions that may be lawfully
contained in original articles of incorporation at the time of making the amendment. The
articles of incorporation may be amended for the foregoing purpose to:

         (1) change the corporate name, period of duration or corporate purposes of
the corporation;

         (2) repeal, alter or amend the bylaws of the corporation;

         (3) change the aggregate number of shares or shares of any class that the
corporation has authority to issue;

         (4) change the preferences, limitations and relative rights in respect of all or
any part of the shares of the corporation and classify, reclassify or cancel all or any part
of the shares, whether issued or unissued;

         (5) authorize the issuance of bonds, debentures or other obligations of the
corporation, whether or not convertible into shares of any class or bearing warrants or
other evidences of optional rights to purchase or subscribe for shares of any class, and
fix the terms and conditions thereof; and
         (6) constitute or reconstitute and classify or reclassify the board of directors of
the corporation and appoint directors and officers in place of, or in addition to, all or any
of the directors or officers then in office.

    B. Amendments to the articles of incorporation pursuant to this section shall be
made in the following manner:

         (1) articles of amendment approved by decree or order of court shall be
executed by the person the court designates or appoints for the purpose and shall set
forth the name of the corporation, the amendments of the articles of incorporation
approved by the court, the date of the decree or order approving the articles of
amendment, the title of the proceedings in which the decree or order was entered and a
statement that the decree or order was entered by a court having jurisdiction of the
proceedings for the reorganization of the corporation pursuant to the provisions of an
applicable statute of the United States;

         (2) an original of the articles of amendment together with a copy, which may
be signed, photocopied or conformed, shall be delivered to the commission [secretary of
state]. If the commission [secretary of state] finds that the articles of amendment
conform to law, it shall, when all fees have been paid:

             (a) endorse on the original and copy the word "filed" and the month, day and
year of the filing;

             (b) file the original in its office; and

             (c) issue a certificate of amendment to which it shall affix the file-stamped
copy; and

         (3) the certificate of amendment, together with the file-stamped copy of the
articles of amendment affixed to it shall be returned by the commission [secretary of
state] to the corporation or its representative. Unless the commission [secretary of state]
disapproves pursuant to Subsection A of Section 53-18-2 NMSA 1978, the amendment
shall become effective upon delivery of the articles of amendment to the commission
[secretary of state] or on a later date, not more than thirty days subsequent to the
delivery of the articles to the commission [secretary of state], as shall be provided for in
the articles of amendment without any action thereon by the directors or shareholders of
the corporation and with the same effect as if the amendments had been adopted by
unanimous action of the directors and shareholders of the corporation.

History: 1953 Comp., § 51-26-8, enacted by Laws 1967, ch. 81, § 62; 1983, ch. 304, §
52; 2001, ch. 200, § 55.

                                               ANNOTATIONS
Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 65 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, deleted "In particular and without
limitation upon general power of amendments" from the second sentence of Subsection
A; in Subsection B, deleted "and verified in duplicate" following "executed" in Paragraph
(1) and in Paragraphs (2) and (3), changed the provisions of the section so that instead
of explaining the procedures for processing duplicate articles of amendment, it explains
procedures for processing the original and a copy of the original.

The 1983 amendment, effective June 17, 1983, deleted "or persons" following "person"
near the beginning of Paragraph (1) of Subsection B, deleted "and franchise taxes"
following "fees" in the last sentence of the introductory language of Paragraph (2) of
Subsection B, substituted "Unless the commission . . . 53-18-2 NMSA 1978," for "Upon
the issuance of the certificate of amendment by the commission," at the beginning of the
last sentence of Paragraph (3) of Subsection B, and substituted "upon delivery of . . . in
the articles of amendment" for "and the articles of incorporation shall be deemed to be
amended accordingly," near the middle of the last sentence of Paragraph (3) of
Subsection B.

53-13-9 to 53-13-12. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1983, ch. 304, § 73 repealed 53-13-9 to 53-13-12 NMSA 1978, as
enacted by Laws 1967, ch. 81, §§ 63 to 66, relating to restrictions on redemption or
purchase of redeemable shares, cancellation of redeemable shares by redemption or
purchase, cancellation of other reacquired shares, and reduction of stated capital in
certain cases, respectively, effective June 17, 1983.

53-13-13. Procedure for share exchange.

    All the issued or all the outstanding shares of one or more classes of any domestic
corporation may be acquired through the exchange of all such shares of such class or
classes by another domestic corporation pursuant to a plan of exchange approved in
the manner provided in the Business Corporation Act. The board of directors of each
corporation shall, by resolution adopted by each such board, approve a plan of
exchange setting forth:

    A. the name of the corporation the shares of which are proposed to be acquired by
exchange and the name of the corporation to acquire the shares of such corporation in
the exchange, which is hereinafter designated as the acquiring corporation;

    B. the terms and conditions of the proposed exchange;

    C. the manner and basis of exchanging the shares to be acquired for shares,
obligations or other securities of the acquiring corporation or any other corporation, or,
in whole or in part, for cash or other property; and

    D. such other provisions with respect to the proposed exchange as are deemed
necessary or desirable.

    The procedure authorized by this section shall not be deemed to limit the power of a
corporation to acquire all or part of the shares of any class or classes of a corporation
through a voluntary exchange or otherwise by agreement with the shareholders.

History: 1978 Comp., § 53-13-13, enacted by Laws 1983, ch. 304, § 53.

                                               ANNOTATIONS

Repeals and reenactments. -- Laws 1983, ch. 304, § 53, repealed former 53-13-13
NMSA 1978, relating to special provisions relating to surplus and reserves, and enacted
a new section.

ARTICLE 14
Business Corporations; Mergers and Consolidations

53-14-1. Procedure for merger.

    Any two or more domestic corporations may merge into one of the corporations
pursuant to a plan of merger approved in the manner provided in the Business
Corporation Act. The board of directors of each corporation shall, by resolution adopted
by each such board, approve a plan of merger setting forth:

    A. the names of the corporations proposing to merge, and the name of the
corporation into which they propose to merge, which is hereinafter designated as the
"surviving corporation";

    B. the terms and conditions of the proposed merger;
    C. the manner and basis of converting the shares of each corporation into shares,
obligations or other securities of the surviving corporation or of any other corporation or,
in whole or in part, into cash or other property;

    D. a statement of any changes in the articles of incorporation of the surviving
corporation to be effected by the merger; and

    E. other provisions with respect to the proposed merger as deemed necessary or
desirable.

History: 1953 Comp., § 51-27-1, enacted by Laws 1967, ch. 81, § 68; 1973, ch. 153, §
1; 1975, ch. 64, § 33.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 71 of the ABA Model
Business Corporation Act.

Cross references. -- For consolidation or merger of professional corporation, see 53-
6-13 NMSA 1978.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2503,
2608, 2614, 2615.

Constitutional and statutory provisions relating to consolidation, merger, or
reorganization of corporations as applicable retrospectively to corporation previously
chartered, 131 A.L.R. 734.

Duty of corporate directors to exercise "informed" judgment in recommending
responses to merger or tender offers, 46 A.L.R.4th 887.

"Golden parachute" defense to hostile corporate takeover, 66 A.L.R.4th 138.

Lockup option defense to hostile corporate takeover, 66 A.L.R.4th 180.

Standing of private party under § 16 of Clayton Act (15 U.S.C.S. § 26) to seek injunction
to prevent merger or acquisition allegedly prohibited under § 7 of the act (15 U.S.C.S. §
18), 78 A.L.R. Fed. 159.

19 C.J.S. Corporations §§ 792 to 810.
53-14-2. Procedure for consolidation.

    Any two or more domestic corporations may consolidate into a new corporation
pursuant to a plan of consolidation approved in the manner provided in the Business
Corporation Act. The board of directors of each corporation shall, by a resolution
adopted by each such board, approve a plan of consolidation setting forth:

    A. the names of the corporations proposing to consolidate, and the name of the new
corporation into which they propose to consolidate, which is hereinafter designated as
the "new corporation";

    B. the terms and conditions of the proposed consolidation;

    C. the manner and basis of converting the shares of each corporation into shares,
obligations or other securities of the new corporation or any other corporation or, in
whole or in part, into cash or other property;

    D. with respect to the new corporation, all of the statements required to be set forth
in articles of incorporation for corporations organized under the Business Corporation
Act; and

    E. other provisions with respect to the proposed consolidation as deemed
necessary or desirable.

History: 1953 Comp., § 51-27-2, enacted by Laws 1967, ch. 81, § 69; 1975, ch. 64, §
34.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 72 of the ABA Model
Business Corporation Act.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2503,
2608, 2614, 2615.

Constitutional and statutory provisions relating to consolidation, merger or
reorganization of corporations as applicable retrospectively to corporations previously
chartered, 131 A.L.R. 734.

19 C.J.S. Corporations §§ 792 to 810.

53-14-3. Approval by shareholders.
    A. The board of directors of each corporation in the case of a merger or
consolidation, and the board of directors of the corporation the shares of which are to be
acquired in the case of an exchange, upon approving a plan of merger, consolidation or
exchange, shall, by resolution, direct that the plan be submitted to a vote at a meeting of
its shareholders, which may be either an annual or a special meeting. Written notice
shall be given to each shareholder of record, whether or not entitled to vote at the
meeting, not less than twenty days before the meeting in the manner provided in the
Business Corporation Act for the giving of notice of meetings of shareholders and,
whether the meeting is an annual or a special meeting, shall state that the purpose or
one of the purposes is to consider the proposed plan. A copy or a summary of the plan
shall be included in or enclosed with the notice.

    B. At each meeting, a vote of the shareholders shall be taken on the proposed plan.
The plan shall be approved upon receiving the affirmative vote of the holders of a
majority of the shares entitled to vote thereon of each such corporation, unless any
class of shares of any such corporation is entitled to vote thereon as a class, in which
event, as to such corporation, the plan shall be approved upon receiving the affirmative
vote of the holders of a majority of the shares of each class of shares entitled to vote
thereon. Any class of shares of any such corporation shall be entitled to vote as a class
if any such plan contains any provision which, if contained in a proposed amendment to
articles of incorporation, would entitle such class of shares to vote as a class and, in the
case of an exchange, if the class is included in the exchange.

    C. After such approval by a vote of the shareholders of each such corporation and
at any time prior to the filing of the articles of merger or consolidation or exchange, the
merger or consolidation or exchange may be abandoned pursuant to provisions
therefor, if any, set forth in the plan.

    D. (1) Notwithstanding the provisions of Subsections A and B of this section,
submission of a plan of merger to a vote at a meeting of shareholders of a surviving
corporation shall not be required if:

             (a) the articles of incorporation of the surviving corporation do not differ
except in name from those of the corporation before the merger;

             (b) each holder of shares of the surviving corporation which were outstanding
immediately before the effective date of the merger is to hold the same number of
shares with identical rights immediately after;

             (c) the number of voting shares outstanding immediately after the merger,
plus the number of voting shares issuable on conversion of other securities issued by
virtue of the terms of the merger and on exercise of rights and warrants so issued, will
not exceed by more than twenty percent the number of voting shares outstanding
immediately before the merger; and
             (d) the number of participating shares outstanding immediately after the
merger, plus the number of participating shares issuable on conversion of other
securities issued by virtue of the terms of the merger and on exercise of rights and
warrants so issued, will not exceed by more than twenty percent the number of
participating shares outstanding immediately before the merger.

         (2) As used in this subsection:

             (a) "voting shares" means shares which entitle their holders to vote
unconditionally in election of directors; and

             (b) "participating shares" means shares which entitle their holders to
participate without limitations in distribution of earnings or surplus.

History: 1953 Comp., § 51-27-3, enacted by Laws 1967, ch. 81, § 70; 1983, ch. 304, §
54.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 73 of the ABA Model
Business Corporation Act.

Cross references. -- For applicability of lowered voting requirements to existing
corporations, see 53-18-6.1 NMSA 1978.

The 1983 amendment, effective June 17, 1983, inserted "in the case of . . . of an
exchange," inserted "or exchange" following "consolidation" and inserted "its" preceding
"shareholders" in the first sentence of Subsection A, deleted "of merger or
consolidation" following "plan" in the second and last sentences of Subsection A;
deleted "of merger or consolidation" following "plan" in the first sentence and in two
places in the second sentence of Subsection B; substituted "a majority" for "two-thirds"
in two places in the second sentence of Subsection B; substituted "any such plan" for
"the plan of merger or consolidation, as the case may be" and added "and, in the case
of an exchange, if the class is included in the exchange" at the end of the last sentence
of Subsection B; inserted "such" preceding "corporation," inserted "or exchange" in two
places, and deleted "of merger or consolidation" following "plan" in Subsection C; and
added Subsection D.

Law reviews. -- Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253
(1987).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2612,
2618.
Status of owners of nonregistered stock as "stockholders" within state statute relating to
merger or consolidation or reorganization of corporation, or sale of its entire assets, 158
A.L.R. 983.

Duty of corporate directors to exercise "informed" judgment in recommending
responses to merger or tender offers, 46 A.L.R.4th 887.

19 C.J.S. Corporations § 798.

53-14-4. Articles of merger, consolidation or exchange.

    A. Upon receiving the approvals required by Sections 53-14-1, 53-14-2 and 53-14-3
NMSA 1978, articles of merger or articles of consolidation shall be executed by each
corporation by an authorized officer and shall set forth:

         (1) the plan of merger or the plan of consolidation;

         (2) as to each corporation, either:

             (a) the number of shares outstanding, and, if the shares of any class are
entitled to vote as a class, the designation and number of outstanding shares of each
such class; or

             (b) a statement that the vote of shareholders is not required by virtue of
Subsection D of Section 53-14-3 NMSA 1978;

         (3) as to each corporation the approval of whose shareholders is required, the
number of shares voted for and against the plan, respectively, and, if the shares of any
class are entitled to vote as a class, the number of shares of each such class voted for
and against the plan, respectively; and

         (4) as to the acquiring corporation in a plan of exchange, a statement that the
adoption plan and performance of its terms were duly approved by its board of directors
and such other requisite corporate action, if any, as may be required of it.

    B. The original of the articles of merger, consolidation or exchange together with a
copy, which may be signed, photocopied or conformed, shall be delivered to the
commission [secretary of state]. If the commission [secretary of state] finds that the
articles conform to law, it shall, when all fees have been paid:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing;

         (2) file the original in its office; and
         (3) issue a certificate of merger, consolidation or exchange to which it shall
affix the file-stamped copy.

    C. The certificate of merger, consolidation or exchange, together with the file-
stamped copy of the articles affixed to it shall be returned by the commission [secretary
of state] to the surviving, new or acquiring corporation or its representative.

History: 1953 Comp., § 51-27-4, enacted by Laws 1967, ch. 81, § 71; 1983, ch. 304, §
55; 2001, ch. 200, § 56.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 74 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, deleted the provision that the articles of
merger or articles of consolidation be executed in duplicate and changed the provisions
of the section so that instead of explaining the procedures for processing duplicates, it
explains procedures for processing the original and a copy of the original; and in
Subsection A, substituted "an authorized officer" for "its chairman of the board,
president or vice president and by its secretary or assistant secretary and verified by
one of the officers signing the articles".

The 1983 amendment, effective June 17, 1983, inserted "or exchange" following
"consolidation" in the catchline, in the first sentence of the introductory language of
Subsection B, in Paragraph (3) of Subsection B, and in Subsection C; substituted "Upon
receiving . . . NMSA 1978" for "Upon approval" at the beginning of the introductory
language of Subsection A, inserted "the plan" preceding "of consolidation" in Paragraph
(1) of Subsection A, designated former Paragraph (2) of Subsection A as present
Subparagraph (a) of Paragraph (2) and the introductory language of Paragraph (2),
adding "either" to the end of the introductory language, added Subparagraph (b) of
Paragraph (2) of Subsection A, inserted "the approval of whose shareholders is
required" in Paragraph (3) of Subsection A, added Paragraph (4) of Subsection A,
deleted "and franchise taxes" following "fees" in the last sentence of the introductory
language of Subsection B, deleted "of merger or consolidation" preceding "affixed" near
the middle of Subsection C, and inserted "or acquiring" near the end of Subsection C,
and made other minor changes.

53-14-5. Merger of subsidiary corporation.

    A. Any corporation owning at least ninety percent of the outstanding shares of each
class of another corporation may merge the other corporation into itself without approval
by a vote of the shareholders of either corporation. Its board of directors shall by
resolution approve a plan of merger setting forth:

         (1) the name of the subsidiary corporation and the name of the corporation
owning at least ninety percent of its shares, which is hereinafter designated as the
"surviving corporation"; and

         (2) the manner and basis of converting the shares of the subsidiary
corporation into shares, obligations or other securities of the surviving corporation or of
any other corporation or, in whole or in part, into cash or other property.

    B. A copy of the plan of merger shall be mailed to each shareholder of record of the
subsidiary corporation.

    C. Articles of merger shall be executed by the surviving corporation by an
authorized officer and shall set forth:

         (1) the plan of merger;

         (2) the number of outstanding shares of each class of the subsidiary
corporation and the number of such shares of each class owned by the surviving
corporation; and

         (3) the date of the mailing to shareholders of the subsidiary corporation of a
copy of the plan of merger.

    D. On and after the thirtieth day after the mailing of a copy of the plan of merger to
shareholders of the subsidiary corporation or upon the waiver of the mailing requirement
by the holders of all outstanding shares, an original of the articles of merger together
with a copy, which may be signed, photocopied or conformed, shall be delivered to the
commission [secretary of state]. If the commission [secretary of state] finds that the
articles conform to law, it shall, when all fees have been paid:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing;

         (2) file the original in its office; and

         (3) issue a certificate of merger to which it shall affix the file-stamped copy.
    E. The certificate of merger, together with the file-stamped copy affixed to it shall be
returned by the commission [secretary of state] to the surviving corporation or its
representative.

History: 1953 Comp., § 51-27-5, enacted by Laws 1967, ch. 81, § 72; 1975, ch. 64, §
35; 1983, ch. 304, § 56; 2001, ch. 200, § 57.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 75 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, deleted the provision that the articles of
merger be executed in duplicate and changed the provisions of the section so that
instead of explaining the procedures for processing duplicates, it explains procedures
for processing the original and a copy of the original; and in Subsection C, substituted
"an authorized officer" for "its chairman of the board, president or vice president and by
its secretary or assistant secretary and verified by one of the officers signing the
articles".

The 1983 amendment, effective June 17, 1983, deleted "and franchise taxes" following
"fees" in the last sentence of the introductory language of Subsection D.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

53-14-6. Effect of merger, consolidation or exchange.

    Unless the commission [secretary of state] disapproves pursuant to Subsection A of
Section 53-18-2 NMSA 1978, a merger, consolidation or exchange shall become
effective upon delivery of the articles of merger, consolidation or exchange to the
commission [secretary of state] or on such later date, not more than thirty days
subsequent to the delivery thereof to the commission [secretary of state], as shall be
provided for in the plan. When a merger or consolidation has become effective:
    A. the several corporations parties to the plan of merger or consolidation shall be a
single corporation, which, in the case of a merger, shall be that corporation designated
in the plan of merger as the surviving corporation and, in the case of a consolidation,
shall be the new corporation provided for in the plan of consolidation;

    B. the separate existence of all corporations parties to the plan of merger or
consolidation, except the surviving or new corporation, shall cease;

    C. the surviving or new corporation shall have all the rights, privileges, immunities
and powers and shall be subject to all the duties and liabilities of a corporation
organized under the Business Corporation Act;

    D. the surviving or new corporation shall thereupon possess all the rights, privileges,
immunities and franchises of a public or private nature of each of the merging or
consolidating corporations; and all property, real, personal and mixed and all debts due
on whatever account, including subscriptions to shares, and all other choses in action
and every other interest of, or belonging to, or due to, each of the corporations so
merged or consolidated shall be taken and deemed to be transferred to and vested in
such single corporation without further act or deed, and the title to any real estate, or
any interest therein, vested in any of such corporations shall not revert or be in any way
impaired by reason of the merger or consolidation;

    E. the surviving or new corporation shall thenceforth be responsible and liable for all
the liabilities and obligations of each of the corporations so merged or consolidated, and
any claim existing or action or proceeding pending by or against any of such
corporations may be prosecuted as if the merger or consolidation had not taken place,
or the surviving or new corporation may be substituted in its place. Neither the rights of
creditors nor any liens upon the property of any such corporation shall be impaired by
the merger or consolidation;

    F. in the case of a merger, the articles of incorporation of the surviving corporation
shall be deemed to be amended to the extent, if any, that changes in its articles of
incorporation are stated in the plan of merger, and, in the case of a consolidation, the
statements set forth in the articles of consolidation and which are required or permitted
to be set forth in the articles of incorporation of corporations organized under the
Business Corporation Act shall be deemed to be the original articles of incorporation of
the new corporation; and

    G. when a merger, consolidation or exchange has become effective, the shares of
the corporation or corporations party to the plan that are, under the terms of the plan, to
be converted or exchanged shall cease to exist, in the case of a merger or
consolidation, or be deemed to be exchanged, in the case of an exchange, and the
holders of such shares shall thereafter be entitled only to the shares, obligations, other
securities, cash or other property into which they shall have been converted or for which
they shall have been exchanged, in accordance with the plan, subject to any rights
under Section 53-14-4 NMSA 1978.
History: 1953 Comp., § 51-27-6, enacted by Laws 1967, ch. 81, § 73; 1983, ch. 304, §
57.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 76 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, rewrote the first sentence of the
introductory language, substituted "a" for "the" and substituted "become effective" for
"been effected" in the last sentence of the introductory language, and added Subsection
G, and made other minor changes.

Liability after merger. -- Although the liability of the merged corporation would be the
liability of the new corporation under Subsection E, this section does not impose the
liability of one of the old corporations upon the other old corporation. Sierra Blanca
Sales Co. v. Newco Indus., Inc., 1972-NMCA-153, 84 N.M. 524, 505 P.2d 867, cert.
denied, 84 N.M. 512, 505 P.2d 855.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2624 to
2638.

Liability of corporation for debts of predecessor, 15 A.L.R. 1112, 30 A.L.R. 558, 39
A.L.R. 143, 40 A.L.R. 273, 149 A.L.R. 787.

Power to require nonassenting creditors or bondholders to accept securities of, or
shares in, new or reorganized corporation, 28 A.L.R. 1196, 88 A.L.R. 1238.

Merger of corporations as justification for termination of contract of employment, 34
A.L.R. 817, 47 A.L.R. 258, 59 A.L.R. 294.

Liability on stock subscription as affected by reorganization, consolidation, or merger of
corporation, 45 A.L.R. 1031, 89 A.L.R. 770, 154 A.L.R. 427.
Changes in corporate organization as affecting status as trustee, administrator, or
guardian, 61 A.L.R. 994, 131 A.L.R. 753.

Successor products liability: form of business organization of successor or predecessor
as affecting successor liability, 32 A.L.R.4th 196.

Fidelity bond termination clause on taking over of insured by another business entity:
Construction and effect, 44 A.L.R.4th 1195.

Liability of successor corporation for punitive damages for injury caused by
predecessor's product, 55 A.L.R.4th 166.

Liability of successor corporation for injury or damage caused by product issued by
predecessor, based on merger or consolidation of transferor and transferee, 109
A.L.R.5th 301.

Liability of parent or successor corporation, or corporate shareholders, in action
pursuant to Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA) (42 USCS §§ 9601-9675), 121 A.L.R. Fed. 173.

53-14-7. Merger, consolidation or exchange of shares between
domestic and foreign corporations.

    A. One or more foreign corporations and one or more domestic corporations may be
merged or consolidated or participate in an exchange, in the following manner, if the
merger, consolidation or exchange is permitted by the laws of the state under which
each foreign corporation is organized:

         (1) each domestic corporation shall comply with the provisions of the
Business Corporation Act with respect to the merger, consolidation or exchange, as the
case may be, of domestic corporations, and each foreign corporation shall comply with
the applicable provisions of the laws of the state under which it is organized; and

         (2) if the surviving or new corporation in a merger or consolidation is to be
governed by the laws of any state other than this state, it shall comply with the
provisions of the Business Corporation Act with respect to foreign corporations if it is to
transact business in this state, and in every case it shall file with the commission
[secretary of state]:

             (a) an agreement that it may be served with process in this state in any
proceeding for the enforcement of any obligation of any domestic corporation which is a
party to the merger or consolidation and in any proceeding for the enforcement of the
rights of a dissenting shareholder of any such domestic corporation against the
surviving or new corporation;
             (b) an irrevocable appointment of the secretary of state as its agent to accept
service of process in any such proceeding; and

             (c) an agreement that it will promptly pay to the dissenting shareholders of
any such domestic corporation the amount, if any, to which they shall be entitled under
the provisions of the Business Corporation Act with respect to the rights of dissenting
shareholders.

    B. The effect of such merger or consolidation shall be the same as in the case of
the merger or consolidation of domestic corporations, if the surviving or new corporation
is to be governed by the laws of this state. If the surviving or new corporation is to be
governed by the laws of any state other than this state, the effect of such merger or
consolidation shall be the same as in the case of the merger or consolidation of
domestic corporations except insofar as the laws of such other state provide otherwise.
At any time prior to the filing of the articles of merger or consolidation, the merger or
consolidation may be abandoned pursuant to provisions therefor, if any, set forth in the
plan of merger or consolidation.

History: 1953 Comp., § 51-27-7, enacted by Laws 1967, ch. 81, § 74; 1983, ch. 304, §
58.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 77 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, inserted "or exchange" and "shares
between" in the catchline, in the introductory language of Subsection A inserted "or
participate in an exchange" and "or exchange," inserted "or exchange" in Paragraph (1)
of Subsection A, substituted "in a merger or consolidation" for "as the case may be" in
the introductory language of Paragraph (2) of Subsection A, and substituted "shall be"
for "are" in Subparagraph (c) of Paragraph (2) of Subsection A.
Am. Jur. 2d, A.L.R. and C.J.S. references. -- Federal diversity of citizenship
jurisdiction where one of the states in which multistate corporation party litigant is
alleged to be incorporated is also state of citizenship of opponent, 27 A.L.R.2d 745.

Standing of private party under § 16 of Clayton Act (15 U.S.C.S. § 26) to seek injunction
to prevent merger or acquisition allegedly prohibited under § 7 of the act (15 U.S.C.S. §
18), 78 A.L.R. Fed. 159.

19 C.J.S. Corporations §§ 931 to 935.

ARTICLE 15
Business Corporations; Sale of Assets

53-15-1. Sale of assets in regular course of business and mortgage
or pledge of assets.

    The sale, lease, exchange or other disposition of all, or substantially all, the property
and assets of a corporation in the usual and regular course of its business and the
mortgage or pledge of any or all property and assets of a corporation, whether or not in
the usual and regular course of business, may be made upon such terms and
conditions and for such consideration, which may consist in whole or in part of money or
property, real or personal, including shares of any other corporation, domestic or
foreign, as authorized by its board of directors, and in any such case no authorization or
consent of the shareholders shall be required.

History: 1953 Comp., § 51-28-1, enacted by Laws 1967, ch. 81, § 75.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 78 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2654 to
2679.

Constitutionality, construction, and effect of statutory or charter provisions relating to
sale of all, or substantially all, of assets of corporation or division or distribution of
proceeds, 79 A.L.R. 624.

Applicability of statutes regulating sale of assets or property as affected by purpose or
character of corporation, 9 A.L.R.2d 1306.

Who may assert invalidity of sale, mortgage, or other disposition of corporate property
without approval of stockholders, 58 A.L.R.2d 784.
Duty of corporate directors to exercise "informed" judgment in recommending
responses to merger or tender offers, 46 A.L.R.4th 887.

19 C.J.S. Corporations §§ 792 to 810.

53-15-2. Sale of assets other than in regular course of business.

    A sale, lease, exchange or other disposition of all or substantially all the property
and assets, with or without the good will, of a corporation, if not in the usual and regular
course of its business, may be made upon such terms and conditions and for such
consideration, which may consist in whole or in part of money or property, real or
personal, including shares of any other corporation, domestic or foreign, as may be
authorized in the following manner:

    A. the board of directors shall adopt a resolution recommending such sale, lease,
exchange or other disposition and directing the submission thereof to a vote at a
meeting of shareholders, which may be either an annual or a special meeting;

    B. written notice shall be given to each shareholder of record, whether or not
entitled to vote at the meeting, not less than twenty days before the meeting, in the
manner provided in the Business Corporation Act for the giving of notice of meetings of
shareholders and, whether the meeting is an annual or a special meeting, shall state
that the purpose, or one of the purposes, is to consider the proposed sale, lease,
exchange or other disposition;

    C. at the meeting, the shareholders may authorize such sale, lease, exchange or
other disposition and may fix, or may authorize the board of directors to fix, any or all of
the terms and conditions thereof and the consideration to be received by the corporation
therefor. The authorization shall require the affirmative vote of the holders of a majority
of the shares of the corporation entitled to vote thereon, unless any class of shares is
entitled to vote thereon as a class, in which event the authorization shall require the
affirmative vote of the holders of a majority of the shares of each class of shares entitled
to vote as a class thereon and of the total shares entitled to vote thereon; and

    D. after the authorization by a vote of shareholders, the board of directors,
nevertheless, in its discretion, may abandon such sale, lease, exchange or other
disposition of assets, subject to the rights of third parties under any contracts relating
thereto, without further action or approval by shareholders.

History: 1953 Comp., § 51-28-2, enacted by Laws 1967, ch. 81, § 76; 1983, ch. 304, §
59.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 79 of the ABA Model
Business Corporation Act.
Cross references. -- For applicability of lowered voting requirements to existing
corporations, see 53-18-6.1 NMSA 1978.

The 1983 amendment, effective June 17, 1983, substituted "a majority" for "two-thirds"
in two places in the last sentence of Subsection C and added "and" at the end of
Subsection C.

Scope of article. -- In this jurisdiction the transfer of substantially all assets of a
corporation not in the normal course of business is governed by the Business
Corporation Act - sale of assets (53-15-1 to 53-15-4 NMSA 1978). Regents of N.M. Coll.
of Agric. & Mech. Arts v. Academy of Aviation, Inc., 1971-NMSC-087, 83 N.M. 86, 488
P.2d 343.

Transfer to one other than stranger to corporation. -- For a transfer to one other
than a stranger to the corporation to be valid the statutory requirements must be strictly
complied with. Regents of N.M. Coll. of Agric. & Mech. Arts v. Academy of Aviation, Inc.,
1971-NMSC-087, 83 N.M. 86, 488 P.2d 343.

Failure to strictly comply does not invalidate where required shares consent. -- A
failure to adhere to statutory procedure will not invalidate a transaction with a stranger
to a corporation where in fact the required two-thirds shares of the corporation entitled
to vote have consented to the transaction. Regents of N.M. Coll. of Agric. & Mech. Arts
v. Academy of Aviation, Inc., 1971-NMSC-087, 83 N.M. 86, 488 P.2d 343.

Law reviews. -- Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253
(1987).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2654 to
2679.

Constitutionality, construction, and effect of statutory or charter provisions relating to
sale of all, or substantially all, of assets of corporation or division or distribution of the
proceeds, 79 A.L.R. 624.

Applicability of statutes regulating sale of assets or property as affected by purpose or
character of corporation, 9 A.L.R.2d 1306.

Who may assert invalidity of sale, mortgage, or other disposition of corporate property
without approval of stockholders, 58 A.L.R.2d 784.

Duty of corporate directors to exercise "informed" judgment in recommending
responses to merger or tender offers, 46 A.L.R.4th 887.

"Golden parachute" defense to hostile corporate takeover, 66 A.L.R.4th 138.

Lockup option defense to hostile corporate takeover, 66 A.L.R.4th 180.
19 C.J.S. Corporations §§ 792 to 810.

53-15-3. Right of shareholders to dissent and obtain payment for
shares.

    A. Any shareholder of a corporation may dissent from, and obtain payment for the
shareholder's shares in the event of, any of the following corporate actions:

         (1) any plan of merger or consolidation to which the corporation is a party,
except as provided in Subsection C of this section;

         (2) any sale or exchange of all or substantially all of the property and assets
of the corporation not made in the usual and regular course of its business, including a
sale in dissolution, but not including a sale pursuant to an order of a court having
jurisdiction in the premises or a sale for cash on terms requiring that all or substantially
all of the net proceeds of sale be distributed to the shareholders in accordance with their
respective interests within one year after the date of sale;

         (3) any plan of exchange to which the corporation is a party as the
corporation the shares of which are to be acquired;

         (4) any amendment of the articles of incorporation which materially and
adversely affects the rights appurtenant to the shares of the dissenting shareholder in
that it:

             (a) alters or abolishes a preferential right of such shares;

             (b) creates, alters or abolishes a right in respect of the redemption of such
shares, including a provision respecting a sinking fund for the redemption or repurchase
of such shares;

             (c) alters or abolishes an existing preemptive right of the holder of such
shares to acquire shares or other securities; or

             (d) excludes or limits the right of the holder of such shares to vote on any
matter, or to cumulate his votes, except as such right may be limited by dilution through
the issuance of shares or other securities with similar voting rights; or

         (5) any other corporate action taken pursuant to a shareholder vote with
respect to which the articles of incorporation, the bylaws or a resolution of the board of
directors directs that dissenting shareholders shall have a right to obtain payment for
their shares.

    B. (1) A record holder of shares may assert dissenters' rights as to less than all of
the shares registered in his name only if the holder dissents with respect to all the
shares beneficially owned by any one person and discloses the name and address of
the person or persons on whose behalf the holder dissents. In that event, his rights shall
be determined as if the shares as to which he has dissented and his other shares were
registered in the names of different shareholders.

         (2) A beneficial owner of shares who is not the record holder may assert
dissenters' rights with respect to shares held on his behalf, and shall be treated as a
dissenting shareholder under the terms of this section and Section 53-15-4 NMSA 1978
if he submits to the corporation at the time of or before the assertion of these rights a
written consent of the record holder.

    C. The right to obtain payment under this section shall not apply to the shareholders
of the surviving corporation in a merger if a vote of the shareholders of such corporation
is not necessary to authorize such merger.

    D. A shareholder of a corporation who has a right under this section to obtain
payment for his shares shall have no right at law or in equity to attack the validity of the
corporate action that gives rise to his right to obtain payment, nor to have the action set
aside or rescinded, except when the corporate action is unlawful or fraudulent with
regard to the complaining shareholder or to the corporation.

History: 1953 Comp., § 51-28-3, enacted by Laws 1967, ch. 81, § 77; 1975, ch. 64, §
36; 1983, ch. 304, § 60.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 80 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, added "and obtain payment for shares"
at the end of the catchline, inserted "and obtain payment for the shareholder's shares in
the event of" in the introductory language of Subsection A, inserted "except as provided
in Subsection C of this section" in Paragraph (1) of Subsection A, added Paragraphs (3)
to (5) of Subsection A, designated former Subsection B as present Paragraph (1) of
Subsection B, rewrote the first sentence of Paragraph (1) of Subsection B, which
formerly read: "A shareholder may dissent as to less than all of the shares registered in
his name," added Paragraph (2) of Subsection B, substituted "The right to obtain
payment under" for "The provisions of" at the beginning of Subsection C, and added
Subsection D.

Duty of majority shareholder. -- A majority shareholder, as well as an officer or
director of a close corporation, when purchasing the stock of a minority shareholder,
has a fiduciary duty to disclose material facts affecting the value of the stock which are
known to the purchasing shareholder, officer or director by virtue of their position, but
not known to the selling shareholder. Walta v. Gallegos Law Firm, P.C., 2002-NMCA-
015, 131 N.M. 544, 40 P.3d 449, cert. denied, 131 N.M. 619, 41 P.3d 345.
Appraisal is not exclusive remedy. -- Where the interest of a non-controlling
shareholder in a closely-held corporation is eliminated by the controlling shareholders
through the use of a freeze out merger transaction, the determination of the fair cash
value of the non-controlling shareholder's shares in an appraisal proceeding does not
provide the exclusive remedy and does not eliminate common law actions for breach of
fiduciary duty. McMinn v. MBF Operating Acquisition Corp., 2007-NMSC-040, 142 N.M.
160, 164 P.3d 41.

Where plaintiff, who was a shareholder in a corporation that had been merged out of
existence, claimed that the merger was unfair and resulted in an unfair share price paid
to shareholders because the directors of the corporation breached fiduciary duties by
engaging in self-interested negotiations with potential buyers of the corporation,
devaluing the corporation for personal gain, and conducting unfair and misleading
voting processes, plaintiff's claim fell within the exception for unlawful or fraudulent
corporate action. Rael v. Page, 2009-NMCA-123, 147 N.M. 306, 222 P.3d 678, cert.
denied, 2009-NMCERT-009, 147 N.M. 421, 224 P.3d 648.

Right of appraisal not adequate. -- Where plaintiff, who was a shareholder in a
corporation that had been merged out of existence, claimed that the merger was unfair
and resulted in an unfair share price paid to shareholders because the directors of the
corporation breached fiduciary duties by engaging in self-interested negotiations with
potential buyers of the corporation, devaluing the corporation for personal gain, and
conducting unfair and misleading voting processes, plaintiff's claim should not have
been dismissed because, to the extent plaintiff had been injured as alleged, mere
valuation would not, as a matter of law, provide adequate redress. Rael v. Page, 2009-
NMCA-123, 147 N.M. 306, 222 P.3d 678, cert. denied, 2009-NMCERT-009, 147 N.M.
421, 224 P.3d 648.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

For article, "Too Close for Comfort: Minority Shareholder Litigation Against Close
Corporations after McMinn v. MBF Operating Acquisition Corp. and The Peters Corp. v.
N.M. Banquest Investors Corp.," see 39 N.M. L. Rev. 319 (2009).

For note, "The Fiduciary Duties Owed in a New Mexico Closely Held Corporation: Walta
v. Gallegos Law Firm, P.C.," see 34 N.M. L. R.ev. 181 (2004)

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations § 836; 19
Am. Jur. 2d Corporations §§ 2574, 2582 to 2586.

19 C.J.S. Corporations §§ 799 to 801.
53-15-4. Rights of dissenting shareholders.

    A. Any shareholder electing to exercise his right of dissent shall file with the
corporation, prior to or at the meeting of shareholders at which the proposed corporate
action is submitted to a vote, a written objection to the proposed corporate action. If the
proposed corporate action is approved by the required vote and the shareholder has not
voted in favor thereof, the shareholder may, within ten days after the date on which the
vote was taken or if a corporation is to be merged without a vote of its shareholders into
another corporation any of its shareholders may, within twenty-five days after the plan of
the merger has been mailed to the shareholders, make written demand on the
corporation, or, in the case of a merger or consolidation, on the surviving or new
corporation, domestic or foreign, for payment of the fair value of the shareholder's
shares, and, if the proposed corporate action is effected, the corporation shall pay to the
shareholder, upon the determination of the fair value, by agreement or judgment as
provided herein, and, in the case of shares represented by certificates, the surrender of
such certificates the fair value thereof as of the day prior to the date on which the vote
was taken approving the proposed corporate action, excluding any appreciation or
depreciation in anticipation of the corporate action. Any shareholder failing to make
demand within the prescribed ten-day or twenty-five-day period shall be bound by the
terms of the proposed corporate action. Any shareholder making such demand shall
thereafter be entitled only to payment as in this section provided and shall not be
entitled to vote or to exercise any other rights of a shareholder.

    B. No such demand may be withdrawn unless the corporation consents thereto. If,
however, the demand is withdrawn upon consent, or if the proposed corporate action is
abandoned or rescinded or the shareholders revoke the authority to effect the action, or
if, in the case of a merger, on the date of the filing of the articles of merger the surviving
corporation is the owner of all the outstanding shares of the other corporation, domestic
and foreign, that are parties to the merger, or if no demand or petition for the
determination of fair value by a court has been made or filed within the time provided in
this section, or if a court of competent jurisdiction determines that the shareholder is not
entitled to the relief provided by this section, then the right of the shareholder to be paid
the fair value of his shares ceases and his status as a shareholder shall be restored,
without prejudice, to any corporate proceedings which may have been taken during the
interim.

    C. Within ten days after such corporate action is effected, the corporation, or, in the
case of a merger or consolidation, the surviving or new corporation, domestic or foreign,
shall give written notice thereof to each dissenting shareholder who has made demand
as provided in this section and shall make a written offer to each such shareholder to
pay for such shares at a specified price deemed by the corporation to be the fair value
thereof. The notice and offer shall be accompanied by a balance sheet of the
corporation, the shares of which the dissenting shareholder holds, as of the latest
available date and not more than twelve months prior to the making of the offer, and a
profit and loss statement of the corporation for the twelve-months' period ended on the
date of the balance sheet.
    D. If within thirty days after the date on which the corporate action was effected the
fair value of the shares is agreed upon between any dissenting shareholder and the
corporation, payment therefor shall be made within ninety days after the date on which
the corporate action was effected, and, in the case of shares represented by
certificates, upon surrender of the certificates. Upon payment of the agreed value, the
dissenting shareholder shall cease to have any interest in the shares.

    E. If, within the period of thirty days, a dissenting shareholder and the corporation
do not so agree, then the corporation, within thirty days after receipt of written demand
from any dissenting shareholder, given within sixty days after the date on which
corporate action was effected, shall, or at its election at any time within the period of
sixty days may, file a petition in any court of competent jurisdiction in the county in this
state where the registered office of the corporation is located praying that the fair value
of the shares be found and determined. If, in the case of a merger or consolidation, the
surviving or new corporation is a foreign corporation without a registered office in this
state, the petition shall be filed in the county where the registered office of the domestic
corporation was last located. If the corporation fails to institute the proceeding as
provided in this section, any dissenting shareholder may do so in the name of the
corporation. All dissenting shareholders, wherever residing, shall be made parties to the
proceeding as an action against their shares quasi in rem. A copy of the petition shall be
served on each dissenting shareholder who is a resident of this state and shall be
served by registered or certified mail on each dissenting shareholder who is a
nonresident. Service on nonresidents shall also be made by publication as provided by
law. The jurisdiction of the court shall be plenary and exclusive. All shareholders who
are parties to the proceeding shall be entitled to judgment against the corporation for
the amount of the fair value of their shares. The court may, if it so elects, appoint one or
more persons as appraisers to receive evidence and recommend a decision on the
question of fair value. The appraisers shall have such power and authority as specified
in the order of their appointment or on an amendment thereof. The judgment shall be
payable to the holders of uncertificated shares immediately, but to the holders of shares
represented by certificates only upon and concurrently with the surrender to the
corporation of certificates. Upon payment of the judgment, the dissenting shareholder
ceases to have any interest in the shares.

    F. The judgment shall include an allowance for interest at such rate as the court
may find to be fair and equitable, in all the circumstances, from the date on which the
vote was taken on the proposed corporate action to the date of payment.

    G. The costs and expenses of any such proceeding shall be determined by the court
and shall be assessed against the corporation, but all or any part of the costs and
expenses may be apportioned and assessed as the court deems equitable against any
or all of the dissenting shareholders who are parties to the proceeding to whom the
corporation made an offer to pay for the shares if the court finds that the action of the
shareholders in failing to accept the offer was arbitrary or vexatious or not in good faith.
Such expenses include reasonable compensation for and reasonable expenses of the
appraisers, but exclude the fees and expenses of counsel for and experts employed by
any party; but if the fair value of the shares as determined materially exceeds the
amount which the corporation offered to pay therefor, or if no offer was made, the court
in its discretion may award to any shareholder who is a party to the proceeding such
sum as the court determines to be reasonable compensation to any expert employed by
the shareholder in the proceeding, together with reasonable fees of legal counsel.

    H. Upon receiving a demand for payment from any dissenting shareholder, the
corporation shall make an appropriate notation thereof in its shareholder records. Within
twenty days after demanding payment for his shares, each holder of shares represented
by certificates demanding payment shall submit the certificates to the corporation for
notation thereon that such demand has been made. His failure to do so shall, at the
option of the corporation, terminate his rights under this section unless a court of
competent jurisdiction, for good and sufficient cause shown, otherwise directs. If
uncertificated shares for which payment has been demanded or shares represented by
a certificate on which notation has been so made is [are] transferred, any new certificate
issued therefor shall bear similar notation, together with the name of the original
dissenting holder of the shares, and a transferee of the shares acquires by such transfer
no rights in the corporation other than those which the original dissenting shareholder
had after making demand for payment of the fair value thereof.

    I. Shares acquired by a corporation pursuant to payment of the agreed value
therefor or to payment of the judgment entered therefor, as in this section provided, may
be held and disposed of by the corporation as in the case of other treasury shares,
except that, in the case of a merger or consolidation, they may be held and disposed of
as the plan of merger or consolidation may otherwise provide.

History: 1953 Comp., § 51-28-4, enacted by Laws 1967, ch. 81, § 78; 1983, ch. 304, §
61.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 81 of the ABA Model
Business Corporation Act.

Cross references. -- For definition of "shares", see 53-11-2D NMSA 1978.

The 1983 amendment, effective June 17, 1983, substituted "upon the determination . . .
surrender of such certificates" for "upon surrender of the certificate or certificates
representing the shares" near the end of the second sentence of Subsection A,
substituted "corporation" for "corporations" preceding "domestic" near the middle of the
last sentence of Subsection B, substituted "provided in this section" for "herein
provided" near the middle of the first sentence of Subsection C, inserted "and, in the
case of shares represented by certificates," near the end of the first sentence of
Subsection D, substituted "certificates" for "certificate or certificates representing such
shares" at the end of the first sentence of Subsection D, substituted "fails" for "shall fail"
and substituted "provided in this section" for "herein provided" in the third sentence of
Subsection E, deleted "shall be" preceding "specified" and inserted "on" preceding "an
amendment" in the tenth sentence of Subsection E, inserted "to the holders of
uncertificated shares immediately, but to the holders of shares represented by
certificates" and substituted "certificates" for "the certificate or certificates representing
such shares" in the eleventh sentence of Subsection E, substituted "ceases" for "shall
cease" in the last sentence of Subsection E, substituted "deems" for "may deem" and
"finds" for "shall find" in the first sentence of Subsection G, deleted "shall" preceding
"exclude the fees," substituted "determines" for "may determine" and deleted "or
experts" following "expert" in the second sentence of Subsection G, added the present
first sentence of Subsection H, substituted "holder of shares represented by certificates"
for "shareholder" and substituted "certificates" for "certificate or certificates representing
his shares," and deleted "shall" preceding "otherwise directs" in the second sentence of
Subsection H, and inserted "uncertificated" preceding "shares" and inserted "for which
payment has been demanded or shares" following "shares" in the last sentence of
Subsection H and made other minor changes.

Disgorgement of profits and punitive damages. -- Where a shareholder
representative breached his fiduciary duty under a shareholder agreement to dissenting
shareholders; the dissenting shareholders did not suffer any damages; and the breach
was not malicious, the dissenting shareholders were not entitled to disgorgement of
profits and punitive damages in addition to the appraised fair value of their shares. The
Peters Corp. v. N.M. Banquest Investors Corp., 2008-NMSC-039, 144 N.M. 434, 188
P.3d 1185, aff'g 2007-NMCA-065, 141 N.M. 632, 159 P.3d 1117.

Control premium not justified. -- The court did not err in refusing to add a control
premium to the value of dissenting shareholder's shares where although the dissenting
shareholders were part of the control group in virtue of a shareholder's agreement, they
were minority shareholders in the control group and within the corporation as a whole;
pursuant to the shareholder agreement, the dissenting shareholders had delegated all
decisions to one shareholder who was not a dissenting shareholder; under the
shareholder agreement, each shareholder had a veto power over whether all signatory
shareholders could purchase their pro rata part of shares before they were offered to a
third party; and the fair value arrived at by the court did not impose any minority
discount that required an off-set by a control premium. N.M. Banquest Investors Corp. v.
The Peters Corp., 2007-NMCA-065, 141 N.M. 632, 159 P.3d 1117, aff'd, 2008-NMSC-
039, 144 N.M. 188, 188 P.3d 1185.

Breach of fiduciary duty not an exception to exclusivity of the appraisal method.
-- Where a shareholder representative breached his fiduciary duty under a shareholder
agreement to dissenting shareholders by failing to notify them that a controlling
shareholder intended to sell its shares prior to sending out proxy material, while the
shareholder representative did inform some other shareholders and the corporate board
of directors, the breach did not fall outside the exclusivity of the appraisal remedy, for
fraud or illegality. N.M. Banquest Investors Corp. v. The Peters Corp., 2007-NMCA-065,
141 N.M. 632, 159 P.3d 1117, aff'd, 2008-NMSC-039, 144 N.M. 188, 188 P.3d 1185.
The court may award compound interest on the fair value of dissenting shareholder
shares. N.M. Banquest Investors Corp. v. The Peters Corp., 2007-NMCA-065, 141 N.M.
632, 159 P.3d 1117, aff'd, 2008-NMSC-039, 144 N.M. 188, 188 P.3d 1185.

Exclusive remedy. -- In the absence of fraud or illegality, the statutory right to obtain
an appraisal of the fair value of stock is the exclusive remedy against a corporation by a
shareholder who dissents from a proposed merger. McMinn v. MBF Operating
Acquisition Corp., 2006-NMCA-049, 139 N.M. 419, 133 P.3d 875, cert. granted, 2006-
NMCERT-004, 139 N.M. 429, 134 P.3d 120, rev'd, 2007-NMSC-040, 142 N.M. 160, 164
P.3d 41.

No right to jury trial. -- There is no statutory or constitutional right to a jury in a
proceeding brought by a dissenting shareholder based on the right to an appraisal of
the value of a dissenting shareholder's stock for stock valuation created by the
legislature. Smith v. First Alamogordo Bancorp., Inc., 1992-NMCA-095, 114 N.M. 340,
838 P.2d 494, cert. denied, 114 N.M. 314, 838 P.2d 468.

Determination of pre-sale value. -- In an action by a dissenting shareholder seeking a
valuation of his stock, the court erred when it held that a pretrial statement regarding
stock share value was binding on the parties and that the stipulation in the statement as
to the value of the shares on the day the dissenting shareholder terminated his
employment also stipulated the pre-sale value for purposes of application of this
section. The court should have permitted defendants to introduce evidence on the value
of the stock the day before the corporate sale. Morrow v. Cooper, 1991-NMCA-108, 113
N.M. 246, 824 P.2d 1048.

Section does not specify how shares valued. -- This section does not specify the
method by which the court should determine fair value of shares of dissenting
stockholders. Tome Land & Improvement Co. v. Silva, 1972-NMSC-004, 83 N.M. 549,
494 P.2d 962.

Market value of stock is generally the base price at which a stock could be sold by a
willing, informed seller to an informed, willing buyer. Tome Land & Improvement Co. v.
Silva, 1972-NMSC-004, 83 N.M. 549, 494 P.2d 962.

Elements of valuation. -- In arriving at the fair value of the shares of dissenting
stockholders, courts have been almost unanimous in using a combination of three
elements of valuation: (1) net asset value; (2) market value, and (3) investment or
earnings value. Tome Land & Improvement Co. v. Silva, 1972-NMSC-004, 83 N.M. 549,
494 P.2d 962.

Use of appraisers. -- The appraiser has discretion in determining market, asset and
investment value of shares of dissenting stockholders, but the appraiser's valuation is
then subject to review by the trial court to determine whether it is supported upon
reasonable grounds and if the appraiser's valuation is not so supported, the trial court
may substitute its own calculation of any or all of the factors. Tome Land &
Improvement Co. v. Silva, 1972-NMSC-004, 83 N.M. 549, 494 P.2d 962.

Award of interest. -- The statute places the awarding of interest within the discretion
of the court, and the court did not abuse its discretion by awarding 6% interest because
such conclusion is supported by substantial evidence. Tome Land & Improvement Co.
v. Silva, 1972-NMSC-004, 83 N.M. 549, 494 P.2d 962.

When attorney's and expert's fees awarded. -- Under this section, once the court
determines that the fair value materially exceeds the amount which the corporation has
offered for the shares, it may, in its discretion, award what it may determine to be
reasonable compensation by way of expert fees and attorney's fees, but it may not
award only expert fees and not attorney's fees if the shareholder has employed both an
expert and an attorney in the proceeding. Tome Land & Improvement Co. v. Silva,
1972-NMSC-004, 83 N.M. 549, 494 P.2d 962.

Fee contract evidence of reasonable attorney's fee. -- A contingent fee contract
between dissenting shareholders and their attorney is properly admissible so long as its
effect is limited to being simply an item of evidence having some probative value in
resolving the issue of the amount of a reasonable attorney's fee to be allowed
dissenters, to be weighed and taken into account with all of the other evidence bearing
on that question. Tome Land & Improvement Co. v. Silva, 1973-NMSC-120, 86 N.M. 87,
519 P.2d 1024.

Fee awarded to dissenting shareholders. -- Subsection G of this section provides
not only that the amount of the fee is to be reasonable, but that it is to be awarded to the
dissenting shareholders, not to their attorney. Therefore defendant is not entitled to
credit for amounts paid or to be paid by dissenting shareholders to their attorney under
contingent fee contract. Tome Land & Improvement Co. v. Silva, 1973-NMSC-120, 86
N.M. 87, 519 P.2d 1024.

No jurisdiction over fee paid to dissenters' attorney. -- The trial court is without
jurisdiction to fix the amount to be paid by dissenters to their attorney under contingent
fee contract or pass upon the reasonableness of such amounts. Amount could be more
than, the same as or less than the amount found by the court to be reasonable under
the statute. Tome Land & Improvement Co. v. Silva, 1973-NMSC-120, 86 N.M. 87, 519
P.2d 1024.

Jurisdiction in judicial proceedings. -- Subsection E prescribes venue, not
jurisdiction and does not limit the jurisdiction for actions brought under this section to
one judicial district only. Thus where defendants did not plead improper venue in an
action brought by a dissenting shareholder in a county other than that where the
corporation's registered office was located, defendants waived the issue and could not
have the action dismissed on the alternative grounds of lack of jurisdiction. Morrow v.
Cooper, 1991-NMCA-108, 113 N.M. 246, 824 P.2d 1048.
Law reviews. -- For article, "1983 Amendments to the New Mexico Business
Corporation Act and Related Statutes," see 14 N.M.L. Rev. 371 (1984).

For article, "Too Close for Comfort: Minority Shareholder Litigation Against Close
Corporations after McMinn v. MBF Operating Acquisition Corp. and The Peters Corp. v.
N.M. Banquest Investors Corp.," see 39 N.M. L. Rev. 319 (2009).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations § 836; 19
Am. Jur. 2d Corporations §§ 2574, 2582 to 2586.

Who may assert invalidity of sale, mortgage, or other disposition of corporate property
without approval of stockholders, 58 A.L.R.2d 784.

Timeliness and sufficiency of dissenting stockholder's notice of his objection to
consolidation or merger and of his demand for payment for his shares, 40 A.L.R.3d 260.

Valuation of stock of dissenting stockholders in case of sale of corporate assets, 48
A.L.R.3d 430.

19 C.J.S. Corporations §§ 799 to 801.

ARTICLE 16
Business Corporations; Dissolution of Corporations

53-16-1. Voluntary dissolution by incorporators.

    A corporation that has or has not commenced business and has not issued any
shares may be voluntarily dissolved by its incorporators in the following manner:

    A. articles of dissolution shall be executed by a majority of the incorporators and
shall set forth:

         (1) the name of the corporation;

         (2) the date of issuance of its certificate of incorporation;

         (3) that none of its shares has been issued;

         (4) that the corporation has or has not commenced business;

         (5) that the amount, if any, actually paid in on subscriptions for its shares, less
any part thereof disbursed for necessary expenses, has been returned to those entitled
thereto;

         (6) that no debts of the corporation remain unpaid; and
         (7) that a majority of the incorporators elect that the corporation be dissolved;

    B. the original of the articles of dissolution together with a copy, which may be
signed, photocopied or conformed, shall be delivered to the commission [secretary of
state]. If the commission [secretary of state] finds that the articles of dissolution conform
to law and that the corporation has complied with the Tax Administration Act [Chapter 7,
Article 1 NMSA 1978] and has paid all contributions required by the Unemployment
Compensation Law [Chapter 51 NMSA 1978], it shall, when all fees have been paid:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing;

         (2) file the original in its office; and

         (3) issue a certificate of dissolution to which it shall affix the file-stamped
copy; and

    C. the certificate of dissolution, together with the file-stamped copy of the articles of
dissolution affixed to it, shall be returned by the commission [secretary of state] to the
incorporators or their representative. Upon the issuance of the certificate of dissolution
by the commission [secretary of state] the existence of the corporation shall cease.

History: 1953 Comp., § 51-29-1, enacted by Laws 1967, ch. 81, § 79; 1975, ch. 64, §
37; 2001, ch. 200, § 58; 2003, ch. 318, § 38.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 82 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, inserted "or has" following "corporation
that has" in the introductory paragraph and deleted "and franchise taxes" near the end
of Subsection B.
The 2001 amendment, effective July 1, 2001, deleted the provision that the articles of
dissolution be executed in duplicate and changed the provisions of the section so that
instead of explaining the procedures for processing duplicates, it explains procedures
for processing the original and a copy of the original.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2733 to
2736, 2740, 2741, 2746.

19 C.J.S. Corporations §§ 837 to 839.

53-16-2. Voluntary dissolution by consent of shareholders.

    A corporation may be voluntarily dissolved by the written consent of all of its
shareholders. Upon the execution of the written consent, a statement of intent to
dissolve shall be executed by the corporation by an authorized officer, which statement
shall set forth:

    A. the name of the corporation;

    B. the names and respective addresses of its officers;

    C. the names and respective addresses of its directors;

    D. a copy of the written consent signed by all shareholders of the corporation; and

    E. a statement that the written consent has been signed by all shareholders of the
corporation or signed in their names by their attorneys in fact authorized to consent on
their behalf.

History: 1953 Comp., § 51-29-2, enacted by Laws 1967, ch. 81, § 80; 2001, ch. 200, §
59.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 83 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, in Subsection A, deleted "in duplicate"
following "shall be executed", substituted "an authorized officer" for "its chairman of the
board, president or vice president and by its secretary or assistant secretary and
verified by one of the officers signing the articles"; and substituted "in fact thereunto duly
authorized" for "in fact authorized to consent on their behalf".

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2736,
2748, 2750 to 2753, 2786.

Relief other than by dissolution in cases of intracorporate deadlock or dissension, 34
A.L.R.4th 13.

19 C.J.S. Corporations §§ 837 to 839.

53-16-3. Voluntary dissolution by act of corporation.

    A corporation may be dissolved by the act of the corporation, when authorized in the
following manner:

    A. the board of directors shall adopt a resolution recommending that the corporation
be dissolved and directing that the question of dissolution be submitted to a vote at a
meeting of shareholders, which may be either an annual or a special meeting;

    B. written notice shall be given to each shareholder of record entitled to vote at the
meeting within the time and in the manner provided in the Business Corporation Act for
the giving of notice of meetings of shareholders and, whether the meeting is an annual
or special meeting, shall state that the purpose, or one of the purposes, of the meeting
is to consider the advisability of dissolving the corporation;

    C. at the meeting, a vote of shareholders entitled to vote shall be taken on a
resolution to dissolve the corporation, and the resolution shall be adopted upon
receiving the affirmative vote of the holders of a majority of the shares of the corporation
entitled to vote on the resolution, unless any class of shares is entitled to vote on it as a
class, in which event the resolution shall be adopted upon receiving the affirmative vote
of the holders of a majority of the shares of each class of shares entitled to vote on it as
a class and of the total shares entitled to vote on the resolution; and

    D. upon the adoption of the resolution, a statement of intent to dissolve shall be
executed by the corporation by an authorized officer, which statement shall set forth:

         (1) the name of the corporation;

         (2) the names and respective addresses of its officers;

         (3) the names and respective addresses of its directors;

         (4) a copy of the resolution adopted by the shareholders authorizing the
dissolution of the corporation;
         (5) the number of shares outstanding and, if the shares of any class are
entitled to vote as a class, the designation and number of outstanding shares of each
such class; and

         (6) the number of shares voted for and against the resolution, respectively,
and, if the shares of any class are entitled to vote as a class, the number of shares of
each such class for and against the resolution, respectively.

History: 1953 Comp., § 51-29-3, enacted by Laws 1967, ch. 81, § 81; 1983, ch. 304, §
62; 2001, ch. 200, § 60.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 84 of the ABA Model
Business Corporation Act.

Cross references. -- For applicability of lowered voting requirements to existing
corporations, see 53-18-6.1 NMSA 1978.

The 2001 amendment, effective July 1, 2001, in Subsection D, deleted the provision
that the statement of intent to dissolve be executed in duplicate and substituted "an
authorized officer" for "its chairman of the board, president or vice president and by its
secretary or assistant secretary and verified by one of the officers signing the articles".

The 1983 amendment, effective June 17, 1983, deleted "thereat" preceding "shall be
taken" in the first sentence of Subsection C and substituted "a majority" for "two-thirds"
in two places in the last sentence of Subsection C, and added "and" at the end of
Subsection C.

Law reviews. -- Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253
(1987).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2736,
2748, 2751, 2754 to 2756.

Dissolution of corporation on grounds of intracorporate deadlock or dissension, 83
A.L.R.3d 458.

Relief other than by dissolution in cases of intracorporate deadlock or dissension, 34
A.L.R.4th 13.

Liability of shareholders, directors, and officers where corporate business is continued
after its dissolution, 72 A.L.R.4th 419.

19 C.J.S. Corporations §§ 837 to 839.
53-16-4. Filing statement of intent to dissolve.

    An original and a copy, which may be a photocopy of the original after it was signed
or a photocopy that is conformed to the original, of the statement of intent to dissolve,
whether by consent of shareholders or by act of the corporation, shall be delivered to
the commission [secretary of state]. If the commission [secretary of state] finds that the
statement conforms to law, it shall:

    A. endorse on the original and copy the word "filed" and the month, day and year of
the filing;

    B. file the original in its office; and

    C. return the copy to the corporation or its representative.

History: 1953 Comp., § 51-29-4, enacted by Laws 1967, ch. 81, § 82; 1983, ch. 31, § 1;
2003, ch. 318, § 39.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 85 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, substituted "An original and a copy,
which may be a photocopy of the original after it was signed or a photocopy that is
conformed to the original" for "Duplicate originals" at the beginning of the introductory
paragraph; substituted "the original and copy" for "each of the duplicate originals" in
Subsection A; substituted "the original" for "one of the duplicate originals" in Subsection
B; substituted "copy" for "other duplicate original" in Subsection C.

The 1983 amendment, effective June 17, 1983, deleted "when all fees and franchise
taxes have been paid" at the end of the second sentence in the introductory language.

53-16-5. Effect of statement of intent to dissolve.
    Upon the filing by the commission [secretary of state] of a statement of intent to
dissolve, whether by consent of shareholders or by act of the corporation, the
corporation shall cease to carry on its business, except insofar as necessary for the
winding up thereof, but its corporate existence shall continue until a certificate of
dissolution has been issued by the commission [secretary of state] or until a decree
dissolving the corporation has been entered by a court of competent jurisdiction as
provided in the Business Corporation Act.

History: 1953 Comp., § 51-29-5, enacted by Laws 1967, ch. 81, § 83.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 86 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations § 2834,
2880 to 2883.

Conduct of affairs of corporation after its dissolution or expiration or forfeiture of its
charter, 47 A.L.R. 1288, 97 A.L.R. 477.

Stockholders' rights to patent, copyright, or trademark owned by corporation on
dissolution thereof, 30 A.L.R.2d 938.

Maintainability of criminal proceedings against dissolved corporation, 40 A.L.R.2d 1396.

Service of process upon dissolved domestic corporation in absence of express statutory
direction, 75 A.L.R.2d 1399.

Availability of and time for bringing action against former director, officer, or stockholder
in dissolved corporation for personal injuries incurred after final dissolution, 20 A.L.R.4th
414.
Liability of dissolved corporation or corporation that forfeited charter in action pursuant
to Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA)(42 USCS §§ 9601-9675), 123 A.L.R. Fed. 461.

19 C.J.S. Corporations § 814.

53-16-6. Procedure after filing of statement of intent to dissolve.

    After the filing by the commission [secretary of state] of a statement of intent to
dissolve, the corporation:

    A. shall immediately cause notice thereof to be mailed to each known creditor of the
corporation;

    B. shall proceed to collect its assets, convey and dispose of such of its properties as
are not to be distributed in kind to its shareholders, pay, satisfy and discharge its
liabilities and obligations and do all other acts required to liquidate its business and
affairs, and, after paying or adequately providing for the payment of all its obligations,
distribute the remainder of its assets, either in cash or in kind, among its shareholders
according to their respective rights and interests; and

    C. at any time during the liquidation of its business and affairs, may make
application to a court of competent jurisdiction within the county in which the registered
office or principal place of business of the corporation is situated, to have the liquidation
continued under the supervision of the court as provided in the Business Corporation
Act.

History: 1953 Comp., § 51-29-6, enacted by Laws 1967, ch. 81, § 84.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 87 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 C.J.S. Corporations §§ 837 to 839.
53-16-7. Revocation of voluntary dissolution proceedings by
consent of shareholders.

    By the written consent of all of its shareholders, a corporation may, at any time prior
to the issuance of a certificate of dissolution by the commission [secretary of state],
revoke voluntary dissolution proceedings. Upon the execution of the written consent, a
statement of revocation of voluntary dissolution proceedings shall be executed by the
corporation by an authorized officer, which statement shall set forth:

    A. the name of the corporation;

    B. the names and respective addresses of its officers;

    C. the names and respective addresses of its directors;

    D. a copy of the written consent signed by all shareholders of the corporation
revoking the voluntary dissolution proceedings; and

    E. that the written consent has been signed by all shareholders of the corporation or
signed in their names by their authorized attorneys.

History: 1953 Comp., § 51-29-7, enacted by Laws 1967, ch. 81, § 85; 2001, ch. 200, §
61.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 88 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, in the introductory language, deleted the
provision that the revocation of voluntary dissolution proceedings be executed in
duplicate and substituted "an authorized officer" for "its chairman of the board, president
or vice president and by its secretary or assistant secretary and verified by one of the
officers signing the articles".
53-16-8. Revocation of voluntary dissolution proceedings by act of
corporation.

    By the act of the corporation, a corporation may, at any time prior to the issuance of
a certificate of dissolution by the commission [secretary of state], revoke voluntary
dissolution proceedings taken, in the following manner:

    A. the board of directors shall adopt a resolution recommending that the voluntary
dissolution proceedings be revoked and directing that the question of revocation be
submitted to a vote at a special meeting of shareholders;

    B. written notice stating that the purpose or one of the purposes of the meeting is to
consider the advisability of revoking the voluntary dissolution proceedings shall be given
to each shareholder of record entitled to vote at the meeting within the time and in the
manner provided in the Business Corporation Act for the giving of notice of special
meetings of shareholders;

    C. at the meeting, a vote of the shareholders entitled to vote shall be taken on a
resolution to revoke the voluntary dissolution proceedings, which shall require for its
adoption the affirmative vote of the holders of a majority of the shares entitled to vote
thereon; and

    D. upon the adoption of the resolution, a statement of revocation of voluntary
dissolution proceedings shall be executed by the corporation by an authorized officer,
which statement shall set forth:

         (1) the name of the corporation;

         (2) the names and respective addresses of its officers;

         (3) the names and respective addresses of its directors;

         (4) a copy of the resolution adopted by the shareholders revoking the
voluntary dissolution proceedings;

         (5) the number of shares outstanding; and

         (6) the number of shares voted for and against the resolution, respectively.

History: 1953 Comp., § 51-29-8, enacted by Laws 1967, ch. 81, § 86; 1983, ch. 304, §
63; 2001, ch. 200, § 62.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Cross references. -- For applicability of lowered voting requirements to existing
corporations, see 53-18-6.1 NMSA 1978.

Compiler's notes. -- This section is derived from Section 89 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, in Subsection D, deleted the provision
that the revocation of voluntary dissolution proceedings be executed in duplicate and
substituted "an authorized officer" for "its chairman of the board, president or vice
president and by its secretary or assistant secretary and verified by one of the officers
signing the articles".

The 1983 amendment, effective June 17, 1983, deleted "thereat" preceding "shall be
taken," and substituted "a majority" for "two-thirds" in Subsection C and added "and" at
the end of that subsection.

53-16-9. Filing statement of revocation of voluntary dissolution
proceedings.

    An original of the statement of revocation of voluntary dissolution proceedings,
whether by consent of shareholders or by act of the corporation, together with a copy,
which may be signed, photocopied or conformed, shall be delivered to the commission
[secretary of state]. If the commission [secretary of state] finds that the statement
conforms to law, it shall, when all fees have been paid:

    A. endorse on the original and copy the word "filed" and the month, day and year of
the filing;

    B. file the original in its office; and

    C. return the file-stamped copy to the corporation or its representative.

History: 1953 Comp., § 51-29-9, enacted by Laws 1967, ch. 81, § 87; 2001, ch. 200, §
63; 2003, ch. 318, § 40.

                                               ANNOTATIONS
Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 90 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, deleted "and franchise taxes" following
"fees" near the end of the introductory paragraph.

The 2001 amendment, effective July 1, 2001, deleted the provision that the statement
of revocation of voluntary dissolution proceedings be executed in duplicate and
changed the provisions of the section so that instead of explaining the procedures for
processing duplicates, it explains procedures for processing the original and a copy of
the original.

53-16-10. Effect of statement of revocation of voluntary dissolution
proceedings.

    Upon the filing by the commission [secretary of state] of a statement of revocation of
voluntary dissolution proceedings, whether by consent of shareholders or by act of the
corporation, the revocation of the voluntary dissolution proceedings shall become
effective and the corporation may again carry on its business.

History: 1953 Comp., § 51-29-10, enacted by Laws 1967, ch. 81, § 88.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.
Compiler's notes. -- This section is derived from Section 91 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- Reinstatement of repealed, forfeited,
expired, or suspended corporate charter as validating interim acts of corporation, 42
A.L.R.4th 392.

53-16-11. Articles of dissolution.

    If voluntary dissolution proceedings have not been revoked, then, when all debts,
liabilities and obligations of the corporation have been paid and discharged or adequate
provision has been made therefor and all of the remaining property and assets of the
corporation have been distributed to its shareholders, articles of dissolution shall be
executed by the corporation by an authorized officer, which statement shall set forth:

    A. the name of the corporation;

    B. that the secretary of state has previously filed a statement of intent to dissolve
the corporation and the date on which the statement was filed;

    C. that all debts, obligations and liabilities of the corporation have been paid and
discharged or that adequate provision has been made therefor;

    D. that all the remaining property and assets of the corporation have been
distributed among its shareholders in accordance with their respective rights and
interests;

    E. that there are no suits pending against the corporation in any court or that
adequate provision has been made for the satisfaction of any judgment, order or decree
that may be entered against it in any pending suit; and

    F. confirmation that the corporation has resigned as a registered agent or is not
currently a registered agent for any entity registered in New Mexico.

History: 1953 Comp., § 51-29-11, enacted by Laws 1967, ch. 81, § 89; 2001, ch. 200, §
64; 2019, ch. 159, § 3.

                                               ANNOTATIONS

The 2019 amendment, effective July 1, 2019, required articles of dissolution to include
confirmation that the corporation has resigned as a registered agent or is not currently a
registered agent for any entity registered in New Mexico; and added Subsection F.

Compiler's notes. -- This section is derived from Section 92 of the ABA Model
Business Corporation Act.
The 2001 amendment, effective July 1, 2001, deleted the provision that articles of
dissolution be executed in duplicate and substituted "an authorized officer" for "its
chairman of the board, president or vice president and by its secretary or assistant
secretary and verified by one of the officers signing the articles".

Pending lawsuit. -- Nothing in the New Mexico Business Corporation Act suggests
that the legislature intended that final claims have priority over contingent claims. Smith
v. Cox, 1992-NMSC-029, 113 N.M. 682, 831 P.2d 981.

53-16-12. Filing of articles of dissolution.

    A. An original of articles of dissolution together with a copy, which may be signed,
photocopied or conformed, shall be delivered to the commission [secretary of state]. If
the commission [secretary of state] finds that the articles of dissolution conform to law
and that the corporation has complied with the Tax Administration Act [Chapter 7,
Article 1 NMSA 1978] and has paid all contributions required by the Unemployment
Compensation Law [Chapter 51 NMSA 1978], it shall, when all fees have been paid:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing;

         (2) file the original in its office; and

         (3) issue a certificate of dissolution to which it shall affix the file-stamped
copy.

    B. The certificate of dissolution, together with the file-stamped copy of the articles of
dissolution affixed to it, shall be returned by the commission [secretary of state] to the
representative of the dissolved corporation. Upon the issuance of the certificate of
dissolution, the existence of the corporation shall cease, except for the purpose of suits,
other proceedings and appropriate corporate action by shareholders, directors and
officers as provided in the Business Corporation Act.

History: 1953 Comp., § 51-29-12, enacted by Laws 1967, ch. 81, § 90; 2001, ch. 200, §
65; 2003, ch. 318, § 41.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 93 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, deleted "and franchise taxes" following
"fees" near the end of Subsection A.

The 2001 amendment, effective July 1, 2001, deleted the provision that the articles of
dissolution be executed in duplicate and changed the provisions of the section so that
instead of explaining the procedures for processing duplicates, it explains procedures
for processing the original and a copy of the original.

53-16-13. Involuntary dissolution.

    A corporation may be dissolved involuntarily by a decree of the district court of Santa
Fe county in an action filed by the attorney general when it is established that the
corporation:

    A. procured its articles of incorporation through fraud; or

    B. has continued to exceed or abuse the authority conferred upon it by law.

History: 1953 Comp., § 51-29-13, enacted by Laws 1967, ch. 81, § 91.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 94 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2788 to
2827, 2879.

Relief other than by dissolution in cases of intracorporate deadlock or dissension, 34
A.L.R.4th 13.

Liability of shareholders, directors, and officers where corporate business is continued
after its dissolution, 72 A.L.R.4th 419.

19 C.J.S. Corporations §§ 811 to 882.

53-16-14. Notification to attorney general.

    The commission [secretary of state] shall certify to the attorney general, from time to
time, the names of all corporations which have given cause for dissolution as provided
by the Business Corporation Act, together with the facts pertinent thereto. Whenever the
commission [secretary of state] certifies the name of a corporation to the attorney
general as having given cause for dissolution, the commission [secretary of state] shall
concurrently mail to the corporation at its registered office a notice that the certification
has been made. Upon the receipt of the certification, the attorney general shall file an
action in the name of the state against the corporation for its dissolution.

History: 1953 Comp., § 51-29-14, enacted by Laws 1967, ch. 81, § 92.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 95 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2817,
2819.

53-16-15. Venue and process.

    Every action for the involuntary dissolution of a corporation shall be commenced by
the attorney general in the district court of Santa Fe county. Summons shall issue and
be served as in other civil actions. If process is returned not found, the attorney general
shall cause publication to be made as in other civil cases in some newspaper published
in the county where the registered office of the corporation is situated, containing a
notice of the pendency of the action, the title of the court, the title of the action and the
date on or after which default may be entered. The attorney general may include in one
notice the names of any number of corporations against which actions are then pending
in the same court. The attorney general shall cause a copy of the notice to be mailed to
the corporation at its registered office within ten days after the first publication thereof.
The certificate of the attorney general of the mailing of the notice is prima facie evidence
thereof. The notice shall be published at least once each week for two successive
weeks, and the first publication thereof may begin at any time after the summons has
been returned. Unless a corporation has been served with summons, no default shall be
taken against it earlier than thirty days after the first publication of the notice.
History: 1953 Comp., § 51-29-15, enacted by Laws 1967, ch. 81, § 93.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 96 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 C.J.S. Corporations § 841.

53-16-16. Jurisdiction of court to liquidate assets and business of
corporation.

    A. The district courts may liquidate the assets and business of a corporation:

         (1) in an action by a shareholder when it is established that:

             (a) the directors are deadlocked in the management of the corporate affairs
and the shareholders are unable to break the deadlock, and that irreparable injury to the
corporation is being suffered or is threatened by reason thereof; or

             (b) the acts of the directors or those in control of the corporation are illegal,
oppressive or fraudulent; or

             (c) the shareholders are deadlocked in voting power, and have failed, for a
period which includes at least two consecutive annual meeting dates, to elect
successors to directors whose terms have expired or would have expired upon the
election of their successors; or

             (d) the corporate assets are being misapplied or wasted;

         (2) in an action by a creditor:

             (a) when the claim of the creditor has been reduced to judgment and an
execution thereon returned unsatisfied and it is established that the corporation is
insolvent; or

             (b) when the corporation has admitted in writing that the claim of the creditor
is due and owing and it is established that the corporation is insolvent;

         (3) upon application by a corporation which has filed a statement of intent to
dissolve, as provided in the Business Corporation Act, to have its liquidation continued
under the supervision of the court; or

         (4) when an action has been filed by the attorney general to dissolve a
corporation and it is established that liquidation of its business and affairs should
precede the entry of a decree of dissolution.
    B. Proceedings under Subsections A(1), A(2) or A(3) of this section shall be brought
in the county in which the registered office or the principal office of the corporation is
situated.

    C. It is not necessary to make shareholders parties to any such action or proceeding
unless relief is sought against them personally.

History: 1953 Comp., § 51-29-16, enacted by Laws 1967, ch. 81, § 94.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 97 of the ABA Model
Business Corporation Act.

Jurisdiction of district court sitting in probate. -- District courts sitting in probate
possess general civil jurisdiction in formal probate proceedings. It follows from this rule
that the trial court had jurisdiction to liquidate the business pursuant to either 45-3-911
NMSA 1978 or 53-16-16 NMSA 1978 as long as the necessary parties were properly
before it and proper procedures were utilized. Harrington v. Bannigan, 2000-NMCA-058,
129 N.M. 266, 5 P.3d 1070.

This section does not provide that disagreement warrants liquidation. DiIaconi v.
New Cal Corp., 1982-NMCA-064, 97 N.M. 782, 643 P.2d 1234.

Action to liquidate or dissolve. -- A derivative action is authorized by this section and
the court is authorized to discontinue the liquidation or to dissolve the corporation under
53-16-20 and 53-16-21 NMSA 1978 as is necessary to do justice to all involved. Prager
v. Prager, 1969-NMSC-149, 80 N.M. 773, 461 P.2d 906.

Recognition of remedies not listed in section. -- The court of appeals approved the
trial court's recognition of remedies not specifically stated in this section, since an order
of corporate dissolution is a drastic remedy and should be utilized sparingly, after
consideration of other alternative forms of relief. McCauley v. Tom McCauley & Son,
1986-NMCA-065, 104 N.M. 523, 724 P.2d 232.

Substantial evidence to support finding of oppressive conduct. McCauley v. Tom
McCauley & Son, 1986-NMCA-065, 104 N.M. 523, 724 P.2d 232.

Individual without shares cannot do business as corporation. -- An individual, who
owns no shares of a corporation, cannot be "doing business as" the corporation, and
this same individual, by merely using the term "dba" cannot place the corporation in
bankruptcy. Great W. Constr. Co. v. N.C. Ribble Co., 1967-NMSC-085, 77 N.M. 725,
427 P.2d 246.

Law reviews. -- Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253
(1987).
For annual survey of commercial law in New Mexico, see 18 N.M.L. Rev. 313 (1988).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- Propriety of applying minority discount
to value of shares purchased by corporation or its shareholders from minority
shareholders, 13 A.L.R.5th 840.

19 C.J.S. Corporations § 816.

53-16-17. Procedure in liquidation of corporation by court.

    A. In proceedings to liquidate the assets and business of a corporation, the court
may issue injunctions, appoint a receiver or receivers pendente lite, with such powers
and duties as the court, from time to time, may direct, and take other proceedings
necessary to preserve the corporate assets wherever situated, and carry on the
business of the corporation until a full hearing can be had.

    B. After a hearing upon notice as the court may direct to be given to all parties to
the proceedings and to any other parties in interest designated by the court, the court
may appoint a liquidating receiver or receivers with authority to collect the assets of the
corporation, including all amounts owing to the corporation by subscribers on account of
any unpaid portion of the consideration for the issuance of shares. The liquidating
receiver or receivers may, subject to the order of the court, sell, convey and dispose of
all or any part of the assets of the corporation wherever situated, either at public or
private sale. The assets of the corporation or the proceeds resulting from a sale,
conveyance or other disposition thereof shall be applied to the expenses of the
liquidation and then to the payment of reasonable wages to employees of the
corporation for work done within four months of the liquidation proceedings, and then to
the payment of the liabilities and obligations of the corporation, and any remaining
assets or proceeds shall be distributed among its shareholders according to their
respective rights and interests. The order appointing the liquidating receiver or receivers
shall state their powers and duties. The powers and duties may be increased or
diminished at any time during the proceedings.

    C. The court may allow, from time to time, as expenses of the liquidation,
compensation to the receiver or receivers and to attorneys in the proceeding, and to
direct the payment thereof out of the assets of the corporation or the proceeds of any
sale or disposition of the assets.

    D. A receiver of a corporation appointed under the provisions of this section may
sue and defend in all courts in his own name as receiver of the corporation. The court
appointing the receiver has exclusive jurisdiction of the corporation and its property,
wherever situated.

History: 1953 Comp., § 51-29-17, enacted by Laws 1967, ch. 81, § 95; 1975, ch. 64, §
38.
                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 98 of the ABA Model
Business Corporation Act.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2847 to
2861.

Director's power to sell property of insolvent corporation without consent of
stockholders, 5 A.L.R. 932, 60 A.L.R. 1210.

Right of corporation to preferred creditors, 19 A.L.R. 320, 38 A.L.R. 90, 48 A.L.R. 479,
56 A.L.R. 207, 62 A.L.R. 738.

Validity as against creditors of obligation given by corporation for officer's or
stockholder's personal debt, 47 A.L.R. 78.

Dissolution of corporation or expiration or forfeiture of its charter as affecting power to
sue, 47 A.L.R. 1380, 97 A.L.R. 477.

Right of holders of preferred stock to have receiver appointed, 50 A.L.R. 261.

Dividends, duty and remedy as regards deferring payments of, while there are
undetermined claims or preferences, 88 A.L.R. 1301.

Disposition of rights of missing stockholders in corporation, 101 A.L.R. 670.

Appointment of receiver after dissolution or expiration of charter of corporation, 109
A.L.R. 1526.

Right of creditors or their representatives to complain of voluntary transfer or pledge of
corporate assets by corporation which subsequently becomes insolvent, 117 A.L.R.
1263.

Preference over other creditors based on claim for insurance premiums advanced on
policies issued insured, 8 A.L.R.2d 349.

Validity of security for contemporaneous loan to corporation by officer, director, or
stockholder, 31 A.L.R.2d 663.

Liability of corporate custodian for negligence in dealing with affairs or assets of
corporation, 74 A.L.R.4th 770.
19 C.J.S. Corporations §§ 835 to 851.

53-16-18. Qualifications of receivers.

    A receiver shall in all cases be a natural person or a corporation authorized to act as
receiver, which corporation may be a domestic corporation or a foreign corporation
authorized to transact business in this state, and shall in all cases give bond as the
court may direct with sureties as the court may require.

History: 1953 Comp., § 51-29-18, enacted by Laws 1967, ch. 81, § 96; 1975, ch. 64, §
39.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 99 of the ABA Model
Business Corporation Act.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 C.J.S. Corporations § 773.

53-16-19. Filing of claims in liquidation proceedings.

    In proceedings to liquidate the assets and business of a corporation, the court may
require all creditors of the corporation to file with the clerk of the court or with the
receiver, in such form as the court may prescribe, proofs under oath of their respective
claims. If the court requires the filing of claims, it shall fix a date, which shall be not less
than four months from the date of the order, as the last day for the filing of claims, and
shall prescribe the notice that shall be given to creditors and claimants of the date so
fixed. Prior to the date so fixed, the court may extend the time for the filing of claims.
Creditors and claimants failing to file proofs of claim on or before the date so fixed may
be barred, by order of court, from participating in the distribution of the assets of the
corporation.

History: 1953 Comp., § 51-29-19, enacted by Laws 1967, ch. 81, § 97.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 100 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2862,
2863.

19 C.J.S. Corporations § 872.
53-16-20. Discontinuance of liquidation proceedings.

    The liquidation of the assets and business of a corporation may be discontinued at
any time during the liquidation proceedings when it is established that cause for
liquidation no longer exists. In such event, the court shall dismiss the proceedings and
direct the receiver to redeliver to the corporation all its remaining property and assets.

History: 1953 Comp., § 51-29-20, enacted by Laws 1967, ch. 81, § 98.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 101 of the ABA Model
Business Corporation Act.

Action to liquidate or dissolve. -- A derivative action is authorized by 53-16-16
NMSA 1978 and the court is authorized to discontinue the liquidation or to dissolve the
corporation under 53-16-21 NMSA 1978 and this section as is necessary to do justice to
all involved. Prager v. Prager, 1969-NMSC-149, 80 N.M. 773, 461 P.2d 906.

53-16-21. Decree of involuntary dissolution.

    In proceedings to liquidate the assets and business of a corporation, when the costs
and expenses of the proceedings and all debts, obligations and liabilities of the
corporation have been paid and discharged and all of its remaining property and assets
distributed to its shareholders, or in case its property and assets are not sufficient to
satisfy and discharge the costs, expenses, debts and obligations, all the property and
assets have been applied so far as they will go to their payment, the court shall enter a
decree dissolving the corporation, whereupon the existence of the corporation shall
cease.

History: 1953 Comp., § 51-29-21, enacted by Laws 1967, ch. 81, § 99.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 102 of the ABA Model
Business Corporation Act.

Action to liquidate or dissolve. -- A derivative action is authorized by 53-16-16
NMSA 1978 and the court is authorized to discontinue the liquidation or to dissolve the
corporation under 53-16-20 NMSA 1978 and this section as is necessary to do justice to
all involved. Prager v. Prager, 1969-NMSC-149, 80 N.M. 773, 461 P.2d 906.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2827,
2879.

19 C.J.S. Corporations § 849.
53-16-22. Filing of decree of dissolution.

    In case the court enters a decree dissolving a corporation, the clerk of the court shall
cause a certified copy of the decree to be filed with the commission [secretary of state].
No fee shall be charged by the commission [secretary of state] for the filing.

History: 1953 Comp., § 51-29-22, enacted by Laws 1967, ch. 81, § 100.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 103 of the ABA Model
Business Corporation Act.

53-16-23. Deposit with state treasurer of amount due certain
shareholders.

    Upon the voluntary or involuntary dissolution of a corporation, the portion of the
assets distributable to a creditor or shareholder who is unknown or cannot be found, or
who is under disability and there is no person legally competent to receive the
distributive portion, shall be reduced to cash and deposited with the state treasurer and
shall be paid over to the creditor or shareholder or to his legal representative upon proof
satisfactory to the state treasurer of his right thereto.

History: 1953 Comp., § 51-29-23, enacted by Laws 1967, ch. 81, § 101.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 105 of the ABA Model
Business Corporation Act.

53-16-24. Survival of remedy after dissolution.

    The dissolution of a corporation does not take away or impair any remedy available
to or against the corporation, its directors, officers or shareholders, for any right or claim
existing, or any liability incurred, prior to the dissolution and any such action or
proceeding by or against the corporation may be prosecuted or defended by the
corporation in its corporate name. The shareholders, directors and officers may take
such corporate or other action as appropriate to protect the remedy, right or claim.

History: 1953 Comp., § 51-29-24, enacted by Laws 1967, ch. 81, § 102.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 104 of the ABA Model
Business Corporation Act.

Incorporating state's law controls. -- Even though New Mexico has not specifically
decided whether a corporate survival statute is procedural or substantive, New Mexico
supreme court rule and New Mexico statutes indicate that the law of the state of
incorporation applies. Smith v. Halliburton Co., 1994-NMCA-055, 118 N.M. 179, 879
P.2d 1198.

Where corporate lessor covenanted to repay lessee for improvements on leased
premises if lessee vacated premises, and lessor conveyed premises to stockholders
who owned all but one share of stock, there was sufficient privity between parties to
contract for repayment of improvements to bind stockholders and make them liable for
repayment when lessee vacated premises. Heyde v. State Sec., Inc., 1958-NMSC-009,
63 N.M. 395, 320 P.2d 747(decided under former law).

Survival statute does not contain a limitation period for filing suit against a
dissolved corporation. -- In a foreclosure action, where defendant mortgagor
(mortgagor), a business corporation, executed a promissory note made payable to
plaintiff trust (trust) and executed a mortgage on a parcel of land mortgagor owned in
favor of the trust to secure the note, and where approximately one month after
mortgagor executed the note and mortgage, the office of the public regulation
commission cancelled mortgagor's certificate of incorporation for failure to file the
required corporate reports, and where mortgagor failed to pay off the balance of the
note before it matured and failed to pay the property taxes on the property resulting in
the attachment of a tax lien, and where the New Mexico department of taxation and
revenue sold the property at a public auction to defendant Landau, and where the trust
filed a foreclosure action seeking to collect the remaining balance of the note and to
foreclose on the mortgage, and where defendant Landau claimed that the trust could
not foreclose on the mortgage because mortgagor's corporate status was cancelled
almost ten years prior to the suit and thus the survival period to bring suit against the
corporation had expired, the district court did not err in concluding that the trust was not
barred from suing mortgagor for foreclosure because New Mexico's survival statute for
business corporations does not contain an express time limit for filing suit against a
dissolved corporation. Reynolds Revocable Trust Agreement v. Landau, 2020-NMCA-
036.
Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 Am. Jur. 2d Corporations §§ 2838 to
2846.

Availability of and time for bringing action against former director, officer, or stockholder
in dissolved corporation for personal injuries incurred after final dissolution, 20 A.L.R.4th
414.

Liability of dissolved corporation or corporation that forfeited charter in action pursuant
to Comprehensive Environmental Response, Compensation, and Liability Act
(CERCLA)(42 USCS §§ 9601-9675), 123 A.L.R. Fed. 461.

19 C.J.S. Corporations §§ 861 to 882.

ARTICLE 17
Business Corporations; Foreign Corporations

53-17-1. Admission of foreign corporation.

    No foreign corporation shall transact business in this state until it has procured a
certificate of authority to do so from the commission [secretary of state]. No foreign
corporation shall procure a certificate of authority under the Business Corporation Act to
transact in this state any business which a corporation organized under the Business
Corporation Act is not permitted to transact. A foreign corporation shall not be denied a
certificate of authority because the laws of the state or country under which the
corporation is organized governing its organization and internal affairs differ from the
laws of this state, and nothing in the Business Corporation Act authorizes this state to
regulate the organization or the internal affairs of such corporation. Without excluding
other activities which may not constitute transacting business in this state, a foreign
corporation shall not be considered to be transacting business in this state, for the
purposes of the Business Corporation Act, by reason of carrying on in this state any one
or more of the following activities:

    A. maintaining or defending any action or suit or any administrative or arbitration
proceeding, or effecting the settlement thereof or the settlement of claims or disputes;

    B. holding meetings of its directors or shareholders or carrying on other activities
concerning its internal affairs;

    C. maintaining bank accounts;

    D. maintaining offices or agencies for the transfer, exchange and registration of its
securities, or appointing and maintaining trustees or depositaries with relation to its
securities;

    E. effecting sales through independent contractors;
    F. soliciting or procuring orders, whether by mail or through employees or agents or
otherwise, where the orders require acceptance without this state before becoming
binding contracts;

    G. creating as borrower or lender, or acquiring, indebtedness or mortgages or other
security interest in real or personal property;

    H. securing or collecting debts or enforcing any rights in property securing them;

    I. transacting any business in interstate commerce;

    J. conducting an isolated transaction completed within a period of thirty days and
not in the course of a number of repeated transactions of like nature; or

    K. investing in or acquiring, in transactions outside New Mexico, royalties and other
nonoperating mineral interests and the execution of division orders, contracts of sale
and other instruments incidental to the ownership of the nonoperating mineral interests.

History: 1953 Comp., § 51-30-1, enacted by Laws 1967, ch. 81, § 103; 1969, ch. 48, §
1; 1975, ch. 64, § 40.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 106 of the ABA Model
Business Corporation Act.

Requirements for resort to state courts. -- These provisions establish requirements
for corporations should they desire to resort to the courts of this state in seeking
remedies while the long arm statute submits a corporation to the jurisdiction of the
courts through its acts, regardless of the corporation's intention to use the courts.
Winward v. Holly Creek Mills, Inc., 1972-NMSC-009, 83 N.M. 469, 493 P.2d 954.

Jurisdictional test not created by provisions as to soliciting orders. -- The
statutory language of this section dealing with the solicitation of orders as not
constituting transaction of business within New Mexico, is for purposes of the Business
Corporation Act, and not for testing jurisdiction under 38-1-16 NMSA 1978. Winward v.
Holly Creek Mills, Inc., 1972-NMSC-009, 83 N.M. 469, 493 P.2d 954.

Engineering consulting services constitute "transacting business". -- A company
that provides consulting services in the field of engineering in order to promote a
demand for manufacturers' products among potential customers, and that provides
extensive engineering services for clients and customers alike in New Mexico, is
transacting business within the ambit of this section and therefore is barred under 53-
17-20 NMSA 1978 from maintaining any action, suit or proceeding in any court of this
state. Applied Techs. Assocs. v. Schmidt, 362 F. Supp. 1103 (D.N.M. 1973).

Acts not constituting transaction of business in state. -- Where nonauthorized
foreign corporation was directly responsible to the insurance companies it represented
for business produced and premiums collected by the local agent, who, in turn, became
directly responsible to foreign corporation for the remittance of premium monies due,
the debtor-creditor relationship created arose out of the agency relationship between
the local agent and the insurers and is but incidental to the transaction of their insurance
business in New Mexico. It did not arise out of the transaction of business in New
Mexico by foreign corporation in its own corporate capacity. J.H. Silversmith, Inc. v.
Keeter, 1963-NMSC-099, 72 N.M. 246, 382 P.2d 720 (decided under former law).

Where foreign corporation does not maintain an office in New Mexico, nor solicit
business for itself as a general agency independent of the companies licensed to do
business here for which it acts nor make separate contracts with local agents on its own
behalf, it is not said to be transacting business in New Mexico. J.H. Silversmith, Inc. v.
Keeter, 1963-NMSC-099, 72 N.M. 246, 382 P.2d 720 (decided under former law).

The appointment and removal of local agents or the collection of premiums for
insurance written on behalf of licensed insurance companies by a nonresident
insurance agency corporation does not constitute the "transaction of business" by that
agency. J.H. Silversmith, Inc. v. Keeter, 1963-NMSC-099, 72 N.M. 246, 382 P.2d 720.

Texas company's representative in New Mexico who only solicits offers for contracts
which are relayed back to Texas for acceptance is not doing business in New Mexico
and is not barred from suing in New Mexico on contract by statute which requires
certain types of businesses doing business in New Mexico to obtain a certificate of
authorization to transact business in New Mexico. Don J. Cummings Co. v. Aluminum
Mfg. Corp., 371 F.2d 118 (10th Cir. 1967).

Where court construes previous decisions to hold that mere solicitation of a contract in
this state by an agent, to be accepted at a home office in a foreign state, amounts to the
transaction of business and that any action thereon is barred, the court errs. Vernon Co.
v. Reed, 1967-NMSC-261, 78 N.M. 554, 434 P.2d 376 (decided under former law).

Where plaintiff's only business is financing the purchase of its airplanes to aid sales by
its parent corporation and toward this end it creates liens on personal property in New
Mexico and its other activities are incidental to and directly related to this permitted
activity, such activities do not constitute transacting business within this state. Cessna
Fin. Corp. v. Mesilla Valley Flying Serv., Inc., 1969-NMSC-169, 81 N.M. 10, 462 P.2d
144, cert. denied, 397 U.S. 1076, 90 S. Ct. 1521, 25 L. Ed. 2d 811 (1970) (decided
under former law).

Since absent isolated acts of debt collection and filing suit, a company's only contact
with New Mexico was its ownership of the right to receive payment on loans to New
Mexico corporations or individuals that originated from New Mexico banks, the contact
was too remote to constitute "transacting business in this state" under the closed-door
statute (53-17-20 NMSA 1978). Cadle Co. v. Wallach Concrete, Inc., 1993-NMSC-026,
115 N.M. 556, 855 P.2d 130.

Single act not within statute. -- If the making and delivery of the promissory note in
New Mexico could be said to constitute transacting business here, it is but a single act
of business which this court has held would not bring a foreign corporation within its
qualifying statutes. J.H. Silversmith, Inc. v. Keeter, 1963-NMSC-099, 72 N.M. 246, 382
P.2d 720 (decided under former law).

Dissolved foreign corporations. -- The laws specific to foreign corporations are
codified at 53-17-1 to 53-17-20 NMSA 1978, and do not contain a dissolution provision
that is inconsistent with Rule 1-017 NMRA. Thus defendant, a foreign corporation, is
subject to the New Mexico statutes which are specific to foreign corporations rather than
to 53-16-24 NMSA 1978, which controls the dissolution of New Mexico corporations.
Therefore, Delaware law controls whether defendant is amenable to suit following
dissolution. Smith v. Halliburton Co., 1994-NMCA-055, 118 N.M. 179, 879 P.2d 1198.

Law reviews. -- For article, "Attachment in New Mexico - Part I," see 1 Nat. Res. J.
303 (1961).

For note, "The Entry and Regulation of Foreign Corporations Under New Mexico Law
and Under the Model Business Corporation Act," see 6 Nat. Res. J. 617 (1966).

For article, "1975 Amendments to the New Mexico Business Corporation Act," see 6
N.M.L. Rev. 57 (1975).

For survey, "Article VII of the New Probate Code: In Pursuit of Uniform Trust
Administration," see 6 N.M.L. Rev. 213 (1976).

For article, "1983 Amendments to the New Mexico Business Corporation Act and
Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253 (1987).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §§
170 to 224; 281 et seq.
Right of resident creditors of foreign corporation to preference over nonresident
creditors, 1 A.L.R. 648.

Mode of proving authority of foreign corporation to do business within state, 2 A.L.R.
1235.

Agreement by foreign corporation to install article within the state as bringing
transaction within state control, 11 A.L.R. 614, 101 A.L.R. 356.

Effect of domestication of foreign corporations, 18 A.L.R. 130, 126 A.L.R. 1503.

Soliciting subscriptions to or selling corporate stock as doing business within state, 35
A.L.R. 625.

Construction work as doing business within the state, 55 A.L.R. 726.

Soliciting within state of orders for goods to be shipped from other state as doing
business within state within statutes prescribing conditions of doing business or
providing for service of process, 60 A.L.R. 994, 101 A.L.R. 126, 146 A.L.R. 941.

Status, citizenship, domicil, residence, or location of national corporations, 69 A.L.R.
1346, 88 A.L.R. 873.

Power of state to require foreign corporation to become incorporated under its laws as a
condition of doing business in state, 72 A.L.R. 105.

Effect of agreement by foreign corporation to service or repair article sold or leased by it
to bring transaction within state control, 126 A.L.R. 1104.

Power to regulate activities of foreign corporation within state as condition of its doing
business within, 132 A.L.R. 482.

What constitutes doing business within state by foreign insurance corporation, 137
A.L.R. 1128.

Ownership or control by foreign corporation of stock of other corporation as constituting
doing business within state, 18 A.L.R.2d 187.

What constitutes doing business within state by foreign magazine, newspaper, or other
publishing corporations, for purposes other than taxation, 38 A.L.R.2d 747.

Leasing of real estate by foreign corporation, as lessor or lessee, as doing business
within state within statute prescribing conditions of right to do business, 59 A.L.R.2d
1131.
Holding directors', officers', or stockholders' or sales meetings or conventions in a state
by foreign corporation as doing business within the state, 84 A.L.R.2d 412.

Foreign corporation's leasing of personal property as doing business within statutes
prescribing conditions of right to do business, 50 A.L.R.3d 1020.

Modern status of the Massachusetts or business trust, 88 A.L.R.3d 704.

Construction work by foreign corporation as doing business for purposes of statute
requiring foreign corporation to qualify as condition of access to local courts, 90
A.L.R.3d 929.

Personal liability of stockholder, officer, or agent for debt of foreign corporation doing
business in state, 27 A.L.R.4th 387.

Construction, application, and operation of state "retaliatory" statutes imposing special
taxes or fees on foreign insurers doing business in state, 30 A.L.R.4th 873.

19 C.J.S. Corporations § 901 et seq.

53-17-2. Powers of foreign corporation.

    A foreign corporation which has received a certificate of authority under the
Business Corporation Act shall, until a certificate of revocation or of withdrawal, has
been issued as provided in the Business Corporation Act, enjoy the same, but no
greater, rights and privileges as a domestic corporation organized for the purposes set
forth in the application pursuant to which the certificate of authority is issued; and,
except as otherwise provided in the Business Corporation Act, is subject to the same
duties, restrictions, penalties and liabilities now or hereafter imposed upon a domestic
corporation of like character.

History: 1953 Comp., § 51-30-2, enacted by Laws 1967, ch. 81, § 104.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 107 of the ABA Model
Business Corporation Act.

Solicitation not transaction of business. -- Where court construes previous
decisions to hold that mere solicitation of a contract in this state by an agent, to be
accepted at a home office in a foreign state, amounts to the transaction of business and
that any action thereon is barred, the court errs. Vernon Co. v. Reed, 1967-NMSC-261,
78 N.M. 554, 434 P.2d 376 (decided under former law).

Foreign public utility has power of eminent domain. -- Under 62-1-1 and 62-1-4
NMSA 1978, a foreign public utility authorized to do business in this state has the same
right as a domestic public utility to exercise the power of eminent domain in this state. El
Paso Elec. Co. v. Real Estate Mart, Inc., 1979-NMSC-023, 92 N.M. 581, 592 P.2d 181.
See now 62-1-1.1 NMSA 1978 (decided under prior law).

The Business Corporation Act does not compel a foreign corporation to consent
to general personal jurisdiction. -- In consolidated interlocutory appeals where the
district court denied petitioners' motions to dismiss claims against them for lack of
general or specific personal jurisdiction, and where the court of appeals concluded that
general personal jurisdiction was proper over petitioners, four foreign corporations, all of
whom are manufacturers of automobiles or automobile components and registered to
transact business under New Mexico's Business Corporation Act (BCA), §§ 53-17-1
through 53-17-20 NMSA 1978, the New Mexico supreme court reversed the court of
appeals because any legislative intent to require a foreign corporation to consent to
general personal jurisdiction should be clearly, unequivocally, and unambiguously
expressed in the statutory text, and the language of the BCA relating to a foreign
corporation's equal rights and responsibilities under New Mexico law does not clearly,
unequivocally, and unambiguously express an intent to require a foreign corporation to
consent to general personal jurisdiction in New Mexico. Chavez v. Bridgestone
Americas Tire Operations, LLC, 2022-NMSC-006, rev'g 2019-NMCA-023, 458 P.3d
569; A-1-CA-36442, mem. op. (Ct. App. Dec. 21, 2018) (nonprecedential); A-1-CA-
35910, mem. op. (Ct. App. Dec. 21, 2018) (nonprecedential); and A-1-CA-37818 (Ct.
App. Jan 18, 2019), and overruling Werner v. Wal-Mart Stores, Inc., 1993-NMCA-112,
116 N.M. 229, 861 P.2d 270.

53-17-3. Corporate name of foreign corporation.

    A. No certificate of authority shall be issued to a foreign corporation unless the
corporate name of the corporation and, if different, the name under which it proposes to
transact business in New Mexico:

         (1) contains the word "corporation", "company", "incorporated" or "limited" or
contains an abbreviation of one of these words or the corporation, for use in this state,
adds at the end of its name one of these words or an abbreviation thereof;

         (2) does not contain any word or phrase that indicates or implies that it is
organized for any purpose other than one or more of the purposes contained in its
articles of incorporation or that it is authorized or empowered to conduct a business that
a corporation organized under the Business Corporation Act is not permitted to transact;
and

         (3) is not the same as, or confusingly similar to, the name of any domestic
corporation existing under the laws of this state or any foreign corporation authorized to
transact business in this state or a name the exclusive right to which is, at the time,
reserved in the manner provided in the Business Corporation Act or the name of a
corporation that has in effect a registration of its name as provided in the Business
Corporation Act.
    B. The provisions of Paragraph (3) of Subsection A of this section shall not apply if
the foreign corporation applying for a certificate of authority files with the secretary of
state any one of the following:

         (1) a resolution of its board of directors adopting a fictitious name for use in
transacting business in this state, which fictitious name is not confusingly similar to the
name of any domestic corporation or of any foreign corporation authorized to transact
business in this state or to any name reserved or registered as provided in the Business
Corporation Act;

         (2) the written consent of such other corporation or holder of a reserved or
registered name to use the same or confusingly similar name and one or more words
are added to make such name distinguishable from such other name; or

         (3) a certified copy of a final decree of a court of competent jurisdiction
establishing the prior right of such foreign corporation to the use of such name in this
state.

History: 1953 Comp., § 51-30-3, enacted by Laws 1967, ch. 81, § 105; 1975, ch. 64, §
41; 2021, ch. 68, § 6.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 108 of the ABA Model
Business Corporation Act.

The 2021 amendment, effective July 1, 2021, applied the provisions of this section to
the name under which a corporation proposes to transact business in New Mexico if it is
different than the corporate name; in Subsection A, after "name of the corporation",
added "and, if different, the name under which it proposes to transact business in New
Mexico"; and in Subsection B, after "files with the", deleted "commission" and added
"secretary of state".

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Corporations §§ 163 to
166.

Right to protection of corporate name, as between domestic corporation and foreign
corporation not qualified to do business in state, 26 A.L.R.3d 994.

19 C.J.S. Corporations § 889.

53-17-4. Change of name by foreign corporation.
    Whenever a foreign corporation which is authorized to transact business in this state
changes its name to one under which a certificate of authority would not be granted to it
on application therefor, the certificate of authority of the corporation shall be suspended
and it shall not therafter [thereafter] transact any business in this state until it has
changed its name to a name which is available to it under the laws of this state, or has
otherwise complied with the provisions of the Business Corporation Act.

History: 1953 Comp., § 51-30-4, enacted by Laws 1967, ch. 81, § 106; 1975, ch. 64, §
42.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Compiler's notes. -- This section is derived from Section 109 of the ABA Model
Business Corporation Act.

Law reviews. -- For article, "1975 Amendments to the New Mexico Business
Corporation Act," see 6 N.M.L. Rev. 57 (1975).

53-17-5. Application for certificate of authority.

    A. A foreign corporation, in order to procure a certificate of authority to transact
business in this state, shall make application to the commission [secretary of state],
which application shall set forth:

         (1) the name of the corporation and the state or country under the laws of
which it is incorporated;

         (2) if the name of the corporation does not contain the word "corporation",
"company", "incorporated" or "limited" or does not contain an abbreviation of one of
these words, the name of the corporation with the word or abbreviation that it elects to
add thereto for use in this state;

         (3) the date of incorporation and the period of duration of the corporation;

         (4) the address of the registered office of the corporation in the state or
country under the laws of which it is incorporated and the address of the principal office
of the corporation, if different;

         (5) the address of the proposed registered office of the corporation in this
state and the name of its proposed registered agent in this state at such address;

         (6) the purpose of the corporation that it proposes to pursue in the transaction
of business in this state;
         (7) the names and respective addresses of the directors and officers of the
corporation who have consented to serve;

         (8) a statement of the aggregate number of shares that the corporation has
authority to issue, itemized by classes and by series, if any, within a class;

         (9) a statement of the aggregate number of issued shares, itemized by class
and by series, if any, within each class;

         (10) an estimate expressed in dollars of:

             (a) the gross amount of business that will be transacted by it during its current
fiscal year at or from places of business located in the state;

             (b) the gross amount of business that will be transacted by it during its current
fiscal year, wherever transacted;

             (c) the value of all property to be owned by it and located in the state during
its current fiscal year; and

             (d) the value of all property to be owned by it during its current fiscal year,
wherever located; and

         (11) additional information necessary or appropriate in order to enable the
commission [secretary of state] to determine whether the corporation is entitled to a
certificate of authority to transact business in this state and to determine and assess the
fees payable.

    B. The application shall be made on forms prescribed by the commission [secretary
of state] or on forms containing substantially the same information as forms prescribed
by the commission [secretary of state] and shall be executed by the corporation by an
authorized officer of the corporation.

History: 1953 Comp., § 51-30-5, enacted by Laws 1967, ch. 81, § 107; 1975, ch. 65, §
2; 1977, ch. 103, § 13; 1983, ch. 304, § 64; 1991, ch. 170, § 9; 1993, ch. 318, § 4; 2001,
ch. 200, § 66; 2003, ch. 318, § 42.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 110 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, deleted "and franchise taxes" near the
end of Paragraph A(11); in Subsection B, inserted "or on forms containing substantially
the same information as forms prescribed by the commission" following "by the
commission", and inserted "of the corporation" at the end.

The 2001 amendment, effective July 1, 2001, in Subsection A, substituted "registered
office" for "principal office", and inserted "if different" in Paragraph (4); substituted
"during its current fiscal year" for "during such year" in Paragraphs (10)(b), (c) and (d);
and substituted "an authorized officer" for "its president or vice president and by its
secretary or an assistant secretary and verified by one of the officers signing the
application".

The 1993 amendment, effective June 18, 1993, substituted "who have consented to
serve" for "and include a statement that an affidavit signed by each director stating that
he consents to being a director is on file with the corporation" in Subsection A(7) and
deleted "state corporation" before "commission" in Subsection B.

The 1991 amendment, effective January 1, 1992, in Subsection A, added "and include
a statement that an affidavit signed by each director stating that he consents to being a
director is on file with the corporation" at the end of Paragraph (7) and inserted "state
corporation" preceding "commission" in Subsection B.

National bank authorized ancillary administrator. -- National bank domiciled in
another state can act as ancillary administrator without further authorization and, after
acquiring a permit under 12 U.S.C. § 248(k), can perform the duties of trustee in the
state without obtaining a certificate of authorization to do business in the state from the
state corporation commission (now secretary of state). 1953 Op. Att'y Gen. No. 53-5881
(rendered under former law).

53-17-6. Filing of application for certificate of authority.

    A. A corporation applying for a certificate of authority shall deliver to the commission
[secretary of state]:

         (1) an original of the application of the corporation for a certificate of authority
together with a copy, which may be signed, photocopied or conformed;

         (2) a certificate of good standing and compliance issued by the appropriate
official of the state or country under the laws of which the corporation is incorporated,
current within thirty days and which has not expired at the time of receipt by the
commission [secretary of state]; and

         (3) a statement executed by the designated registered agent acknowledging
his acceptance of the appointment by the filing corporation as its registered agent, if the
agent is an individual, or a statement executed by an authorized officer of a corporation
that is the designated registered agent in which the officer acknowledges the
corporation's acceptance of the appointment by the filing corporation as its registered
agent, if the agent is a corporation.

    B. If the commission [secretary of state] finds that the application and the statement
conform to law, it shall, when all fees have been paid:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing;

         (2) file in its office the original of the application, the statement and the copy
of the articles of incorporation and amendments thereto; and

         (3) issue a certificate of authority to transact business in this state to which it
shall affix the file-stamped copy.

    C. The certificate of authority, together with the file-stamped copy of the application
affixed to it shall be returned by the commission [secretary of state] to the corporation or
its representative.

History: 1953 Comp., § 51-30-6, enacted by Laws 1967, ch. 81, § 108; 1977, ch. 103, §
14; 1983, ch. 304, § 65; 2001, ch. 200, § 67.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 111 of the ABA Model
Business Corporation Act.
The 2001 amendment, effective July 1, 2001, substituted "a statement" for "an affidavit"
throughout the section; in Subsection A, inserted the paragraph designations and the
introductory language; substituted "an original" for "duplicate originals" and inserted
"together with a copy, which may be signed, photocopied or conformed" in Paragraph
(1); inserted "current within thirty days and which has not expired at the time of receipt
by the commission" in Paragraph (2); substituted "an authorized officer" for "the
president or vice president" in Paragraph (3); in Subsection B, substituted "the original
and copy" for "each of the documents" in Paragraph (1), substituted "the original" for
"one of the duplicate originals" in Paragraph (2), substituted "file-stamped copy" for
"other duplicate original application" in Paragraph (3); and in Subsection C, substituted
"file-stamped copy" for "duplicate original".

The 1983 amendment, effective June 17, 1983, deleted "together with a copy of its
articles of incorporation and all amendments thereto, duly authenticated by the proper
officer of the state or country under the laws of which it is incorporated" at the end of
Subsection A, substituted "conform" for "conforms" and deleted "and franchise taxes"
following "fees" in the introductory language of Subsection B.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §§
220, 221.

53-17-7. Application for readmission.

    The commission [secretary of state] may waive the filing of articles of incorporation
or other documents by a corporation making application for a certificate of authority if
the documents were filed in connection with a previous application for a certificate of
authority.

History: 1953 Comp., § 51-30-6.1, enacted by Laws 1969, ch. 22, § 4.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-17-8. Effect of [certificate of] authority.
    Unless the commission [secretary of state] disapproves pursuant to Subsection A of
Section 53-18-2 NMSA 1978, upon delivery of the application for a certificate of
authority to the commission [secretary of state], the corporation shall be authorized to
transact business in this state for those purposes set forth in its application, subject,
however, to the right of this state to suspend or revoke the authority as provided in the
Business Corporation Act.

History: 1953 Comp., § 51-30-7, enacted by Laws 1967, ch. 81, § 109; 1983, ch. 304, §
66.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 112 of the ABA Model
Business Corporation Act.

The 1983 amendment, effective June 17, 1983, deleted "certificate of" preceding
"authority" in the catchline and substituted "Unless the commission . . . to the
commission" for "Upon the issuance of a certificate of authority by the commission" at
the beginning of the section.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §§
238 to 239.

53-17-9. Registered office and registered agent of foreign
corporation.

    Each foreign corporation authorized to transact business in this state shall have and
continuously maintain in this state:

    A. a registered office which may be, but need not be, the same as its place of
business in this state; and

    B. a registered agent, which agent may be either an individual resident in this state
whose business office is identical with the registered office, or a domestic corporation,
or a foreign corporation authorized to transact business in this state, having a business
office identical with the registered office.

History: 1953 Comp., § 51-30-8, enacted by Laws 1967, ch. 81, § 110.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 113 of the ABA Model
Business Corporation Act.

The Business Corporation Act does not compel a foreign corporation to consent
to general personal jurisdiction. -- In consolidated interlocutory appeals where the
district court denied petitioners' motions to dismiss claims against them for lack of
general or specific personal jurisdiction, and where the court of appeals concluded that
general personal jurisdiction was proper over petitioners, four foreign corporations, all of
whom are manufacturers of automobiles or automobile components and registered to
transact business under New Mexico's Business Corporation Act (BCA), §§ 53-17-1
through 53-17-20 NMSA 1978, the New Mexico supreme court reversed the court of
appeals because any legislative intent to require a foreign corporation to consent to
general personal jurisdiction should be clearly, unequivocally, and unambiguously
expressed in the statutory text, and the language of the BCA relating to a foreign
corporation's equal rights and responsibilities under New Mexico law does not clearly,
unequivocally, and unambiguously express an intent to require a foreign corporation to
consent to general personal jurisdiction in New Mexico. Chavez v. Bridgestone
Americas Tire Operations, LLC, 2022-NMSC-006, rev'g 2019-NMCA-023, 458 P.3d
569; A-1-CA-36442, mem. op. (Ct. App. Dec. 21, 2018) (nonprecedential); A-1-CA-
35910, mem. op. (Ct. App. Dec. 21, 2018) (nonprecedential); and A-1-CA-37818 (Ct.
App. Jan 18, 2019), and overruling Werner v. Wal-Mart Stores, Inc., 1993-NMCA-112,
116 N.M. 229, 861 P.2d 270.

Constitutionality of registration statutes. -- In a wrongful death action where
decedent purchased a Ford pickup truck from a private seller in New Mexico, and where
decedent later died in a single vehicle accident when the roof structure of the truck
collapsed after the vehicle rolled over on a New Mexico road, and where plaintiff
claimed that the truck's roof structure was defectively designed, defendant's claim that
the imposition of general personal jurisdiction over it based on its registration to do
business in New Mexico violated the dormant Commerce Clause was without merit,
because any burden the registration statutes have on interstate commerce is justified by
New Mexico's interests in providing access to the courts for residents and those injured
in the state. Navarette Rodriguez v. Ford Motor Co., 2019-NMCA-023, cert. granted.

Compliance with statute requiring registration to do business in the state
constitutes consent to that state's jurisdiction. -- In a wrongful death action where
decedent purchased a Ford pickup truck from a private seller in New Mexico, and where
decedent later died in a single vehicle accident when the roof structure of the truck
collapsed after the vehicle rolled over on a New Mexico road, and where plaintiff
claimed that the truck's roof structure was defectively designed, the district court did not
err in denying defendant's motion to dismiss for lack of personal jurisdiction, because
defendant consented to general jurisdiction in New Mexico courts by registering to do
business here and appointing an agent for service of process under the Business
Corporation Act, 53-11-1 through 53-18-12 NMSA 1978. Navarette Rodriguez v. Ford
Motor Co., 2019-NMCA-023, cert. granted.

Venue. -- Foreign corporations that have appointed a foreign corporation as their
statutory agent may receive the benefit of the special venue provisions of Section 38-3-
1F NMSA 1978. Cooper v. Chevron U.S.A., Inc., 2002-NMSC-020, 132 N.M. 382, 49
P.3d 61.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §§
229, 233.

19 C.J.S. Corporations §§ 902, 909, 955.

53-17-10. Change of registered office or registered agent of foreign
corporation.

    A. A foreign corporation authorized to transact business in this state may change its
registered office or change its registered agent, or both, upon filing in the office of the
public regulation commission [secretary of state] a statement setting forth:

         (1) the name of the corporation;

         (2) the address of its registered office;

         (3) if the address of its registered office is changed, the address to which the
registered office is to be changed;

         (4) the name of its registered agent;

         (5) if its registered agent is changed:

             (a) the name of its successor registered agent; and

             (b) a statement executed by the successor registered agent acknowledging
his acceptance of the appointment by the filing corporation as its registered agent, if the
agent is an individual, or a statement executed by an authorized officer of a corporation
that is the successor registered agent in which the officer acknowledges the
corporation's acceptance of the appointment by the filing corporation as its registered
agent, if the agent is a corporation; and

         (6) that the address of its registered office and the address of the business
office of its registered agent, as changed, will be identical.
    B. The statement shall be executed by the corporation by an authorized officer and
delivered to the public regulation commission [secretary of state]. If the commission
[secretary of state] finds that the statement conforms to the provisions of the Business
Corporation Act, it shall file the statement in its office, and upon the filing, the change of
address of the registered office or the appointment of a new registered agent, or both,
shall become effective.

    C. A registered agent of a foreign corporation may resign as agent upon filing a
written notice of resignation with the public regulation commission [secretary of state],
which shall mail immediately a copy of it to the corporation at its principal office in the
state or country under the laws of which it is incorporated. The appointment of the agent
shall terminate upon the expiration of thirty days after receipt of the notice by the
commission [secretary of state].

    D. 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 corporation for which the registered agent is the registered agent by
notifying the corporation in writing of the change and signing, either manually or in
facsimile, and delivering to the public regulation commission [secretary of state] for filing
a statement that complies with the requirements of this section but need not be
responsive to Paragraph (5) of Subsection A of this section and recites that the
corporation has been notified of the change.

History: 1953 Comp., § 51-30-9, enacted by Laws 1967, ch. 81, § 111; 1977, ch. 103, §
15; 2001, ch. 200, § 68; 2003, ch. 318, § 43.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 114 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, deleted former Subsection D which read:
"If a registered agent changes his business address to another place within the same
county, he may change the address and the address of the registered office of any
corporations of which he is a registered agent by filing a statement as required in
Subsection A of this section, except that it need be signed only by the registered agent
and need not be responsive to Paragraph (5) of that subsection and must recite that a
copy of the statement has been mailed to each corporation."; added present Subsection
D; and inserted "public regulation" throughout the section.

The 2001 amendment, effective July 1, 2001, substituted "a statement" for "an affidavit"
throughout the section; substituted "an authorized officer" for "the president or vice
president" in Paragraph A(5)(b); substituted "an authorized officer" for "its president or
vice president and verified by him" in Subsection B; and substituted "written notice of
resignation" for "written notice thereof, executed in duplicate" in Subsection C.

The Business Corporation Act does not compel a foreign corporation to consent
to general personal jurisdiction. -- In consolidated interlocutory appeals where the
district court denied petitioners' motions to dismiss claims against them for lack of
general or specific personal jurisdiction, and where the court of appeals concluded that
general personal jurisdiction was proper over petitioners, four foreign corporations, all of
whom are manufacturers of automobiles or automobile components and registered to
transact business under New Mexico's Business Corporation Act (BCA), §§ 53-17-1
through 53-17-20 NMSA 1978, the New Mexico supreme court reversed the court of
appeals because any legislative intent to require a foreign corporation to consent to
general personal jurisdiction should be clearly, unequivocally, and unambiguously
expressed in the statutory text, and the language of the BCA relating to a foreign
corporation's equal rights and responsibilities under New Mexico law does not clearly,
unequivocally, and unambiguously express an intent to require a foreign corporation to
consent to general personal jurisdiction in New Mexico. Chavez v. Bridgestone
Americas Tire Operations, LLC, 2022-NMSC-006, rev'g 2019-NMCA-023, 458 P.3d
569; A-1-CA-36442, mem. op. (Ct. App. Dec. 21, 2018) (nonprecedential); A-1-CA-
35910, mem. op. (Ct. App. Dec. 21, 2018) (nonprecedential); and A-1-CA-37818 (Ct.
App. Jan 18, 2019), and overruling Werner v. Wal-Mart Stores, Inc., 1993-NMCA-112,
116 N.M. 229, 861 P.2d 270.

Constitutionality of registration statutes. -- In a wrongful death action where
decedent purchased a Ford pickup truck from a private seller in New Mexico, and where
decedent later died in a single vehicle accident when the roof structure of the truck
collapsed after the vehicle rolled over on a New Mexico road, and where plaintiff
claimed that the truck's roof structure was defectively designed, defendant's claim that
the imposition of general personal jurisdiction over it based on its registration to do
business in New Mexico violated the dormant Commerce Clause was without merit,
because any burden the registration statutes have on interstate commerce is justified by
New Mexico's interests in providing access to the courts for residents and those injured
in the state. Navarette Rodriguez v. Ford Motor Co., 2019-NMCA-023, cert. granted.

Compliance with statute requiring registration to do business in the state
constitutes consent to that state's jurisdiction. -- In a wrongful death action where
decedent purchased a Ford pickup truck from a private seller in New Mexico, and where
decedent later died in a single vehicle accident when the roof structure of the truck
collapsed after the vehicle rolled over on a New Mexico road, and where plaintiff
claimed that the truck's roof structure was defectively designed, the district court did not
err in denying defendant's motion to dismiss for lack of personal jurisdiction, because
defendant consented to general jurisdiction in New Mexico courts by registering to do
business here and appointing an agent for service of process under the Business
Corporation Act, 53-11-1 through 53-18-12 NMSA 1978. Navarette Rodriguez v. Ford
Motor Co., 2019-NMCA-023, cert. granted.

53-17-11. Service of process on foreign corporation.

    The registered agent appointed by a foreign corporation authorized to transact
business in this state shall be an agent of the corporation upon whom any process,
notice or demand required or permitted by law to be served upon the corporation may
be served. Nothing in this section limits or affects the right to serve any process, notice
or demand, required or permitted by law to be served upon a corporation in any other
manner now or hereafter permitted by law.

History: 1953 Comp., § 51-30-10, enacted by Laws 1967, ch. 81, § 112.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 115 of the ABA Model
Business Corporation Act.

Cross references. -- For service of process on secretary of state, see 38-1-5 NMSA
1978.

For process against foreign corporations, see 38-1-6 NMSA 1978.

The Business Corporation Act does not compel a foreign corporation to consent
to general personal jurisdiction. -- In consolidated interlocutory appeals where the
district court denied petitioners' motions to dismiss claims against them for lack of
general or specific personal jurisdiction, and where the court of appeals concluded that
general personal jurisdiction was proper over petitioners, four foreign corporations, all of
whom are manufacturers of automobiles or automobile components and registered to
transact business under New Mexico's Business Corporation Act (BCA), §§ 53-17-1
through 53-17-20 NMSA 1978, the New Mexico supreme court reversed the court of
appeals because any legislative intent to require a foreign corporation to consent to
general personal jurisdiction should be clearly, unequivocally, and unambiguously
expressed in the statutory text, and the language of the BCA relating to a foreign
corporation's equal rights and responsibilities under New Mexico law does not clearly,
unequivocally, and unambiguously express an intent to require a foreign corporation to
consent to general personal jurisdiction in New Mexico. Chavez v. Bridgestone
Americas Tire Operations, LLC, 2022-NMSC-006, rev'g 2019-NMCA-023, 458 P.3d
569; A-1-CA-36442, mem. op. (Ct. App. Dec. 21, 2018) (nonprecedential); A-1-CA-
35910, mem. op. (Ct. App. Dec. 21, 2018) (nonprecedential); and A-1-CA-37818 (Ct.
App. Jan 18, 2019), and overruling Werner v. Wal-Mart Stores, Inc., 1993-NMCA-112,
116 N.M. 229, 861 P.2d 270.

Constitutionality of registration statutes. -- In a wrongful death action where
decedent purchased a Ford pickup truck from a private seller in New Mexico, and where
decedent later died in a single vehicle accident when the roof structure of the truck
collapsed after the vehicle rolled over on a New Mexico road, and where plaintiff
claimed that the truck's roof structure was defectively designed, defendant's claim that
the imposition of general personal jurisdiction over it based on its registration to do
business in New Mexico violated the dormant Commerce Clause was without merit,
because any burden the registration statutes have on interstate commerce is justified by
New Mexico's interests in providing access to the courts for residents and those injured
in the state. Navarette Rodriguez v. Ford Motor Co., 2019-NMCA-023, cert. granted.

Compliance with statute requiring registration to do business in the state
constitutes consent to that state's jurisdiction. -- In a wrongful death action where
decedent purchased a Ford pickup truck from a private seller in New Mexico, and where
decedent later died in a single vehicle accident when the roof structure of the truck
collapsed after the vehicle rolled over on a New Mexico road, and where plaintiff
claimed that the truck's roof structure was defectively designed, the district court did not
err in denying defendant's motion to dismiss for lack of personal jurisdiction, because
defendant consented to general jurisdiction in New Mexico courts by registering to do
business here and appointing an agent for service of process under the Business
Corporation Act, 53-11-1 through 53-18-12 NMSA 1978. Navarette Rodriguez v. Ford
Motor Co., 2019-NMCA-023, cert. granted.

Jurisdiction obtainable for out-of-state injury. -- Without an express limitation in the
statutory language to the contrary, the legislature intended for this section to apply to
any and all claims against a foreign corporation with a registered agent in New Mexico,
thus acting as a jurisdictional consent statute. Accordingly, New Mexico courts could
properly obtain personal jurisdiction over a Delaware corporation, with a registered
agent in New Mexico, for a plaintiff's injury which occurred in one of the defendant's
stores in Georgia. Werner v. Wal-Mart Stores, Inc., 1993-NMCA-112, 116 N.M. 229,
861 P.2d 270.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §§
228 et seq.

Constitutionality, construction and effect of statute providing for service of process upon
statutory agent in action against foreign corporation, as regards communication to
corporation of fact of service, 89 A.L.R. 658.

Who, other than public official, may be served with process in action against foreign
corporation doing business in state, 113 A.L.R. 9
Service of process on officer, director, or stockholder in action against foreign
corporation doing business in state, 113 A.L.R. 36.

Statute providing for service of process upon designated state official in action against
foreign corporation as applicable to action based on transaction outside of state, 145
A.L.R. 630, 162 A.L.R. 1424.

Requisites of service upon, or delivery to, designated public official, as a condition of
substituted service of process on him, 148 A.L.R. 975.

Setting aside default judgment for failure of statutory agent on whom process was
served to notify defendant, 20 A.L.R.2d 1179.

Who is an "agent authorized by employment" to receive service of process within
purview of Federal Rules of Civil Procedure and similar state rules and statutes, 26
A.L.R.2d 1086.

Manner of service of process upon foreign corporation which has withdrawn from state,
86 A.L.R.2d 1000.

Federal or state law as controlling, in diversity action, whether foreign corporation is
amenable to service of process in state, 6 A.L.R.3d 1103.

Who is "general" or "managing" agent of foreign corporation under statute authorizing
service of process on such agent, 17 A.L.R.3d 625.

19 C.J.S. Corporations §§ 952 to 961.

53-17-12. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1983, ch. 304, § 73, repealed 53-17-12 NMSA 1978, as enacted by
Laws 1967, ch. 81, § 113, relating to amendment of the articles of incorporation of a
foreign corporation, effective June 17, 1983.

53-17-13. Merger or conversion of foreign corporation authorized to
transact business in this state.

    Whenever a foreign corporation authorized to transact business in this state is a
party to a statutory merger or conversion permitted by the laws of the state or country
under the laws of which it is incorporated, it shall, within thirty days after the merger or
conversion becomes effective, file with the commission [secretary of state] a copy of the
articles of merger or conversion duly authenticated by the proper officer of the state or
country under the laws of which the statutory merger or conversion was effected. It is
not necessary for the corporation to procure either a new or amended certificate of
authority to transact business in this state unless the name of the corporation is
changed thereby or unless the corporation desires to pursue in this state other or
additional purposes than those which it is then authorized to transact in this state or
unless the surviving corporation is to transact business in New Mexico but has not
procured a certificate of authority to transact business in this state.

History: 1953 Comp., § 51-30-12, enacted by Laws 1967, ch. 81, § 114; 1983, ch. 304,
§ 67; 2001, ch. 200, § 69.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 117 of the ABA Model
Business Corporation Act.

The 2001 amendment, effective July 1, 2001, inserted "or conversion" following
"merger" in the section heading and throughout the section text.

The 1983 amendment, effective June 17, 1983, deleted "and the corporation is the
surviving corporation" following "incorporated" in the first sentence and added "or unless
. . . in this state" at the end of the last sentence.

53-17-14. Amended certificate of authority.

    A foreign corporation authorized to transact business in this state shall procure an
amended certificate of authority in the event it changes its corporate name or desires to
pursue in this state other or additional purposes than those set forth in its prior
application for a certificate of authority by making application therefor to the commission
[secretary of state]. The requirements in respect to the form and contents of the
application, the manner of its execution, the filing of an original and a copy, which may
be a photocopy of the original after it was signed or a photocopy that is conformed to
the original, with the commission [secretary of state], the issuance of an amended
certificate of authority and the effect thereof shall be the same as in the case of an
original application for a certificate of authority.
History: 1953 Comp., § 51-30-13, enacted by Laws 1967, ch. 81, § 115; 2003, ch. 318,
§ 44.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 118 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, substituted "an original and a copy,
which may be a photocopy of the original after it was signed or a photocopy that is
conformed to the original" for "duplicate originals thereof" following "the filing of".

53-17-15. Withdrawal of foreign corporation.

    A. A foreign corporation authorized to transact business in this state may withdraw
from this state upon procuring from the secretary of state a certificate of withdrawal. In
order to procure the certificate of withdrawal, the foreign corporation shall deliver to the
secretary of state an application for withdrawal, which shall set forth:

         (1) the name of the corporation and the state or country under the laws of
which it is incorporated;

         (2) a statement that the corporation is not transacting business in this state;

         (3) a statement that the corporation surrenders its authority to transact
business in this state;

         (4) a statement that the corporation revokes the authority of its registered
agent in this state to accept service of process and consents that service of process in
an action, suit or proceeding based upon a cause of action arising in this state during
the time the corporation was authorized to transact business in this state may thereafter
be made on the corporation by service thereof on the secretary of state;

         (5) an address to which the secretary of state may mail a copy of a process
against the corporation that may be served on it;
         (6) a statement of the aggregate number of shares that the corporation has
authority to issue, itemized by class and by series, if any, within each class, as of the
date of the application;

         (7) a statement of the aggregate number of issued shares, itemized by class
and by series, if any, within each class, as of the date of the application;

         (8) a statement confirming that the corporation has resigned as a registered
agent or is not currently a registered agent for any entity registered in New Mexico; and

         (9) additional information as necessary or appropriate in order to enable the
secretary of state to determine and assess any unpaid fees payable by the foreign
corporation.

    B. The application for withdrawal shall be made on forms prescribed by the
secretary of state or on forms containing substantially the same information as forms
prescribed by the secretary of state and shall be executed by the corporation by an
authorized officer of the corporation or, if the corporation is in the hands of a receiver or
trustee, shall be executed on behalf of the corporation by the receiver or trustee.

History: 1953 Comp., § 51-30-14, enacted by Laws 1967, ch. 81, § 116; 1977, ch. 103,
§ 16; 1983, ch. 304, § 68; 2001, ch. 200, § 70; 2003, ch. 318, § 45; 2019, ch. 159, § 4.

                                               ANNOTATIONS

The 2019 amendment, effective July 1, 2019, provided that a foreign corporation
desiring to withdraw from this state must procure from the secretary of state a certificate
of withdrawal and must deliver to the secretary of state an application for withdrawal,
which must include confirmation that the corporation has resigned as a registered agent
or is not currently a registered agent for any entity registered in New Mexico; changed
"commission" to "secretary of state" throughout; and in Subsection A, added a new
Paragraph A(8) and redesignated former Paragraph A(8) as Paragraph A(9).

Compiler's notes. -- This section is derived from Section 119 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, deleted "or franchise taxes" following
"any unpaid fees" in Paragraph A(8); in Subsection B, inserted "or on forms containing
substantially the same information as forms prescribed by the commission" following "by
the commission" and inserted "of the corporation" following "an authorized officer".

The 2001 amendment, effective July 1, 2001, inserted "a statement" at the beginning of
Paragraphs A(2) to (4); in Subsection B, substituted "an authorized officer" for "its
president or a vice president and by its secretary or an assistant secretary and verified
by one of the officers signing the application", and deleted "and verified by him" at the
end of the subsection.
The 1983 amendment, effective June 17, 1983, in Subsection A, substituted "by class
and by series, if any, within each class" for "by classes, par value of shares, shares
without par value and series, if any, within a class" in Paragraphs (6) and (7), deleted
former Paragraph (8), which read "a statement, expressed in dollars, of the amount of
stated capital of the corporation, as of the date of the application," and redesignated
former Paragraph (9) as present Paragraph (8).

Jurisdiction despite withdrawal of company. -- In action for damages for breach of
contract, court acquired jurisdiction of the person or the res although the contracts were
entered into outside the state and although the cause of action, if any, accrued after the
company had ceased to do business in the state because the cause of action was for
breach of a contract entered into while the company was legally authorized to transact
business in the state. Wester v. Trailmobile Co., 1955-NMSC-004, 59 N.M. 73, 279 P.2d
526.

The Business Corporation Act does not compel a foreign corporation to consent
to general personal jurisdiction. -- In consolidated interlocutory appeals where the
district court denied petitioners' motions to dismiss claims against them for lack of
general or specific personal jurisdiction, and where the court of appeals concluded that
general personal jurisdiction was proper over petitioners, four foreign corporations, all of
whom are manufacturers of automobiles or automobile components and registered to
transact business under New Mexico's Business Corporation Act (BCA), §§ 53-17-1
through 53-17-20 NMSA 1978, the New Mexico supreme court reversed the court of
appeals because any legislative intent to require a foreign corporation to consent to
general personal jurisdiction should be clearly, unequivocally, and unambiguously
expressed in the statutory text, and the language of the BCA relating to a foreign
corporation's equal rights and responsibilities under New Mexico law does not clearly,
unequivocally, and unambiguously express an intent to require a foreign corporation to
consent to general personal jurisdiction in New Mexico. Chavez v. Bridgestone
Americas Tire Operations, LLC, 2022-NMSC-006, rev'g 2019-NMCA-023, 458 P.3d
569; A-1-CA-36442, mem. op. (Ct. App. Dec. 21, 2018) (nonprecedential); A-1-CA-
35910, mem. op. (Ct. App. Dec. 21, 2018) (nonprecedential); and A-1-CA-37818 (Ct.
App. Jan 18, 2019), and overruling Werner v. Wal-Mart Stores, Inc., 1993-NMCA-112,
116 N.M. 229, 861 P.2d 270.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §§
278 to 280.

Withdrawal of foreign corporation from state as affecting conditions under which it may
be readmitted to do business in state and its rights and duties if readmitted, 110 A.L.R.
528.

Withdrawal of foreign corporation from state as tolling statute of limitations as to action
against corporation, 133 A.L.R. 774.

53-17-16. Filing of application for withdrawal.
    A. An original of an application for withdrawal together with a copy, which may be
signed, photocopied or conformed, shall be delivered to the commission [secretary of
state]. If the commission [secretary of state] finds that the application conforms to the
provisions of the Business Corporation Act and that the corporation has complied with
the Tax Administration Act [Chapter 7, Article 1 NMSA 1978] and has paid all
contributions required by the Unemployment Compensation Law [Chapter 51 NMSA
1978], it shall, when all fees have been paid:

         (1) endorse on the original and copy the word "filed" and the month, day and
year of the filing;

         (2) file the original in its office; and

         (3) issue a certificate of withdrawal to which it shall affix the file-stamped
copy.

    B. The certificate of withdrawal, together with the file-stamped copy of the
application for withdrawal affixed to it, shall be returned by the commission [secretary of
state] to the corporation or its representative. Upon the issuance of the certificate of
withdrawal, the authority of the corporation to transact business in this state shall cease.

History: 1953 Comp., § 51-30-15, enacted by Laws 1967, ch. 81, § 117; 2001, ch. 200,
§ 71; 2003, ch. 318, § 46.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 120 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, deleted "and franchise taxes" following
"when all fees" in Subsection A.

The 2001 amendment, effective July 1, 2001, deleted the provision that the application
be executed in duplicate and changed the provisions of the section so that instead of
explaining the procedures for processing duplicates, it explains procedures for
processing the original and a copy of the original.

53-17-17. Revocation of certificate of authority.

    A. The certificate of authority of a foreign corporation to transact business in this
state may be revoked by the commission [secretary of state] upon the conditions
prescribed in this section when:

         (1) the corporation has failed to file its annual report timely or has failed to pay
any fees or penalties thereon when they became due;

         (2) the corporation has failed to appoint and maintain a registered agent in
this state as required by the Business Corporation Act [Chapter 53, Articles 11 to 18
NMSA 1978];

         (3) the corporation has failed, after change of its registered office or
registered agent, to file in the office of the commission [secretary of state] a statement
of the change as required by the Business Corporation Act;

         (4) the corporation has failed to file in the office of the commission [secretary
of state] any amendment to its articles of incorporation or any articles of merger within
the time prescribed by the Business Corporation Act; or

         (5) a misrepresentation has been made of any material matter in an
application, report, affidavit or other document submitted by the corporation pursuant to
the Business Corporation Act.

    B. A certificate of authority of a foreign corporation shall not be revoked by the
commission [secretary of state] unless:

         (1) it has given the corporation not less than sixty days' notice thereof by mail
addressed to the corporation's mailing address as shown in the most recent annual
report filed with the commission [secretary of state]; and

         (2) the corporation fails, prior to revocation, to file the annual report or pay the
fees or penalties or file the required statement of change of registered agent or
registered office or file the articles of amendment or articles of merger or correct the
misrepresentation.

History: 1953 Comp., § 51-30-16, enacted by Laws 1967, ch. 81, § 118; 1977, ch. 103,
§ 17; 2003, ch. 318, § 47.

                                               ANNOTATIONS
Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 121 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, deleted "or franchise taxes" following
"pay any fees" in Paragraph A(1); in Subsection B, substituted "A" for "No" at the
beginning, inserted "not" following "foreign corporation shall"; substituted "the
corporation's mailing address as shown in the most recent" for "its registered office in
this state and also either to the principal office of the corporation in the state or country
under the laws of which it is incorporated or to the principal office of the corporation as
each address is shown in the last" following "mail addressed to"; and deleted "franchise
taxes" following "pay the fees" in Paragraph B(2).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §
189.

19 C.J.S. Corporations § 919.

53-17-18. Issuance of certificate of revocation; reinstatement.

    A. Upon revoking a certificate of authority, the commission [secretary of state] shall:

         (1) issue a certificate of revocation in duplicate;

         (2) file one of the certificates in its office; and

         (3) mail a notice of revocation accompanied by one of the certificates to the
corporation at the corporation's mailing address as shown in the most recent annual
report filed with the commission [secretary of state].

    B. Upon the issuance of the certificate of revocation, the authority of the corporation
to transact business in this state shall cease.

    C. A corporation administratively revoked under Section 53-17-17 NMSA 1978 may
apply to the commission [secretary of state] for reinstatement within two years after the
effective date of revocation. The application shall:
         (1) recite the name of the corporation and the effective date of its
administrative revocation;

         (2) state that the ground or grounds for revocation either did not exist or have
been eliminated; and

         (3) state that the corporation name satisfies the requirements of Section 53-
17-3 NMSA 1978.

    D. If the commission [secretary of state] determines that the application contains the
information required by Subsection C of this section and that the information is correct,
it shall cancel the certificate of revocation and prepare a certificate of reinstatement that
recites its determination and the effective date of reinstatement, file the original of the
certificate and serve a copy on the corporation.

    E. When the reinstatement is effective, it relates back to and takes effect as of the
effective date of the administrative revocation and the corporation resumes carrying on
its business as if the administrative revocation had never occurred.

History: 1953 Comp., § 51-30-17, enacted by Laws 1967, ch. 81, § 119; 1977, ch. 103,
§ 18; 2001, ch. 200, § 72; 2003, ch. 318, § 48.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 122 of the ABA Model
Business Corporation Act.

The 2003 amendment, effective July 1, 2003, substituted "duplicate" for "triplicate" in
Paragraph A(1); substituted "the corporation's mailing address as shown in the most
recent" for "its registered office in this state and also either to its principal office in the
state or country under the laws of which it is incorporated or to the principal office of the
corporation at the addresses as shown in the last" following "the corporation at".

The 2001 amendment, effective July 1, 2001, inserted "reinstatement" in the section
heading; and added Subsections C, D and E.
53-17-19. Application to corporations heretofore authorized to
transact business in this state.

    Foreign corporations which are authorized to transact business in this state at the
time the Business Corporation Act takes effect, for a purpose or purposes for which a
corporation might secure such authority under the Business Corporation Act, shall,
subject to the limitations set forth in their respective certificates of authority, be entitled
to all the rights and privileges applicable to foreign corporations procuring certificates of
authority to transact business in this state under the Business Corporation Act, and from
the time the Business Corporation Act takes effect, the corporations are subject to all
the limitations, restrictions, liabilities and duties prescribed in the Business Corporation
Act for foreign corporations procuring certificates of authority to transact business in this
state under the Business Corporation Act.

History: 1953 Comp., § 51-30-18, enacted by Laws 1967, ch. 81, § 120.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 123 of the ABA Model
Business Corporation Act.

53-17-20. Transacting business without certificate of authority.

    A. No foreign corporation transacting business in this state without a certificate of
authority shall be permitted to maintain any action, suit or proceeding in any court of this
state, until the corporation has obtained a certificate of authority. Nor shall any action,
suit or proceeding be maintained in any court of this state by any successor or assignee
of the corporation on any right, claim or demand arising out of the transaction of
business by the corporation in this state, until a certificate of authority has been
obtained by the corporation or by a corporation which has acquired all or substantially
all of its assets.

    B. The failure of a foreign corporation to obtain a certificate of authority to transact
business in this state does not impair the validity of any contract or act of the
corporation, and does not prevent the corporation from defending any action, suit or
proceeding in any court of this state.

    C. A foreign corporation which transacts business in this state without a certificate of
authority is liable to this state, for the years or parts thereof during which it transacted
business in this state without a certificate of authority, in an amount equal to all fees and
franchise taxes which would have been imposed upon the corporation had it applied for
and received a certificate of authority to transact business in this state as required by
the Business Corporation Act, and thereafter filed all annual reports required by it, plus
all penalties for failure to pay the fees and franchise taxes, plus a civil penalty of two
hundred dollars ($200) for each offense.
History: 1953 Comp., § 51-30-19, enacted by Laws 1967, ch. 81, § 121; 1969, ch. 22, §
5.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 124 of the ABA Model
Business Corporation Act.

A foreign corporation is not required to allege that it has obtained a certificate of
authority in order to state a valid claim for relief. Capco Acquisub, Inc. v. Greka Energy
Corp., 2008-NMCA-153, 145 N.M. 328, 198 P.3d 354, cert. denied, 2008-NMCERT-
010, 145 N.M. 524, 201 P.3d 855.

Section bars foreign corporation from maintaining any action in any New Mexico
state court until it has obtained a certificate of authority. Riblet Tramway Co. v. Monte
Verde Corp., 453 F.2d 313 (10th Cir. 1972).

Contracts of unauthorized foreign corporation not void. -- Contracts made by
unauthorized foreign corporation in the state are not void, rather the corporation is
merely prevented from suing upon them until it complies. Riblet Tramway Co. v. Monte
Verde Corp., 453 F.2d 313 (10th Cir. 1972).

Acts not constituting transacting business in state. -- Where the initial contact
between parties is through the mails, and, thereafter, the parties execute a contract
signed by plaintiff in Spokane and then by defendants in New Mexico, plaintiff's foreign
corporation is not transacting business in New Mexico and may sue under this section.
Riblet Tramway Co. v. Monte Verde Corp., 453 F.2d 313 (10th Cir. 1972).

Texas company's representative in New Mexico who only solicits offers for contracts
which are relayed back to Texas for acceptance is not transacting business in New
Mexico and is not barred from suing in New Mexico on contract by this section. Don J.
Cummings Co. v. Aluminum Mfg. Corp., 371 F.2d 118 (10th Cir. 1967).

Making of a sale which is primarily interstate in nature does not of itself subject the
corporation to the state's certification provisions. Riblet Tramway Co. v. Monte Verde
Corp., 453 F.2d 313 (10th Cir. 1972).

Acceptance of offer in state. -- No cases actually consider the sole act of accepting
an offer in New Mexico as enough to require certification. Riblet Tramway Co. v. Monte
Verde Corp., 453 F.2d 313 (10th Cir. 1972).

Unauthorized business may not compel arbitration. -- Texas corporations
unauthorized to do business in New Mexico were unable to compel two dentists to
arbitrate a dispute arising from an alleged breach of architectural and construction
contracts for the construction of dental offices, because arbitration is in the nature of
specific performance and the unauthorized corporations cannot specifically perform, as
they are not licensed to do business in the state. Shaw v. Kuhnel & Assocs., Inc., 1985-
NMSC-008, 102 N.M. 607, 698 P.2d 880.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 36 Am. Jur. 2d Foreign Corporations §§
240 to 256.

Applicability to foreign corporations of statute precluding defense of want of legal
organization, 73 A.L.R. 1202.

Right to assert mechanic's lien as affected by failure of foreign corporation to comply or
delay in complying with condition of its right to do business, 95 A.L.R. 367.

Failure to procure occupational or business license or permit as affecting validity or
enforceability of contract, 118 A.L.R. 646.

Foreign corporation's rights in respect of property sold under conditional sale as
affected by failure to comply with conditions of doing business in state, 130 A.L.R. 999.

Federal court, right of foreign corporation or its assignee to maintain an action which it
could not have maintained in state court because of noncompliance with conditions of
doing business in state, 133 A.L.R. 1171.

Rule that in general inhibits foreign corporation which has failed to comply with
conditions of doing or continuing business in state, or domestic corporation which has
forfeited its charter, from maintaining action, as applicable to action at law to vindicate
corporation's property rights against tort-feasor, 136 A.L.R. 1160.

Effect of execution of foreign corporation's contract which, while executory, was
unenforceable because of noncompliance with conditions of doing business in state, 7
A.L.R.2d 256.

Rights of assignee or subsequent holder of negotiable paper executed to a foreign
corporation doing business in state without compliance with local requirements, 80
A.L.R.2d 465.

Construction work by foreign corporation as doing business for purposes of statute
requiring foreign corporation to qualify as condition of access to local courts, 90
A.L.R.3d 929.

What constitutes doing business within state for purposes of state "closed-door" statute
barring unqualified or unregistered foreign corporation from local courts - modern cases,
88 A.L.R.4th 466.

Application of statute denying access to courts or invalidating contracts where
corporation fails to comply with regulatory statute as affected by compliance after
commencement of action, 23 A.L.R.5th 744.
18 C.J.S. Corporations § 897 et seq.

53-17-21. Repealed.

                                               ANNOTATIONS

Repeals. -- Laws 1993, ch. 318, § 6 repealed 53-17-21 NMSA 1978, as enacted by
Laws 1991, ch. 170, § 10, requiring any person elected or appointed to a board of
directors to file an affidavit with the corporation stating that he consents to be a member
of the board of directors, effective June 18, 1993. For provisions of former section, see
the 1992 NMSA 1978 on NMOneSource.com.

ARTICLE 18
Business Corporations; Miscellaneous Provisions

53-18-1. Powers of commission [secretary of state].

    The commission [secretary of state] has the power and authority reasonably
necessary to enable it to administer the Business Corporation Act efficiently and to
perform the duties therein imposed upon it.

History: 1953 Comp., § 51-31-1, enacted by Laws 1967, ch. 81, § 122.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 139 of the ABA Model
Business Corporation Act.

53-18-2. Appeal from commission [secretary of state].

    A. If the commission [secretary of state] fails to approve any articles of
incorporation, amendment, merger, consolidation or dissolution or any other document
required by the Business Corporation Act to be approved by the commission [secretary
of state] before it is filed in its office, it shall, within fifteen working days after the delivery
thereof to it, give written notice of its disapproval to the person or corporation, domestic
or foreign, delivering the same, specifying the reasons therefor. From the disapproval,
the person or corporation may appeal to the district court pursuant to the provisions of
Section 39-3-1.1 NMSA 1978.

    B. If the commission [secretary of state] revokes the certificate of authority to
transact business in this state of any foreign corporation pursuant to the provisions of
the Business Corporation Act, the foreign corporation may appeal to the district court
pursuant to the provisions of Section 39-3-1.1 NMSA 1978.

History: 1953 Comp., § 51-31-2, enacted by Laws 1967, ch. 81, § 123; 1983, ch. 304, §
69; 1998, ch. 55, § 49; 1999, ch. 265, § 52.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 140 of the ABA Model
Business Corporation Act.

Cross references. -- For procedures governing administrative appeals to the district
court, see Rule 1-074 NMRA.

The 1999 amendment, effective July 1, 1999, substituted "Section 39-3-1.1" for
"Section 12-8A-1" in Subsections A and B.

The 1998 amendment, effective September 1, 1998, rewrote this section to the extent
that a detailed comparison is impracticable.

The 1983 amendment, effective June 17, 1983, substituted "fifteen working days" for
"ten days" near the middle of the first sentence of Subsection A.

Law reviews. -- For article, "How to Stand Still Without Really Trying: A Critique of the
New Mexico Administrative Procedure Act," see 10 Nat. Res. J. 840 (1970).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 19 C.J.S. Corporations §§ 901, 919.
53-18-3. Issuance of certificate of good standing and compliance.

    The commission [secretary of state] may issue a certificate of good standing and
compliance if the corporation requesting the certificate has paid all fees due at the time
of the request.

History: 1953 Comp., § 51-31-2.1, enacted by Laws 1977, ch. 103, § 19; 1983, ch. 304,
§ 70.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 1983 amendment, effective June 17, 1983, deleted "franchise taxes and"
preceding "fees".

53-18-4. Certificates and certified copies to be received in evidence.

    All certificates issued by the commission [secretary of state] in accordance with the
provisions of the Business Corporation Act, and all copies of documents filed in its office
in accordance with the provisions of the Business Corporation Act, when certified by it,
shall be taken and received in all courts, public offices and official bodies as prima facie
evidence of the facts therein stated, and may be filed and recorded with the respective
county clerks. A certificate by the commission [secretary of state] under its seal, as to
the existence or nonexistence of the facts relating to corporations shall be taken and
received in all courts, public offices and official bodies as prima facie evidence of the
existence or nonexistence of the facts therein stated.

History: 1953 Comp., § 51-31-3, enacted by Laws 1967, ch. 81, § 124.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-18-5. Forms to be furnished by commission [secretary of state].

    Forms for all documents to be filed in the office of the commission [secretary of
state] may be furnished by the commission [secretary of state] on request therefor, but
the use thereof unless otherwise specifically prescribed by law, is not mandatory.

History: 1953 Comp., § 51-31-4, enacted by Laws 1967, ch. 81, § 125.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 142 of the ABA Model
Business Corporation Act.

53-18-6. Greater voting requirements.

    Whenever a section of the Business Corporation Act specifies the vote of the
holders of a certain proportion of the shares, or of any class or series thereof, for the
taking of any action by the shareholders of a corporation, the articles of incorporation
may require a greater proportion. An amendment to the articles of incorporation which
adds, changes or deletes a provision for a greater proportion must be adopted by the
same vote as would be required to take action under the provision to be adopted or then
in effect, whichever is greater.

History: 1978 Comp., § 53-18-6, enacted by Laws 1983, ch. 304, § 71.

                                               ANNOTATIONS

Repeals and reenactments. -- Laws 1983, ch. 304, § 71, repealed former 53-18-6
NMSA 1978, relating to greater voting requirements, and enacted the above section.
Compiler's notes. -- This section is derived from Section 143 of the ABA Model
Business Corporation Act.

Law reviews. -- For article, "1983 Amendments to the New Mexico Business
Corporation Act and Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- Validity, construction, and effect of
provision in charter or bylaw requiring supermajority vote, 80 A.L.R.4th 667.

53-18-6.1. Voting requirements; existing corporations.

    A. The provisions of the 1983 amendments to the Business Corporation Act
lowering voting requirements from a two-thirds majority to a simple majority shall not
apply to a corporation that was in existence on June 17, 1983, until the corporation, by
amendment to its articles of incorporation, chooses to become subject to those
provisions, except as provided in Subsection B of this section.

    B. Corporations in existence on June 17, 1983 that, as of July 1, 2001, are listed on
a national securities exchange, or whose shares are publicly traded on an over-the-
counter basis and have more than four hundred fifty shareholders of record, shall be
subject to the lower voting requirements established by the 1983 amendments to the
Business Corporation Act upon adoption of a bylaws provision by the board of directors
making the corporation subject to the lower voting requirements. The bylaws provision
adopted pursuant to this subsection may be rescinded only by submission to the
shareholders of a proposal to amend the articles of incorporation to establish a greater
voting requirement in accordance with the provisions of Section 53-18-6 NMSA 1978,
which proposal may be made by any shareholder of record.

History: 1978 Comp., § 53-18-6.1, enacted by Laws 1983, ch. 304, § 72; 2001, ch. 200,
§ 73.

                                               ANNOTATIONS

Compiler's notes. -- The phrase "the 1983 amendments to the Business Corporation
Act lowering voting requirements" refers to those sections of the Business Corporation
Act, 53-11-1 to 53-18-12 NMSA 1978, amended by Laws 1983, Chapter 304, i.e., 53-
13-2, 53-14-3, 53-15-2, 53-16-3 and 53-16-8 NMSA 1978.

The 2001 amendment, effective July 1, 2001, inserted the Subsection A designation
and added Subsection B; in Subsection A, substituted "June 17, 1983" for "the effective
date of this section" and inserted "except as provided in Subsection B of this section".

Law reviews. -- For article, "1983 Amendments to the New Mexico Business
Corporation Act and Related Statutes," see 14 N.M.L. Rev. 371 (1984).

Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253 (1987).
Am. Jur. 2d, A.L.R. and C.J.S. references. -- Personal liability of stockholder, officer,
or agent for debt of foreign corporation doing business in the state, 27 A.L.R.4th 387.

53-18-7. Waiver of notice.

    Whenever any notice is required to be given to any shareholder or director of a
corporation under the provisions of the Business Corporation Act or under the
provisions of the articles of incorporation or bylaws of the corporation, a waiver thereof
in writing signed by the person or persons entitled to the notice, whether before or after
the time stated therein, is equivalent to the giving of the notice.

History: 1953 Comp., § 51-31-6, enacted by Laws 1967, ch. 81, § 127.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 144 of the ABA Model
Business Corporation Act.

Am. Jur. 2d, A.L.R. and C.J.S. references. -- 18A Am. Jur. 2d Corporations §§ 467 to
469, 652, 653, 969, 971, 972, 980 to 983, 1082 to 1084, 1086, 1087; 18B Am. Jur. 2d
Corporations §§ 1368, 1370, 1459, 1480, 1481.

18 C.J.S. Corporations § 367.

53-18-8. Action by shareholders without a meeting.

    Any action required by the Business Corporation Act to be taken at a meeting of the
shareholders of a corporation, or any action which may be taken at a meeting of the
shareholders, may be taken without a meeting if a consent in writing, setting forth the
action so taken, is signed by all of the shareholders entitled to vote with respect to the
subject matter thereof. Such consent has the same effect as a unanimous vote of
shareholders, and may be stated as such in any articles or document filed with the
commission [secretary of state] under the Business Corporation Act.

History: 1953 Comp., § 51-31-7, enacted by Laws 1967, ch. 81, § 128.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Compiler's notes. -- This section is derived from Section 145 of the ABA Model
Business Corporation Act.

53-18-9. Unauthorized assumption of corporate powers.

    All persons who assume to act as a corporation without authority to do so are jointly
and severally liable for all debts and liabilities incurred or arising as a result thereof.

History: 1953 Comp., § 51-31-8, enacted by Laws 1967, ch. 81, § 129.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 146 of the ABA Model
Business Corporation Act.

Law reviews. -- Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253
(1987).

53-18-10. Application to existing corporations.

    A. The provisions of the Business Corporation Act apply to all existing corporations
organized under any general act of this state providing for the organization of
corporations for a purpose or purposes for which a corporation might be organized
under the Business Corporation Act, where the power has been reserved to amend,
repeal or modify the act under which the corporation was organized and where the act
is repealed by the Business Corporation Act.

    B. The provisions of the Business Corporation Act also apply to the special class of
corporations known as "no stockholder liability" corporations organized under Laws
1905, Chapter 79, Section 23 [53-2-8 NMSA 1978], as amended, but no stockholder's
liability for unpaid stock shall attach to any shares issued by such corporations which
continue to comply with the requirements set forth in Laws 1905, Chapter 79, Section
23, as amended.

History: 1953 Comp., § 51-31-9, enacted by Laws 1967, ch. 81, § 130.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived in part from Section 147 of the ABA Model
Business Corporation Act.
Legislative intent. -- The legislature intends the Business Corporation Act to operate
retrospectively except as it may affect substantive rights. Prager v. Prager, 1969-
NMSC-149, 80 N.M. 773, 461 P.2d 906.

Law reviews. -- Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253
(1987).

53-18-11. Application to foreign and interstate commerce.

    The provisions of the Business Corporation Act apply to commerce with foreign
nations and among the several states only insofar as permitted under the provisions of
the constitution of the United States.

History: 1953 Comp., § 51-31-10, enacted by Laws 1967, ch. 81, § 131.

                                               ANNOTATIONS

Compiler's notes. -- This section is derived from Section 148 of the ABA Model
Business Corporation Act.

53-18-12. Reservation of power.

    The legislature reserves power to amend, repeal or modify all or any part of the
Business Corporation Act at any time and such changes shall be binding upon all
corporations subject to the provisions of the Business Corporation Act.

History: 1953 Comp., § 51-31-11, enacted by Laws 1967, ch. 81, § 132.

                                               ANNOTATIONS

Severability. -- Laws 1967, ch. 81, § 134, provided for the severability of the act if any
part or application thereof is held invalid.

Compiler's notes. -- This section is derived from Section 149 of the ABA Model
Business Corporation Act.

ARTICLE 19
Limited Liability Companies

53-19-1. Short title.

    Chapter 53, Article 19 NMSA 1978 may be cited as the "Limited Liability Company
Act".

History: Laws 1993, ch. 280, § 1; 1998, ch. 108, § 29.
                                               ANNOTATIONS

Cross references. -- For Registered Limited Liability Partnerships, see 54-1A-1101
NMSA 1978 et seq.

The 1998 amendment, effective January 1, 1999, substituted "Chapter 53, Article 19
NMSA 1978" for "Sections 1 through 74 of this act" at the beginning of the section.

Law reviews. -- For comment, "Limited Liability Companies in New Mexico," see 27
N.M.L. Rev. 615 (1997).

Am. Jur. 2d, A.L.R. and C.J.S. references. -- Construction and application of limited
liability company acts, 79 A.L.R.5th 689.

53-19-2. Definitions.

    As used in the Limited Liability Company Act:

    A. "articles of organization" means the original or restated articles filed pursuant to
the Limited Liability Company Act and any amendments to those articles, including
articles of merger or consolidation;

    B. "corporation" means an organization incorporated under the laws of New Mexico
or a foreign corporation;

    C. "commission" means the public regulation commission [secretary of state] or its
designee;

    D. "court" means a court having jurisdiction in the case;

    E. "event of dissociation" means an event that causes a person to cease to be a
member of a limited liability company;

    F. "foreign corporation" means a corporation that is organized under the laws of
another state or a foreign country;

    G. "foreign limited liability company" means a person that is:

         (1) an unincorporated association;

         (2) organized under the laws of another state or foreign country;

         (3) organized under a statute pursuant to which an association may be
formed that affords to each of its members limited liability with respect to the liabilities of
the person; and
         (4) is not required to be registered or organized under the laws of New
Mexico other than the Limited Liability Company Act;

    H. "foreign limited partnership" means a limited partnership formed under the laws
of another state or a foreign country;

    I. "limited liability company" or "domestic limited liability company" means an
organization formed pursuant to the provisions of the Limited Liability Company Act;

    J. "limited liability company interest" means a member's or assignee's right to
receive distributions and a return of capital from the limited liability company. A
member's or assignee's limited liability company interest does not include rights the
member or assignee has on account of other matters, such as a right to receive accrued
salary for services the member or assignee rendered to, repayment of a loan the
member or assignee made to or indemnification by the limited liability company;

    K. "limited partnership" means a limited partnership under the laws of New Mexico
or a foreign limited partnership;

    L. "manager" means, with respect to a limited liability company that has included a
statement in its articles of organization that it is to be managed by a manager, the
person designated as manager in accordance with the articles of organization or an
operating agreement;

    M. "member" means a person who has been admitted to membership in a limited
liability company and who has not dissociated from that company;

    N. "membership interest" or "interest" means a member's limited liability company
interest and his rights to participate in management and control of the limited liability
company;

    O. "operating agreement" means a written agreement providing for the conduct of
the business and affairs of a limited liability company and that agreement as amended
in writing;

    P. "person" means an individual, a general partnership, a limited partnership, a
domestic or foreign limited liability company, a trust, an estate, an association, a
corporation or any other legal entity; and

    Q. "state" means a state, territory or possession of the United States, the District of
Columbia or the commonwealth of Puerto Rico.

History: Laws 1993, ch. 280, § 2; 1998, ch. 104, § 1; 1998, ch. 108, § 30.

                                               ANNOTATIONS
Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

1998 amendments. -- Laws 1998, ch. 104, § 1, effective July 1, 1998, and Laws 1998,
ch. 108, § 30, effective January 1, 1999, enacted amendments to this section. Pursuant
to 12-1-8 NMSA 1978, Laws 1998, ch. 108, § 30, as the last act signed by the governor,
has been compiled into the NMSA 1978.

Laws 1998, ch. 108, § 30, effective January 1, 1999, substituted "public regulation" for
"state corporation" near the beginning of Subsection C, substituted "a person" for "an
entity" near the end of Subsection G, and substituted "person" for "entity" near the end
of Paragraph G(3).

Laws 1998, ch. 104, § 1, effective July 1, 1998, substituted "an unincorporated
organization of one or more persons" for "an organization" in Subsection I and deleted
"or managers" following "manager" and "or persons" following "person" and substituted
"manager" for "managers" following "designated as" in Subsection L.

53-19-3. Name.

    A. The name of a limited liability company and, if different, the name under which it
proposes to transact business in New Mexico shall be stated in its articles of
organization and shall contain the words "limited liability company" or "limited company"
or the abbreviation "L.L.C.", "LLC", "L.C." or "LC". The word "limited" may be
abbreviated as "ltd." and the word "company" may be abbreviated as "co.".

    B. A limited liability company name shall be distinguishable from the name of any:

         (1) limited liability company, limited partnership or corporation existing under
the laws of this state;

         (2) foreign limited liability company or corporation authorized to transact
business in this state; and

         (3) name reserved under Section 53-19-4 NMSA 1978.
    C. The provisions of Subsection B of this section do not apply if the applicant files
with the secretary of state a certified copy of a final decree of a court establishing the
prior right of the limited liability company to use such name in this state.

History: Laws 1993, ch. 280, § 3; 1995, ch. 213, § 1; 2021, ch. 68, § 7.

                                               ANNOTATIONS

The 2021 amendment, effective July 1, 2021, required that a limited liability company
include, in its articles of organization any name under which the limited liability company
proposes to transact business in New Mexico if different than the name of the limited
liability company; in Subsection A, after "name of a limited liability company", added
"and, if different, the name under which it proposes to transact business in New
Mexico"; and in Subsection C, after "files with the", deleted "commission" and added
"secretary of state".

The 1995 amendment, effective June 16, 1995, added the language beginning "or the
abbreviation" at the end of the first sentence in Subsection A and, in Subsection B,
deleted "limited partnership" preceding "or corporation" in Paragraph (2) and substituted
"under Section 53-19-4 NMSA 1978" for "or registered under Section 4 of the Limited
Liability Company Act Chapter 53, Article 11, NMSA 1978 or Chapter 57, Article 2 or
Article 3 NMSA 1978" in Paragraph (3).

53-19-4. Reservation of name.

    A. The exclusive right to use a name may be reserved by:

         (1) a person intending to organize a limited liability company and to adopt that
name;

         (2) a limited liability company or a foreign limited liability company registered
in New Mexico that intends to adopt that name;

         (3) a foreign limited liability company intending to register in New Mexico and
to adopt that name; or

         (4) a person intending to organize a foreign limited liability company and to
have it registered in New Mexico and to adopt that name.

    B. The reservation shall be made by filing with the commission [secretary of state]
an application executed by the applicant to reserve a specified name. If the commission
[secretary of state] finds that the name is available for use by a domestic or foreign
limited liability company, it shall reserve the name for the exclusive use of the applicant
for a period of one hundred twenty days after the date the application is filed with the
commission [secretary of state].
    C. The right to the exclusive use of a reserved name may be transferred to another
person by filing with the commission [secretary of state] a notice of the transfer
executed by the applicant for whom the name was reserved and specifying the name to
be transferred and the name and address of the transferee. The transfer shall not
extend the term during which the name is reserved.

History: Laws 1993, ch. 280, § 4; 2003, ch. 318, § 49.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, deleted former Subsection C which read:
"The holder of a reserved name may renew the reservation for successive periods of
one hundred twenty days each."; and redesignated former Subsection D as present
Subsection C.

53-19-5. 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 that 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 having 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 commission [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) the 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 public regulation
commission [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 public regulation commission [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 commission [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 public regulation commission
[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 commission [secretary
of state]. The resigning registered agent's appointment terminates thirty days after
receipt of the notice by the commission [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 public regulation commission [secretary
of state] of a change in the street address of its principal place of business by delivering
a written statement to the commission [secretary of state] setting forth such change.

History: Laws 1993, ch. 280, § 5; 2003, ch. 318, § 50.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, substituted "statement" for "affidavit" in
Subparagraph B(4)(d); deleted former Subsection C concerning change of address of
the agent's place of business; added present Subsection C; inserted "public regulation"
preceding "commission" in Subsections D to F.

Personal responsibility of agent. -- It is possible in New Mexico for a corporate agent
to interfere wrongfully with his corporation's contacts and to be held personally
responsible for his acts. Bogle v. Summit Inv. Co., 2005-NMCA-024, 137 N.M. 80, 107
P.3d 520.

53-19-6. Nature and duration of business.

    A limited liability company may conduct or promote any lawful business or purpose.
If the purpose for which a limited liability company is organized makes it subject to
provisions of other laws, the limited liability company shall also be subject to such
provisions. The duration of existence of a limited liability company may be perpetual or
may be limited to a definite term or until completion of a particular undertaking.

History: Laws 1993, ch. 280, § 6.

53-19-7. Formation.

    One or more persons may form a limited liability company by filing articles of
organization with the commission [secretary of state]. The person or persons forming
the limited liability company need not be members of the limited liability company. One
or more persons may own and operate the limited liability company. A single member
limited liability company formed prior to July 1, 1999 is a lawful entity.

History: Laws 1993, ch. 280, § 7; 1999, ch. 132, § 1.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 1999 amendment, effective July 1, 1999, inserted "person or" in the second
sentence and added the third and fourth sentences.

53-19-8. Articles of organization.

    The articles of organization shall set forth:

    A. a name for the limited liability company that satisfies the requirements of Section
53-19-3 NMSA 1978;

    B. the street address of the initial registered office and the name of the initial
registered agent at that address and the street address of the limited liability company's
current principal place of business, if different from the address of its registered office;

    C. the period of duration, if other than perpetual;
    D. if management of the limited liability company is vested to any extent in a
manager, a statement to that effect;

    E. if the limited liability company may carry on its business and affairs as a single
member limited liability company, a statement to that effect; and

    F. any other provision that the persons signing the articles choose to include in the
articles, including provisions for the regulation of the internal affairs of the limited liability
company.

History: Laws 1993, ch. 280, § 8; 1999, ch. 132, § 2; 2003, ch. 318, § 51.

                                               ANNOTATIONS

The 2003 amendment, effective July 1, 2003, in Subsection B, inserted "initial"
preceding "registered" twice, inserted "at that address" preceding "and the street";
rewrote Subsection C; deleted "and of the extent to which management is so vested" at
the end of Subsection D; in Subsection E, inserted "may carry on its business and
affairs as" preceding "a single member", inserted "a statement to that effect" near the
end.

The 1999 amendment, effective July 1, 1999, substituted "Section 53-19-3 NMSA
1978" for "Section 3 of the Limited Liability Company Act" in Subsection A, added
Subsection E, and redesignated former Subsection E as Subsection F.

53-19-9. Filing.

    A. The organizer or organizers of a limited liability company shall file with the
commission [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 Limited Liability
Company Act.

    B. The commission [secretary of state] may accept a facsimile transmission for
filing.

    C. If the commission [secretary of state] determines that the documents delivered
for filing conform with the provisions of the 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 commission [secretary of state];
and

         (3) return each duplicate copy to the person who delivered it to the
commission [secretary of state] or to that person's representative.

History: Laws 1993, ch. 280, § 9; 1999, ch. 132, § 3; 2003, ch. 318, § 52.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, substituted "statement" for "affidavit"
near the beginning of Paragraph A(2).

The 1999 amendment, effective July 1, 1999, inserted "organizer or" in Subsection A.

53-19-10. Effect of filing of articles of organization.

    A. A limited liability company is formed when the articles of organization are filed
with the commission [secretary of state] or at any later date or time specified in the
articles of organization if there has been substantial compliance with the requirements
of the Limited Liability Company Act. A limited liability company formed pursuant to the
Limited Liability Company Act is a separate legal entity.

    B. Each copy of the articles of organization stamped "filed" and marked with the
filing date is conclusive evidence that there has been substantial compliance with all
conditions required to be performed by the organizers and that the limited liability
company has been legally organized and formed pursuant to the Limited Liability
Company Act.

History: Laws 1993, ch. 280, § 10.

                                               ANNOTATIONS
Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-19-11. Amendment and restatement of articles of organization.

    A. The articles of organization of a limited liability company are amended when
articles of amendment are filed with the secretary of state or at any later date or time
specified in the articles of amendment if there has been substantial compliance with the
requirements of the Limited Liability Company Act. The articles of amendment shall set
forth:

         (1) the name of the limited liability company and, if different, include any
name under which it proposes to transact business in New Mexico;

         (2) the date that the articles of organization were filed; and

         (3) the amendments of the articles of organization.

    B. The articles of organization may be amended in any respect desired, so long as
the articles of organization, as amended, contain only provisions that may be lawfully
contained in articles of organization at the time of making the amendment.

    C. The articles of organization shall be amended to reflect any change in the name
of the limited liability company, the latest date on which the limited liability company is to
dissolve or whether the limited liability company is to be managed by members or
managers.

    D. Articles of organization may be restated at any time. Restated articles of
organization shall be filed with the secretary of state and shall be designated as such in
the heading and shall state either in the heading or in an introductory paragraph the
limited liability company's present name and, if it has been changed, all of its former
names and the date of the filing of its articles of organization. Restated articles of
organization shall supersede the original articles of organization and all prior
amendments and restatements.

History: Laws 1993, ch. 280, § 11; 2021, ch. 68, § 8.

                                               ANNOTATIONS
The 2021 amendment, effective July 1, 2021, required that a limited liability company
include, in its articles of amendment any name under which the limited liability company
proposes to transact business in New Mexico if different than the name of the limited
liability company; in Subsection A, after "filed with the", deleted "commission" and
added "secretary of state", and in Paragraph A(1), after "name of the limited liability
company", added "and, if different, include any name under which it proposes to
transact business in New Mexico"; and in Subsection D, after "filed with the", deleted
"commission" and added "secretary of state".

53-19-12. Execution of documents.

    A. Unless otherwise specified in the Limited Liability Company Act, any document
required to be filed with the commission [secretary of state] shall be executed:

         (1) by a manager, if management of the limited liability company is vested in
one or more managers, or by a member, if management of the limited liability company
is reserved to the members;

         (2) by a person forming the limited liability company if the limited liability
company has not been formed; or

         (3) by a receiver, trustee or court-appointed fiduciary if the limited liability
company is in the hands of a receiver, trustee or fiduciary.

    B. The person executing the document shall sign it and state, beneath or opposite
his signature, his name and the capacity in which he signs.

    C. The person executing the document may do so as an attorney-in-fact. Powers of
attorney relating to the execution of the document do not need to be shown to or filed
with the commission [secretary of state].

History: Laws 1993, ch. 280, § 12.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.
53-19-13. Liability of members and managers to third parties.

    Except as otherwise provided in the Limited Liability Company Act, the debts,
obligations and liabilities of a limited liability company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the limited liability
company. No member or manager of a limited liability company and no other person
with authority pursuant to the Limited Liability Company Act to wind up the business or
affairs of the limited liability company following its dissolution, shall be obligated
personally for any debt, obligation or liability of the limited liability company solely by
reason of being a member or manager of the limited liability company or having
authority pursuant to the Limited Liability Company Act to wind up the company's
business and affairs following its dissolution. A person may be liable for any act or
omission performed in his capacity as a manager of a limited liability company if there is
a basis for liability. Nothing in this section shall be construed to immunize any person
from liability for the consequences of his own acts or omissions for which he otherwise
may be liable.

History: Laws 1993, ch. 280, § 13.

53-19-14. Parties to actions.

    A member of a limited liability company is not a proper party to a proceeding by or
against the limited liability company solely by reason of being a member of the limited
liability company, except where the object of the proceeding is to enforce a member's
right against or liability to the limited liability company.

History: Laws 1993, ch. 280, § 14.

53-19-15. Management by members or managers.

    A. Except to the extent the articles of organization vest management of the limited
liability company in one or more managers, management of the business and affairs of
the limited liability company shall be vested in the members, subject to any provision in
the articles of organization, an operating agreement or the Limited Liability Company
Act, which vests particular management responsibilities in any member or group or
class of members.

    B. If the articles of organization vest management of the limited liability company in
one or more managers, the articles of organization or an operating agreement may
prescribe the qualifications and the number of managers, the method in accordance
with which managers shall be selected and duties and responsibilities of such
managers. Each manager shall have such power to manage the business or affairs of
the limited liability company as the articles of organization or an operating agreement
shall provide. Unless otherwise provided by the articles of organization or an operating
agreement:
         (1) a manager shall be appointed and may be removed by the affirmative
vote, approval or consent of the members having a majority share of the voting power of
all of the members;

         (2) a manager need not be a member of the limited liability company or a
natural person;

         (3) unless a manager is removed or resigns, he shall hold office until his
successor has been elected and qualified; and

         (4) the manager or managers designated by or in accordance with the articles
of organization and operating agreement shall have exclusive power to make all
decisions on behalf of the limited liability company that are not specifically reserved to
the members by the Limited Liability Company Act.

History: Laws 1993, ch. 280, § 15.

                                               ANNOTATIONS

Manager's use of company assets was authorized. -- Where plaintiff, who owned a
GM car dealership had "credentials" to purchase GM vehicles at closed GM auctions
and a GMAC credit line to finance vehicles; plaintiff selected one of its members as sole
manager of its dealership; plaintiff was aware that the manager was also a member and
manager of the defendant dealerships; the manager used the GM credentials and
GMAC credit line to purchase and sell vehicles for plaintiff, a dealership in which the
majority of plaintiff's members were also owners, and the defendant dealerships;
plaintiff's operating agreement provided that the "consent" of a majority of plaintiff's
members was required to use plaintiff's assets for other than a company purpose; the
manager never concealed the manager's intention to use the GM credentials and
GMAC credit line to purchase vehicles for the defendant dealerships; plaintiff's
members were aware of the manager's intention; plaintiff's staff were aware of and
assisted the manager's use of the GM credentials and GMAC credit line to benefit the
defendant dealerships; the manager's use of the GM credentials and GMAC credit line
to benefit the defendant dealerships was publicized in a local business magazine and
newspapers; plaintiff posted the magazine article on its website; and for three years,
none of plaintiff's members objected to the manager's use of the GM credentials or the
GMAC credit line, a majority of plaintiff's members consented to the manager's use of
the GM credentials and GMAC credit line to purchase vehicles for the defendant
dealerships. Buke, LLC v. Cross Country Auto Sales, LLC, 2014-NMCA-078, cert.
denied, 2014-NMCERT-007.

53-19-16. Liabilities and duties of managers and members.

    Unless otherwise provided by the articles of organization or an operating agreement:
    A. a member who is not a manager and is not vested with particular management
responsibilities by the articles of organization or an operating agreement shall not be
liable to the limited liability company or to the other members solely by reason of his act
or omission in his capacity as a member;

    B. a member who is vested with particular management responsibilities by the
articles of organization or an operating agreement or a manager shall not be liable,
responsible or accountable in damages or otherwise to the limited liability company or to
the other members solely by reason of his act or omission on behalf of the limited
liability company in his capacity as a member having particular management
responsibilities or as a manager, unless such act or omission constitutes gross
negligence or willful misconduct;

    C. a member or manager may lend money to and transact other business with the
limited liability company, and except as otherwise provided in Subsection D of this
section and subject to other applicable law, he shall have the same rights and
obligations with respect to such loan or transaction of business as he would have if he
were not a member or manager;

    D. every member who is vested with particular management responsibilities by the
articles of organization or an operating agreement and every manager shall account to
the limited liability company and hold as trustee for it any profit or benefit he derives
from:

         (1) any transaction connected with the conduct or winding up of the limited
liability company; or

         (2) any use by such member or manager of the company's property, including
confidential or proprietary information of the limited liability company or other matters
entrusted to him as a result of his status as a member or manager unless:

             (a) the material facts of the relationship of the interested manager or member
to the contract, transaction or use were disclosed or known to all of the other managers
or members who, in good faith, authorized or approved the contract, transaction or use
by: 1) the affirmative vote of a majority of all of the disinterested managers; or 2) the
affirmative vote of all of the disinterested members, even though all of the disinterested
managers were less than a majority of all of the managers or even though all of the
disinterested members did not have a majority share of the voting power of all of the
members; or

             (b) the contract, transaction or use was fair to the limited liability company
when it was authorized or approved.

History: Laws 1993, ch. 280, § 16; 1995, ch. 213, § 2.

                                               ANNOTATIONS
The 1995 amendment, effective June 16, 1995, substituted "Subsection D" for
"Subsections D and E" in Subsection C.

Breach of fiduciary duty. -- In a case where a plaintiff challenges expenditures that
do not themselves create a presumption of self-dealing and the plaintiff is involved in
the financial affairs of the partnership or LLC such that plaintiff has access to the entity's
records, the burden of proving a breach of fiduciary duty is on the plaintiff. Mayeux v.
Winder, 2006-NMCA-028, 139 N.M. 235, 131 P.3d 85.

53-19-17. Voting.

    A. Except as provided by the articles of organization, an operating agreement or the
Limited Liability Company Act, members who have contributed to the capital of the
limited liability company shall vote in proportion to the value of their contributions to the
capital of the limited liability company, determined in accordance with the Limited
Liability Company Act and adjusted to the time the vote is taken to reflect all
contributions made and all withdrawals of capital by the members prior to such time.

    B. Except as provided by the articles of organization, an operating agreement or the
Limited Liability Company Act and subject to the provisions of Subsection C of this
section:

         (1) the affirmative vote, approval or consent of the members having a majority
share of the voting power of all members shall be required to amend the articles of
organization or an operating agreement to approve the sale, mortgage, pledge or other
hypothecation or disposition of all or substantially all of the assets of the limited liability
company, to approve the merger or consolidation of the limited liability company or,
except as provided in Paragraph (3) of this subsection, to approve any other action
required or permitted to be approved by the members;

         (2) the affirmative vote, approval or consent of all of the other members shall
be required to remove a member from membership in the limited liability company;

         (3) if the articles of incorporation or operating agreement vest management
responsibility in one or more managers, the affirmative vote, approval or consent of a
majority of the managers is required to decide or resolve any difference on any matter
connected with carrying on the business and affairs of the limited liability company that
is within the scope of the managers' authority; and

         (4) any matter connected with the carrying on of the business and affairs of
the limited liability company that is not within the scope of the authority of one or more
managers, or of one or more members in whom the articles of organization and
operating agreement vest particular management responsibility, shall be decided or
resolved by the affirmative vote, approval or consent of members having a majority
share of the voting power of all members.
    C. Notwithstanding the provisions of Subsection B of this section, if a provision in
the articles of organization or operating agreement requires a greater than majority vote
to approve a matter, the same greater than majority vote shall be required to amend
that provision.

History: Laws 1993, ch. 280, § 17; 1995, ch. 213, § 3.

                                               ANNOTATIONS

The 1995 amendment, effective June 16, 1995, in Subsection B, inserted "other"
preceding "members" and deleted "expel or" preceding "remove" in Paragraph (2) and
made a minor stylistic change in Paragraph (3).

53-19-18. Indemnification of members and managers.

    The articles of organization or an operating agreement may provide for
indemnification of a member or manager for judgments, settlements, penalties, fines or
expenses incurred in a proceeding to which a person is a party because he is or was a
member or manager and for advancement of expenses, including costs of defense,
prior to final disposition of such proceeding.

History: Laws 1993, ch. 280, § 18.

53-19-19. Records and information.

    A. A limited liability company shall keep at its principal place of business, and notify
all of its members of the location of such place, the following:

         (1) a list containing the full name and last known mailing address of all current
and former members and managers;

         (2) a copy of the articles of organization and all amendments or restatements
of the articles, together with executed copies of any powers of attorney pursuant to
which any articles, amendments or restatements have been executed;

         (3) a copy of each of the limited liability company's federal, state and local
income tax returns and financial statements for the three most recent years or, if such
returns or statements were not prepared for any reason, copies of the information and
statements necessary to enable the members to prepare their own federal, state and
local tax returns for such periods;

         (4) a copy of every current and prior operating agreement, and every
amendment to each of those operating agreements;

         (5) unless the following statements are included in the articles of organization
or an operating agreement:
             (a) a current statement of the capital contributions made by each member
specifying the amount of cash and the agreed value of other property received by the
limited liability company and the agreed value of services as a capital contribution that
each member has rendered to the limited liability company;

             (b) a statement of the cash, property and services that each member has
agreed to contribute or render to the limited liability company in the future, and of the
principal balance outstanding under any promissory note payable in respect of a capital
contribution, and of the amount of the capital contribution with which each such member
shall be credited upon receipt of such cash, property or services, or any part thereof, by
the limited liability company; and

             (c) a statement of the times at which, or the events on the happening of
which, any additional contributions to or withdrawals from capital to which the members
have agreed are to occur; and

         (6) documents or any other writings required to be made available to
members by the articles of organization or operating agreement.

    B. A member or his representative may, at the member's expense, inspect and copy
any limited liability company record, wherever such record is located, upon reasonable
request during ordinary business hours.

    C. Managers or members in whom the articles of organization or an operating
agreement vest a particular management responsibility for one or more material matters
shall, if requested by a member, the personal representative of a deceased member or
the legal representative of a member under a legal disability, render to that member or
representative, to the extent the circumstances render it reasonable to do so, true and
full information on all such material matters affecting the requesting member in his
capacity as a member.

    D. Failure of the limited liability company to keep or maintain any of the records or
information required pursuant to this section shall not be grounds for imposing liability
on any person for the debts and obligations of the limited liability company.

History: Laws 1993, ch. 280, § 19.

53-19-20. Contributions to capital; certificates of membership
interest.

    A. A membership interest in a limited liability company may be issued in exchange
for a contribution of cash or property received by the limited liability company or
services rendered to the limited liability company, the value of which shall be
established and recorded as of the date the contribution was made by the persons in
whom management of the limited liability company is vested. If permitted by the articles
of organization or an operating agreement, a membership interest in a limited liability
company may be issued in exchange for such member's promissory note or other
written promise to contribute cash or property or perform services, the value of which
shall be determined by the persons in whom management of the limited liability
company is vested.

    B. The articles of organization or an operating agreement may:

         (1) provide that a membership interest in a limited liability company may be
evidenced by a certificate of membership interest issued by the limited liability company;

         (2) provide for the assignment or transfer of a membership interest
represented by such a certificate by transfer of the certificate; and

         (3) make other provisions for such certificates.

History: Laws 1993, ch. 280, § 20.

53-19-21. Liability for contribution.

    A. Except as provided in the articles of organization or an operating agreement, a
member's written promise to the limited liability company to contribute cash or property
or render services is not excused by reason of the member's death, disability or other
inability to perform.

    B. The articles of organization or an operating agreement may provide that the
interest of a member who fails to make a payment of cash or transfer of property to the
limited liability company or fails to render services required by a written promise is
subject to specified consequences. Such consequences may take the form of a
reduction of the defaulting member's interest in the limited liability company,
subordination of the member's interest to that of nondefaulting members, a forced sale
of the member's interest, forfeiture of the member's interest, the lending of money to the
defaulting member by other members of the amount necessary to meet the defaulting
member's commitment, a determination of the value of a defaulting member's interest
by appraisal or by formula and redemption or sale of the interest at that value, or any
other specified consequence. Unless otherwise provided by the articles of organization
or an operating agreement, a member who does not perform a written promise to
contribute cash or property or render service shall be obligated, at the option of the
limited company, to contribute cash equal to the fair market value of that portion of the
promised performance that has not been received by the limited liability company.

    C. Unless otherwise provided in the articles of organization or an operating
agreement, the obligation of a member to make a contribution may be compromised
only with the unanimous consent of the members.

History: Laws 1993, ch. 280, § 21.
53-19-22. Sharing of profits and losses.

    The profits and losses of a limited liability company shall be allocated among the
members in the manner provided in the articles of organization or an operating
agreement. If neither the articles of organization nor an operating agreement provide for
allocation, such profits and losses shall be allocated among the members in proportion
to the value of their respective contributions to capital, adjusted to reflect all withdrawals
from capital.

History: Laws 1993, ch. 280, § 22.

53-19-23. Sharing of interim distributions.

    Except as provided in Sections 24 and 44 [53-19-24, 53-19-44 NMSA 1978] of the
Limited Liability Company Act, distributions of cash or other assets of a limited liability
company shall be shared among the members and among classes of members in the
manner provided by the articles of organization or an operating agreement. If neither the
articles of organization nor an operating agreement provides otherwise, cash or other
assets shall be distributed on the basis of the value of contributions made by each
member, to the extent that such contributions have not been returned. A member is
entitled to receive distributions described in this section to the extent and at the times or
upon the happening of the events specified by the articles of organization or an
operating agreement or at the times determined by the persons in whom management
is vested.

History: Laws 1993, ch. 280, § 23.

53-19-24. Distribution on event of dissociation.

    Upon the happening of an event of dissociation that does not require the winding up
of the affairs of the limited liability company pursuant to Section 39 [53-19-39 NMSA
1978] of the Limited Liability Company Act, a dissociating member is entitled to receive
any distribution to which the member is entitled under the provisions of the articles of
organization or operating agreement and if such provisions do not specify the effect of
such dissociation, such dissociating member shall be entitled only to receive, within a
reasonable time after dissociation, the fair market value of his limited liability company
interest as of the date of dissociation.

History: Laws 1993, ch. 280, § 24.

53-19-25. Withdrawals of capital and distributions in kind.

    Except as provided in the articles of organization or an operating agreement:
    A. unless approved by all members, no member shall have the right to withdraw any
part of his contribution to capital;

    B. a member, regardless of the nature of the member's contribution, has no right to
demand and receive any distribution from a limited liability company in any form other
than cash; and

    C. no member may be compelled to accept from a limited liability company a
distribution of any asset in kind to the extent that the value of the percentage of the
asset distributed to the member exceeds a percentage of the value of that asset which
is equal to the percentage in which the member shares in distributions from the limited
liability company.

History: Laws 1993, ch. 280, § 25.

53-19-26. Wrongful distributions.

    A. No distribution may be made if, after giving effect to the distribution:

         (1) the limited liability company would not be able to pay its debts as they
become due in the usual course of business; or

         (2) the fair market value of the limited liability company's total assets would be
less than the sum of all of its liabilities other than liabilities to members with respect to
their membership interests and liabilities for which the recourse of the creditors is limited
to specific property of the limited liability company. For purposes of this provision, in the
case of specific property that is subject to a liability for which the recourse of the
creditors is limited to such property, only the fair market value of such property in
excess of such liability shall be included in the fair market value of the limited liability
company's assets.

    B. The limited liability company may base a determination that a distribution is not
prohibited under Subsection A of this section either on:

         (1) financial statements prepared on the basis of accounting practices and
principles that are reasonable under the circumstances; or

         (2) any other valuation method that is reasonable under the circumstances.

    C. Except as provided in Subsection E of this section, the effect of a distribution
under Subsection A of this section is measured as of:

         (1) the date the distribution is authorized if the distribution occurs within one
hundred twenty days after the date of authorization; or
         (2) the date distribution is made if it occurs more than one hundred twenty
days after the date of authorization.

    D. Indebtedness of the limited liability company that it issued as a distribution to its
members or the terms of which provide that payment of principal and interest is to be
made only if and to the extent that payment of a distribution to members would not be
wrongful under this section, is not a liability for purposes of determinations made
pursuant to Paragraph (2) of Subsection A of this section.

    E. Each payment of principal or interest on indebtedness of a limited liability
company that it issued as a distribution shall be treated as a distribution, the effect of
which is measured on the date such payment is actually made.

History: Laws 1993, ch. 280, § 26.

53-19-27. Liability upon wrongful distribution.

    A. In addition to any other liabilities, a member or manager who votes for, approves
or consents to any distribution that violates any provision of the articles of organization,
an operating agreement or Section 26 [53-19-26 NMSA 1978] of the Limited Liability
Company Act shall be liable to the limited liability company, jointly but not severally, with
all other members or managers so voting, approving or consenting for the amount of the
distribution that exceeds what could have been distributed without violating Section 26
of that act, the articles of organization or an operating agreement, unless the member or
manager based his determination that the distribution did not violate such provisions on
the statements or other valuation method authorized by Subsection B of Section 26 of
that act and had no actual knowledge that rendered his reliance on such statements,
valuation or method unwarranted.

    B. Each member or manager who is liable pursuant to Subsection A of this section
is entitled to contribution:

         (1) from each other member or manager who is liable under Subsection A of
this section; and

         (2) from each member for the amount the member received knowing that the
distribution was made in violation of a provision of the articles of organization, an
operating agreement or Section 26 of the Limited Liability Company Act.

History: Laws 1993, ch. 280, § 27.

53-19-28. Right to distribution.

    At the time a member becomes entitled to receive a distribution, the member has the
status of and is entitled, with respect to the distribution, to all remedies available to a
creditor of the limited liability company. A member to whom a limited liability company is
indebted as a consequence of a distribution to such member, which is not prohibited by
Section 26 [53-19-26 NMSA 1978] of the Limited Liability Company Act, shall be a
creditor at parity with the limited liability company's other general unsecured creditors,
except to the extent that the limited liability company's indebtedness to such member is
subordinated by agreement.

History: Laws 1993, ch. 280, § 28.

53-19-29. Ownership of property by the limited liability company.

    A. Property transferred to or otherwise acquired by a limited liability company is
property of the limited liability company and not of the members. A member has no
interest in an item of limited liability company property.

    B. Property acquired or owned by the limited liability company shall be acquired,
held and conveyed in the name of the limited liability company. A limited liability
company may acquire any estate in real or personal property in the name of the limited
liability company, and title to any estate so acquired shall vest in the limited liability
company rather than in the members.

    C. Property may be owned by a limited liability company, even though the property
is not acquired or held in its name.

    D. Subject to Subsection G of this section, property is presumed to be owned by the
limited liability company if it is acquired in the name of the limited liability company.

    E. Subject to Subsection G of this section, property is presumed to be owned by the
limited liability company if it is purchased with funds of the limited liability company,
even if it is acquired in the name of a member or other person.

    F. Subject to Subsection G of this section, property is presumed to be the property
of one or more members or other persons if it is acquired in the names of such persons
without use of funds of the limited liability company, even though the property is used
for purposes of the business of the limited liability company.

    G. Real property and other property held of public record otherwise than in the
name of the limited liability company, the ownership of which is customarily publicly
recorded, shall not be deemed to be owned by the limited liability company to the
prejudice of a person who did not have actual knowledge of the limited liability
company's ownership.

History: Laws 1993, ch. 280, § 29.

53-19-30. Transfer of property of limited liability company.
    A. Except as provided in Subsection E of this section, Section 42 or 43 [53-19-42,
53-19-43 NMSA 1978] of the Limited Liability Company Act or otherwise in the articles
of organization or an operating agreement, title to property of a limited liability company
that is held in the name of the limited liability company may be transferred by an
instrument of transfer executed by any member in the name of the limited liability
company.

    B. Title to property of a limited liability company that is held in the name of one or
more members or managers with an indication in the instrument transferring title to the
property to them of their capacity as members or managers of a limited liability
company, or of the existence of a limited liability company, even if the name of the
limited liability company is not indicated, may be transferred by an instrument of transfer
executed by the one or more members or managers in whose name title is held.

    C. Property transferred under Subsection A or B of this section, or the proceeds of
that property, may be recovered by the limited liability company if it proves that the act
of the person executing the instrument of transfer did not bind the limited liability
company, unless the initial transferee, or a person claiming through the initial
transferee, gave value without having notice that the person who executed the
instrument on behalf of the limited liability company lacked authority to bind the limited
liability company.

    D. Title to property of a limited liability company that is held in the name of one or
more persons other than the limited liability company without an indication in the
instrument transferring title to the property to them of their capacity as members or
managers of a limited liability company, or of the existence of a limited liability company,
may be transferred free of any claims of the limited liability company or of the members,
by the persons in whose name title is held, to a transferee who gives value without
having notice that the property transferred is the property of a limited liability company.

    E. Unless otherwise provided in the articles of organization or an operating
agreement, if the articles of organization provide that management of the limited liability
company is vested in a manager:

         (1) title to property of the limited liability company that is held in the name of
the limited liability company may be transferred by an instrument of transfer executed by
any manager in the name of the limited liability company; and

         (2) a member, acting solely in his capacity as a member, shall not have such
authority.

History: Laws 1993, ch. 280, § 30.

53-19-31. Nature of membership interest.

    A membership interest is personal property.
History: Laws 1993, ch. 280, § 31.

53-19-32. Assignment of interests.

    A. Except as provided in the articles of organization or an operating agreement:

         (1) a membership interest or a limited liability company interest is assignable
in whole or in part;

         (2) until the assignee becomes a member in accordance with the provisions
of Subsection A of Section 33 [53-19-33 NMSA 1978] of the Limited Liability Company
Act, an assignment entitles the assignee to receive only the distributions and return of
capital to which the assignor would be entitled with respect to the interest he assigned if
he had not assigned such interest;

         (3) an assignment does not of itself dissolve the limited liability company;

         (4) until the assignee of a membership interest becomes a member, the
assignor continues to be a member and to have the power to exercise all rights of a
member, subject to the provisions of Paragraph (2) of this subsection and the members'
right to remove the assignor pursuant to Subparagraph (b) of Paragraph (3) of
Subsection A of Section 38 [53-19-38 NMSA 1978] of the Limited Liability Company Act;

         (5) until the assignee of a membership interest becomes a member, the
assignee has no liability of a member solely as a result of the assignment; and

         (6) the assignor is not released from any liability that he may have as a
member solely as a result of his assignment.

    B. Unless otherwise provided by the articles of organization or an operating
agreement, the pledge or granting of a security interest, lien or other encumbrance in or
against all or any portion of the interest of a member is not an assignment and shall not
cause the member to cease to be a member or to cease to have the power to exercise
any rights or powers of a member.

History: Laws 1993, ch. 280, § 32.

53-19-33. Right of assignee to become a member.

    A. Except as otherwise provided in the articles of organization or an operating
agreement, an assignee may become a member only if the other members unanimously
consent. Such consent shall be evidenced in the manner specified in the articles of
organization or an operating agreement; however, in the absence of such specification,
such consent shall be evidenced by an instrument, dated and signed by the other
members.
    B. An assignee who becomes a member has the rights and powers, and is subject
to the restrictions and liabilities of a member under the articles of organization, any
operating agreement and the Limited Liability Company Act. An assignee who becomes
a member shall not be liable for the obligations of his assignor under that act to make
contributions and to return distributions, except to the extent that the assignor and
assignee agree that the assignee is so liable. The assignee shall not, however, be
obligated as a result of his agreement with his assignor for liabilities of which the
assignee had no knowledge at the time the assignee became a member and which
could not be ascertained from the articles of organization or an operating agreement.

    C. Whether or not an assignee becomes a member, the assignor is not released
from his liability pursuant to Section 21 [53-19-21 NMSA 1978] of the Limited Liability
Company Act to make contributions to the limited liability company unless all members
consent in writing to such a release.

    D. A member who assigns his entire interest in the limited liability company ceases
to be a member or to have the power to exercise any rights of a member when any
assignee of his interest becomes a member as provided in Subsection A of this section.

History: Laws 1993, ch. 280, § 33.

53-19-34. Interest of a deceased, incompetent or terminated
member.

    If a member who is an individual dies or a court adjudges him to be incompetent to
manage his person or property, or if a member that is not an individual is dissolved,
liquidated or otherwise completely terminated, the member's executor, administrator,
guardian, conservator, liquidating trustee or other legal representative has all of the
rights of an assignee of the member's limited liability company interest.

History: Laws 1993, ch. 280, § 34.

53-19-35. Rights of judgment creditor of member.

    On application to a court by any judgment creditor of a member, the court may
charge the interest of the member with payment of the unsatisfied amount of the
judgment, with interest. To the extent so charged, the judgment creditor has no more
rights than those to which an assignee of the member's limited liability company interest
would be entitled under the provisions of Section 32 [53-19-32 NMSA 1978] of the
Limited Liability Company Act. That act does not deprive any member of the benefit of
any exemption laws applicable to his membership interest.

History: Laws 1993, ch. 280, § 35.

53-19-36. Admission of members.
    A. Subject to the provisions of Subsection B of this section, a person may become a
member of a limited liability company:

         (1) in the case of a person acquiring a membership interest directly from the
limited liability company, upon compliance with the articles of organization or an
operating agreement or, if neither the articles nor an operating agreement so provides,
upon the written consent of all members; and

         (2) in the case of an assignee of a member's interest, as provided in
Subsection A of Section 33 [53-19-33 NMSA 1978] of the Limited Liability Company Act.

    B. The effective time of admission of a member is the later of:

         (1) the date the limited liability company is formed; or

         (2) the time provided in the articles of organization or an operating agreement
or, if no such time is provided in the articles of organization or an operating agreement,
then when the person's admission is reflected in the records of the limited liability
company.

History: Laws 1993, ch. 280, § 36.

53-19-37. Voluntary withdrawal of members.

    A. Unless the articles of organization or an operating agreement provide otherwise,
a member of a limited liability company with perpetual existence has the right to
voluntarily withdraw from such limited liability company at any time by giving thirty days
prior written notice to the other members, or such other notice as a provision in the
articles of organization or an operating agreement requires.

    B. Unless the articles of organization or an operating agreement provide otherwise,
a member of a limited liability company for a definite term or particular undertaking has
no right to withdraw voluntarily before the expiration of that term or the achievement of
that undertaking. If a member of a limited liability company for a definite term or
particular undertaking attempts to withdraw voluntarily without a right to do so, such
attempt shall be ineffective except that such member shall be deemed to have
relinquished by such attempt all of his right and power to vote or to otherwise participate
thereafter, in any way, in management or control of the limited liability company.

    C. Unless the articles of organization or an operating agreement provide otherwise,
a member who elects voluntarily to withdraw pursuant to a right to do so shall be
entitled to receive, within a reasonable time following the effective date of such
withdrawal, the fair market value of his limited liability company interest. From and after
the effective date of such withdrawal he shall cease to be a member and shall be
deemed to have relinquished all right and power to vote or to otherwise participate in
any way in the management or control of the limited liability company or to participate in
distributions or otherwise to receive a return of capital from the limited liability company.

History: Laws 1993, ch. 280, § 37.

53-19-38. Events of dissociation.

    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.

53-19-39. Dissolution.
    A. A limited liability company is dissolved upon the happening of any of the following
events:

         (1) an event specified in the articles of organization or an operating
agreement;

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

         (3) entry of a decree of judicial dissolution pursuant to Section 53-19-40
NMSA 1978.

    B. On the dissolution of the limited liability company, the limited liability company
shall cease to carry on its business and affairs, except insofar as necessary for winding
up the company's business and affairs, but its legal existence shall continue until all its
business and affairs are wound up.

History: Laws 1993, ch. 280, § 39; 1995, ch. 213, § 4; 2003, ch. 318, § 53.

                                               ANNOTATIONS

The 2003 amendment, effective July 1, 2003, deleted former Paragraph A(3) which
read: "except as otherwise provided in the articles of organization or an operating
agreement, a majority in interest of the remaining members do not give their written
consent to continue the business of the limited liability company within ninety days after
the occurrence of an event of dissociation" and redesignated former Paragraph A(4) as
present Paragraph A(3); and deleted Subsection C relating to for the consent to be
satisfied must be given by a remaining member.

The 1995 amendment, effective June 16, 1995, in Subsection A, rewrote Paragraph (3)
and substituted "Section 53-19-40 NMSA 1978" for "Section 40 of the Limited Liability
Company Act" in Paragraph (4); and added Subsection C.

53-19-40. Judicial dissolution.

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

History: Laws 1993, ch. 280, § 40.

53-19-41. Articles of dissolution.

    A. On the dissolution of a limited liability company, persons with authority pursuant
to the provisions of Subsection A of Section 53-19-42 NMSA 1978 to wind up its
business and affairs shall sign and deliver, to the office of the secretary of state for
filing, articles of dissolution.

    B. The articles of dissolution shall state:

         (1) the name of the limited liability company;

         (2) the dates of filing the articles of organization and all amendments and
restatements to the articles of organization;

         (3) the event causing the dissolution;

         (4) the effective date, which shall be a date certain, of the articles of
dissolution if the articles of dissolution are not to be effective on filing;

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

         (6) confirmation that the limited liability company has resigned as a registered
agent or is not currently a registered agent for any entity registered in New Mexico;

         (7) whether the winding up of the business and affairs of the limited liability
company is being supervised by a court pursuant to the provisions of Paragraph (2) of
Subsection A of Section 53-19-42 NMSA 1978; and

         (8) any other information persons signing the articles of dissolution choose to
include.

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

    D. Articles of dissolution that have been filed may be amended at any time and from
time to time or revoked at any time and, unless an amendment or revocation states
otherwise, it shall be effective upon delivery to the office of the secretary of state for
filing.

History: Laws 1993, ch. 280, § 41; 2019, ch. 159, § 5.

                                               ANNOTATIONS

The 2019 amendment, effective July 1, 2019, required articles of dissolution to include
confirmation that the limited liability company has resigned as a registered agent or is
not currently a registered agent for any entity registered in New Mexico; in Subsection
A, after "Section", deleted "42 of the Limited Liability Company Act" and added "53-19-
42 NMSA 1978", and after "to the office of", deleted "commission" and added "secretary
of state"; in Subsection B, added a new Paragraph B(6) and redesignated former
Paragraphs B(6) and B(7) as Paragraphs B(7) and B(8), respectively, and in Paragraph
B(7), after "Section", deleted "42 of the Limited Liability Company Act" and added "53-
19-42 NMSA 1978"; and in Subsection D, after "delivery to the office of the", deleted
"commission" and added "secretary of state".

53-19-42. Winding up.

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

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

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

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

         (1) prosecute and defend suits;

         (2) complete the performance of obligations undertaken prior to dissolution
and settle and close the business of the limited liability company;

         (3) dispose of and transfer the property of the limited liability company;

         (4) discharge the liabilities of the limited liability company; and

         (5) distribute to the members any remaining assets of the limited liability
company.

History: Laws 1993, ch. 280, § 42.

53-19-43. Power of managers or members after dissolution.

    A. Subject to Subsections C and D of this section, on and after dissolution of the
limited liability company and until articles of dissolution shall have been filed with the
commission [secretary of state], any manager of a limited liability company whose
articles of organization vest management in managers and any member of a limited
liability company whose articles of organization do not vest management in managers
can bind the limited liability company:

         (1) by any act authorized by Section 42 [53-19-42 NMSA 1978] of the Limited
Liability Company Act for winding up the limited liability company's business and affairs;
and

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

    B. The filing of the articles of dissolution required by Section 41 [53-19-41 NMSA
1978] of the Limited Liability Company Act shall be notice of dissolution for purposes of
Paragraph (2) of Subsection A of this section.

    C. An act of a member, manager or other person that is not otherwise binding on
the limited liability company pursuant to Subsection A of this section is binding if it is
otherwise authorized or ratified by the limited liability company.

    D. An act of any person that is in contravention of a restriction on authority, shall not
bind the limited liability company to persons having knowledge of the restriction.

History: Laws 1993, ch. 280, § 43.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-19-44. Distribution of assets.

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

    A. first, to payment or adequate provision for payment to creditors, excluding
members who by reason of the provisions of Section 28 [53-19-28 NMSA 1978] of the
Limited Liability Company Act are creditors with respect to distributions by the limited
liability company, but including to the extent permitted by law members who are
creditors without application of the provisions of that section;

    B. second, except as otherwise provided in the articles of organization or an
operating agreement, in satisfaction of liabilities:

         (1) under Section 28 of the Limited Liability Company Act to members or
former members for distributions; and

         (2) to former members as a result of a dissociation requiring a payment under
Section 24 [53-19-24 NMSA 1978] of the Limited Liability Company Act or as a result of
a voluntary withdrawal requiring payment under Subsection C of Section 37 [53-19-37
NMSA 1978] of the Limited Liability Company Act; and

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

History: Laws 1993, ch. 280, § 44.

53-19-45. Known claims against dissolved limited liability company.

    A. A dissolved limited liability company may dispose of the known claims against it
by filing articles of dissolution pursuant to Section 53-19-41 NMSA 1978 and following
the procedure described in this section.

    B. The dissolved limited liability company shall notify its known claimants in writing
of the dissolution at any time after the effective date of dissolution. The written notice
shall:

         (1) describe information that must be included in a claim;

         (2) provide a mailing address where a claim may be sent;

         (3) state the deadline by which claims must be received by the limited liability
company, which may not be earlier than the later of one hundred twenty days after the
date on which the articles of dissolution were filed pursuant to Section 53-19-41 NMSA
1978 or, if the dissolution was not effective on such filing date, one hundred twenty days
after the effective date of dissolution stated in the articles of dissolution;

         (4) state that the claim shall be barred if not received by the deadline; and

         (5) state the effective date that will apply to any rejection notice that the
limited liability company may give upon receipt of any claim.
    C. A claim against the dissolved limited liability company is barred:

         (1) if a claimant who was given written notice pursuant to Subsection B of this
section does not deliver the claim to the dissolved limited liability company by the
deadline; or

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

    D. For purposes of this section, "claim" does not include a contingent liability or a
claim based on an event occurring after the effective date of dissolution.

History: Laws 1993, ch. 280, § 45; 1995, ch. 213, § 5.

                                               ANNOTATIONS

The 1995 amendment, effective June 16, 1995, substituted "Section 53-19-41 NMSA
1978" for "Section 41 of the Limited Liability Company Act" in Subsection A; and, in
Subsection B, rewrote Paragraph (3), added Paragraph (5), and made minor stylistic
changes.

53-19-46. Unknown claims against dissolved limited liability
company.

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

    B. The notice shall:

         (1) be published one time in a newspaper of general circulation in the county
where the dissolved limited liability company's principal office or registered office is or
was located;

         (2) describe the information that must be included in a claim and provide a
mailing address where the claim may be sent; and

         (3) state that a claim against the limited liability company shall be barred
unless a proceeding to enforce the claim is commenced within three years after the
publication of the notice.

    C. If the dissolved limited liability company publishes a newspaper notice in
accordance with Paragraph (1) of Subsection B of this section and files articles of
dissolution pursuant to Section 53-19-41 NMSA 1978, the claim of each of the following
claimants is barred unless the claimant commences a proceeding to enforce the claim
against the dissolved limited liability company within three years after the publication
date of the newspaper notice:

         (1) a claimant who did not receive written notice pursuant to provisions of
Section 53-19-45 NMSA 1978;

         (2) a claimant whose claim was timely delivered to the dissolved limited
liability company but neither accepted nor rejected; and

         (3) a claimant whose claim is contingent or based on an event occurring after
the effective date of dissolution.

    D. A claim may be enforced under this section:

         (1) against the dissolved limited liability company, to the extent of its
undistributed assets; or

         (2) if the assets have been distributed in winding up, against a member of the
dissolved limited liability company to the extent of the lesser of his pro rata share of the
claim and the fair market value of the assets of the limited liability company distributed
to him in winding up, determined as of the times of such distributions; but a member's
total liability for all claims pursuant to the provisions of this section shall not exceed the
total fair market value of the assets distributed to him determined as of the date of
distribution.

History: Laws 1993, ch. 280, § 46; 1995, ch. 213, § 6.

                                               ANNOTATIONS

The 1995 amendment, effective June 16, 1995, in Subsection C, substituted "Section
53-19-41 NMSA 1978" for "Section 41 of the Limited Liability Company Act" and "the
publication date of the newspaper notice" for "the later of the publication date of the
newspaper notice and the date on which the articles of dissolution were filed" in the
introductory paragraph, and substituted "pursuant to provisions of Section 53-19-45
NMSA 1978" for "under Section 45 of the Limited Liability Company Act" in Paragraph
(1); and made a minor stylistic change in Subsection D.

53-19-47. Laws governing foreign limited liability company.

    A. Subject to the constitution of New Mexico, the laws of the state or other
jurisdiction under which a foreign limited liability company is organized shall govern its
organization and internal affairs and the liability of its managers and members.

    B. A foreign limited liability company may not be denied registration by reason of
any difference between the laws of the state and other jurisdictions under which it was
organized and the laws of New Mexico.
History: Laws 1993, ch. 280, § 47.

53-19-48. Registration.

    Before transacting business in New Mexico, a foreign limited liability company shall
register with the commission [secretary of state] by submitting an original signed
application for registration as a foreign limited liability company, 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, executed by a person with authority to do so under the laws
of the state or other jurisdiction of its organization and a certificate of good standing and
compliance issued by the appropriate official of the state or jurisdiction under the laws of
which the organization is organized, current within thirty days and that has not expired
at time of receipt by the commission [secretary of state]. The application shall set forth:

    A. the name of the foreign limited liability company and, if different, the name under
which it proposes to transact business in New Mexico;

    B. the state or other jurisdiction where the foreign limited liability company was
organized and the date of its organization;

    C. 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;

    D. a statement 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;

    E. the address of the office required to be maintained in the state or other
jurisdiction of its organization by the laws of that state or jurisdiction or, if not so
required, of the principal office of the foreign limited liability company;

    F. a statement that the foreign limited liability company is a foreign limited liability
company as defined in Section 53-19-2 NMSA 1978; and

    G. the identity of persons in whom management of the foreign limited liability
company is vested.

History: Laws 1993, ch. 280, § 48; 2001, ch. 200, § 76; 2003, ch. 318, § 54.

                                               ANNOTATIONS
Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, in the introductory paragraph, substituted
"copy, which may be a photocopy of the original after it was signed or a photocopy that
is conformed to the original" for "duplicate copy that may be a signed, photocopied or
conformed copy" following "together with a", substituted "a" for "an original" following "its
organization and"; substituted "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" for "affidavit, together with a duplicate copy" following "whose original, signed";
inserted "upon resignation of an already appointed registered agent" following "has
been appointed" in Subsection D.

The 2001 amendment, effective July 1, 2001, inserted the language beginning "and an
original certificate of good standing" and ending "at time of receipt by the commission"
in the introductory language; and updated the internal references in Subsections C and
F.

53-19-49. Issuance of registration.

    If the commission [secretary of state] determines that the application for registration
from a foreign limited liability company conforms to the provisions of the Limited Liability
Company Act and all requisite fees have been paid, the commission [secretary of state]
shall:

    A. endorse on the signed original and each copy the word "filed" and the date of its
acceptance for filing;

    B. retain a signed original in the files of the commission [secretary of state]; and

    C. return each copy to the person who delivered it to the commission [secretary of
state] or to that person's representative.

History: Laws 1993, ch. 280, § 49; 2003, ch. 318, § 55.

                                               ANNOTATIONS
Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, inserted "from a foreign limited liability
company" following "application for registration" in the introductory paragraph and
deleted "duplicate" preceding "copy" in Subsections A and C.

53-19-50. Name.

    A foreign limited liability company may register with the commission [secretary of
state] under any name, whether or not it is the name under which it is registered in the
state or other jurisdiction of organization, as long as the name could be registered by a
domestic limited liability company pursuant to Section 3 [53-19-3 NMSA 1978] of the
Limited Liability Company Act.

History: Laws 1993, ch. 280, § 50.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-19-51. Amended certificate of registration.

    A. The application for registration of a foreign limited liability company may be
amended by filing an amended certificate of registration with the commission [secretary
of state] signed by a person with authority to do so under the laws of the state or other
jurisdiction of its organization. The application for an amended certificate of registration
shall set forth:
         (1) the name of the foreign limited liability company;

         (2) the date the original application for registration was filed; and

         (3) the amendment to the application for registration.

    B. The application for registration may be amended in any way, so long as the
application for registration as amended contains only provisions that, at the time of the
amendment, may be lawfully contained in an application for registration.

    C. An application for registration shall be amended to reflect any change in the
identity of the persons in whom management of the foreign limited liability company is
vested.

    D. The requirements in respect to the form and contents of the application for
amended certificate of registration, the manner of its execution, the filing of an original
and copy with the commission [secretary of state], the issuance of an amended
certificate of registration and the effect thereof, shall be the same as in the case of an
original application for a certificate of registration. In addition to these requirements, the
application shall be accompanied by an authenticated copy of the amended articles of
organization.

History: Laws 1993, ch. 280, § 51; 2001, ch. 200, § 77.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2001 amendment, effective July 1, 2001, rewrote the section heading, which
formerly read "Amendments"; substituted "an amended certificate of registration" and
"application for an amended certificate of registration" for "articles of amendment" in
Subsection A; and added Subsection D.

53-19-52. Cancellation of registration.
    A. A foreign limited liability company authorized to transact business in New Mexico
may cancel its registration by application to the secretary of state for a certificate of
cancellation. The application for cancellation shall set forth:

         (1) the name of the foreign limited liability company and the state or other
jurisdiction under the laws of which it is organized;

         (2) that the foreign limited liability company is not transacting business in New
Mexico;

         (3) that the foreign limited liability company surrenders its registration to
transact business in New Mexico;

         (4) that the foreign limited liability company confirms the authority of its
registered agent for service of process in New Mexico and consents that service of
process in any action, suit or proceeding based upon any cause of action arising in New
Mexico during the time that the foreign limited liability company was authorized to
transact business in New Mexico also may be made on the foreign limited liability
company by service upon the secretary of state;

         (5) an address to which a person may mail a copy of any process against the
foreign limited liability company; and

         (6) confirmation that the foreign limited liability company has resigned as a
registered agent or is not currently a registered agent for any entity registered in New
Mexico.

    B. The application for cancellation shall be in the form specified by the secretary of
state and shall be executed for the foreign limited liability company by a person with
authority to do so under the laws of the state or other jurisdiction of its organization or, if
the foreign limited liability company is in the hands of a receiver or trustee, by the
receiver or trustee on behalf of the foreign limited liability company.

    C. A cancellation does not terminate the authority of the secretary of state to accept
service of process on the foreign limited liability company with respect to causes of
action arising out of its having done business in New Mexico.

History: Laws 1993, ch. 280, § 52; 2019, ch. 159, § 6.

                                               ANNOTATIONS

The 2019 amendment, effective July 1, 2019, provided that a foreign limited liability
company may cancel its registration by application to the secretary of state for a
certificate of cancellation, and that the application shall include confirmation that the
foreign limited liability company has resigned as a registered agent or is not currently a
registered agent for any entity registered in New Mexico; in Subsections A and B,
changed "commission" to "secretary of state"; and added Paragraph A(6).

53-19-53. Transaction of business without registration.

    A. A foreign limited liability company transacting business in New Mexico may not
maintain an action, suit or proceeding in a court of New Mexico until it has registered in
New Mexico.

    B. The failure of a foreign limited liability company to register in New Mexico does
not:

         (1) impair the validity of any contract or act of the foreign limited liability
company;

         (2) affect the right of any other party to a contract to maintain any action, suit
or proceeding on the contract; or

         (3) prevent the foreign limited liability company from defending any action,
suit or proceeding in any court of New Mexico.

    C. A foreign limited liability company, by transacting business in New Mexico
without registration, appoints the secretary of state as its agent for service of process
with respect to causes of action arising out of the transaction of business in New
Mexico.

    D. A foreign limited liability company that transacts business in New Mexico without
a valid registration shall be liable to New Mexico in an amount equal to all fees that
would have been imposed by the Limited Liability Company Act on that foreign limited
liability company for the years or parts of years during which it transacted business in
New Mexico without registration, had it obtained such registration, filed all reports
required by that act and paid all penalties imposed by that act. The attorney general
may bring proceedings to recover all amounts due New Mexico under the provisions of
this section.

    E. A foreign limited liability company that transacts business in New Mexico without
a valid registration shall be subject to a civil penalty not to exceed two hundred dollars
($200) per year or any part thereof during which business was transacted.

    F. The civil penalty provided for in Subsection E of this section may be recovered in
an action brought by the attorney general. Upon a finding by the court that a foreign
limited liability company or any of its members or managers have transacted business in
New Mexico in violation of the Limited Liability Company Act, the court shall issue, in
addition to the imposition of a civil penalty, an injunction restraining further transaction
of business by the foreign limited liability company and the further exercise of any
limited liability company's rights and privileges in New Mexico. The foreign limited
liability company shall be enjoined from transacting business in New Mexico until all civil
penalties, plus any interest and court costs that the court may assess, have been paid
and until the foreign limited liability company has otherwise complied with the provisions
of the Limited Liability Company Act.

    G. A member or manager of a foreign limited liability company is not liable for the
debts and obligations of the limited liability company solely because such company
transacted business in New Mexico without registration.

History: Laws 1993, ch. 280, § 53.

53-19-54. Transactions not constituting transacting business.

    A. The following activities of a foreign limited liability company, among others, do
not constitute transacting business within the meaning of the Limited Liability Company
Act:

         (1) maintaining, defending or settling any proceeding;

         (2) holding meetings of its members or carrying on any other activities
concerning its internal affairs;

         (3) maintaining bank accounts;

         (4) maintaining offices or agencies for the transfer, exchange and registration
of the foreign limited liability company's own securities or interests or appointing and
maintaining trustees or depositories with respect to those securities or interests;

         (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 rights in property securing debts;

         (9) 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;

         (10) 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; or
         (11) transacting business in interstate commerce.

    B. A foreign limited liability company shall not be considered to be transacting
business in New Mexico solely because it:

         (1) owns a controlling interest in a corporation or a foreign corporation that
transacts business in New Mexico;

         (2) is a limited partner of a limited partnership or foreign limited partnership
that is transacting business in New Mexico; or

         (3) is a member or manager of a limited liability company or foreign limited
liability company that is transacting business in New Mexico.

    C. This section does not apply in determining the contracts or activities that may
subject a foreign limited liability company to service of process or taxation in New
Mexico or to regulation under any other law of New Mexico.

History: Laws 1993, ch. 280, § 54.

53-19-55. Service of process.

    Service of process in any action against a foreign limited liability company, whether
or not registered in accordance with the provisions of the Limited Liability Company Act,
shall be made in the manner prescribed by law and the New Mexico Rules of Civil
Procedure.

History: Laws 1993, ch. 280, § 55.

53-19-56. Action by attorney general.

    The attorney general may maintain an action to recover civil penalties and restrain a
foreign limited liability company from transacting business in New Mexico in violation of
the Limited Liability Company Act.

History: Laws 1993, ch. 280, § 56.

53-19-57. Suits by and against the limited liability company.

    Suits may be brought by or against a limited liability company in its own name.

History: Laws 1993, ch. 280, § 57.

53-19-58. Authority to sue on behalf of limited liability company.
    Except as otherwise provided in the articles of organization or an operating
agreement, a suit on behalf of the limited liability company may be brought in the name
of the limited liability company by:

    A. any member of the limited liability company who is authorized to sue by the
affirmative vote of members having a majority of the voting power of all members whose
interests are not adverse to the interests of the limited liability company, whether or not
the articles of organization or an operating agreement vests management of the limited
liability company in one or more managers; or

    B. in the case of a limited liability company whose articles of organization or an
operating agreement vest management in one or more managers, any manager who is
authorized to do so by the affirmative vote, approval or consent required by the
provisions of Section 17 [53-19-17 NMSA 1978] of the Limited Liability Company Act;
provided that in determining the required vote, approval or consent, the vote of any
manager who has an interest in the outcome of the suit that is adverse to the interest of
the limited liability company shall be excluded.

History: Laws 1993, ch. 280, § 58.

                                               ANNOTATIONS

Company may not bring suit pro se. -- An authorized member of a limited liability
company can bring suit in the company's name; however, a member who is not a
licensed attorney cannot provide legal representation for the company. Martinez v.
Roscoe, 2001-NMCA-083, 131 N.M. 137, 33 P.3d 887, cert. denied, 130 N.M. 558, 28
P.3d 1099 (2002).

53-19-59. Conversions and mergers; definitions.

    As used in Sections 53-19-59 through 53-19-62.3 NMSA 1978:

    A. "corporation" means an organization incorporated under the laws of New Mexico
or a foreign corporation;

    B. "general partner" means a partner in a partnership and a general partner in a
limited partnership;

    C. "limited partner" means a limited partner in a limited partnership;

    D. "limited partnership" means a limited partnership created under the Uniform
Limited Partnership Act [repealed], a predecessor law or comparable law of another
jurisdiction;

    E. "partner" includes a general partner and a limited partner;
    F. "partnership" means a general partnership under the Uniform Partnership Act
[54-1A-1202 NMSA 1978], a predecessor law or comparable law of another jurisdiction;

    G. "partnership agreement" means an agreement among the partners concerning
the partnership or limited partnership; and

    H. "shareholder" means a shareholder in a corporation.

History: 1978 Comp., § 53-19-59, enacted by Laws 1995, ch. 213, § 7.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2007, ch. 129, § 1206 repealed the Uniform Limited Partnership Act, 54-2-1 to 54-
2-63 NMSA 1978, effective January 1, 2009.

Laws 1996, ch. 53, § 1004 repealed 54-1-1 to 54-1-43 NMSA 1978 of the Uniform
Partnership Act, effective July 1, 1997, and Laws 1997, ch. 76, § 23 repealed 54-1-44 to
54-1-46 and 54-1-48 NMSA 1978 of the Uniform Partnership Act, effective July 1, 1997.

Repeals and reenactments. -- Laws 1995, ch. 213, § 7 repealed 53-19-59 NMSA
1978, as enacted by Laws 1993, ch. 280, § 59, relating to merger or consolidation, and
enacted a new section, effective June 16, 1995.

53-19-60. Conversions and mergers; conversion of corporation,
partnership or limited partnership to limited liability company.

    A. A corporation, partnership or limited partnership may be converted to a limited
liability company pursuant to this section.

    B. The terms and conditions of a conversion of a corporation, partnership or limited
partnership to a limited liability company shall be approved in the manner specifically
provided for by the document, instrument, agreement or other writing governing the
internal affairs of the corporation, partnership or limited partnership concerning
conversions or, in the absence of such a provision, by all of the shareholders or
partners, as the case may be.

    C. An agreement of conversion shall set forth the terms and conditions of the
conversion of the owners' interests in the converting entity into interests in the converted
entity or the cash or other consideration to be paid or delivered as a result of the
conversion of the owners' interests or a combination of these.

    D. After a conversion is approved pursuant to Subsection B of this section, the
corporation, partnership or limited partnership being converted shall file articles of
organization with the commission [secretary of state] that satisfy the requirements of
Section 53-19-8 NMSA 1978 and a statement containing the items set forth below:

         (1) a statement that the corporation or partnership was converted to a limited
liability company from a corporation, partnership or limited partnership;

         (2) its former name;

         (3) a statement of the number of votes cast by the shareholders or partners
entitled to vote for and against the conversion and, if the vote is less than unanimous,
the number or percentage required to approve the conversion pursuant to Subsection B
of this section; and

         (4) in the case of a corporation or a limited partnership, a statement that the
certificate of incorporation or certificate of limited partnership is to be canceled as of the
date the conversion takes effect.

    E. In the case of a corporation or a limited partnership, the filing of articles of
organization pursuant to Subsection D of this section cancels its certificate of
incorporation or certificate of limited partnership as of the date the conversion took
effect.

    F. A conversion takes effect when articles of organization are filed with the
commission [secretary of state] or at any later date specified in the articles of
organization.

    G. A general partner who becomes a member of a limited liability company as a
result of a conversion remains liable as a partner for an obligation incurred by the
partnership or limited partnership before the conversion takes effect.

    H. A general partner's liability for all obligations of the limited liability company
incurred after the conversion takes effect is that of a member of the company. A limited
partner who becomes a member as a result of a conversion remains liable only to the
extent the limited partner was liable for an obligation incurred by the limited partnership
before the conversion took effect.

History: 1978 Comp., § 53-19-60, enacted by Laws 1995, ch. 213, § 8; 2001, ch. 200, §
78; 2003, ch. 318, § 56.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Repeals and reenactments. -- Laws 1995, ch. 213, § 8 repealed 53-19-60 NMSA
1978, as enacted by Laws 1993, ch. 280, § 60, relating to approval of merger or
consolidation, and enacted a new section, effective June 16, 1995.

The 2003 amendment, effective July 1, 2003, in Subsection B, inserted "specifically"
following "in the manner", inserted "concerning conversions" following "or limited
partnership"; substituted "a statement containing the items set forth below" for "that also
contain" at the end of Subsection D.

The 2001 amendment, effective July 1, 2001, substituted "conversion of corporation,
partnership or limited" for "conversion of partnership of limited" in the section heading;
amended the section to include corporations in its provisions; in Subsection B,
substituted the language following "be approved" for "by all of the partners or by a
number or percentage of the partners required for conversion in the partnership
agreement"; in Subsection C, substituted "owners' interests in the converting entity" for
"partners' interests", "entity" for "limited liability company" and "owners' interests" for
"partners' interests"; and in Subsection D, inserted "shareholders or" preceding
"partners" in Paragraph (3).

The Limited Liability Company Act does not authorize the secretary of state to
convert a nonprofit corporation to a profit corporation or limited liability
company. -- The Limited Liability Company Act (LLC Act), 53-19-1 to 53-19-74 NMSA
1978, contains specific references to conversions from one business entity type to
another, namely a corporation, partnership or limited partnership may be converted to a
limited liability company (LLC) or an LLC may be converted to a corporation, partnership
or limited partnership, but no provision of the LLC Act provides for other types of entity
transformations, such as a conversion of a nonprofit corporation to another type of
business entity like a profit corporation or an LLC. Accordingly, the secretary of state
cannot convert previously licensed nonprofit corporation medical cannabis producers to
domestic profit corporations or LLCs. Conversion of Medical Cannabis Distributors
Nonprofits (8/27/21), Att'y Gen. Adv. Ltr. 2021-10.

53-19-60.1. Conversions and mergers; conversion of limited liability
company to corporation, partnership or limited partnership.

    A. A limited liability company may be converted to a corporation, partnership or
limited partnership pursuant to this section.

    B. The terms and conditions of a conversion of a limited liability company to a
corporation, partnership or limited partnership shall be approved by the number or
percentage of the members or managers specifically required for conversion in the
operating agreement or, in absence of such a provision in the operating agreement, by
all the members.

    C. An agreement of conversion shall set forth the terms and conditions of the
conversion of the members' interests in the limited liability company into interests in the
corporation, partnership or limited partnership or the cash or other consideration to be
paid or delivered as a result of the conversion of the members' interests, or a
combination of these.

    D. After a conversion is approved under Subsection B of this section, the limited
liability company shall file with the commission [secretary of state], if the converted
entity is a partnership, a statement containing the items set forth below, if the converted
entity is a corporation, articles of incorporation and a statement containing the items set
forth below and, if the converted entity is a limited partnership, a certificate of limited
partnership and a statement containing the items set forth below:

         (1) a statement that the corporation, partnership or limited partnership was
converted from a limited liability company;

         (2) the former name of the limited liability company;

         (3) a statement of the number of votes cast by the members or managers
entitled to vote for and against the conversion and, if the vote is other than a unanimous
vote of the members, the number or percentage of members or managers required to
approve the conversion under Subsection B of this section; and

         (4) a statement that the articles of organization of the limited liability company
are to be canceled as of the date the conversion takes effect.

    E. The filing of articles of incorporation for a corporation, a statement for a
partnership or a certificate of limited partnership for a limited partnership resulting from
a conversion pursuant to this section, cancels the articles of organization of the limited
liability company as of the date the conversion takes effect.

    F. A conversion takes effect when articles of incorporation, a certificate of limited
partnership or statement required if the converted entity is a partnership, are filed with
the commission [secretary of state] or at any later date specified in the filed document.

History: 1978 Comp., § 53-19-60.1, enacted by Laws 2001, ch. 200, § 79; 2003, ch.
318, § 57.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, in Subsection B, substituted "by the" for
"by all of the members or by a" following "shall be approved", inserted "specifically"
following "members or managers", added "or, in absence of such a provision in the
operating agreement, by all the members" at the end; substituted "interests" for
"interest" following "of the members"' in Subsection C.

The Limited Liability Company Act does not authorize the secretary of state to
convert a nonprofit corporation to a profit corporation or limited liability
company. -- The Limited Liability Company Act (LLC Act), 53-19-1 to 53-19-74 NMSA
1978, contains specific references to conversions from one business entity type to
another, namely a corporation, partnership or limited partnership may be converted to a
limited liability company (LLC) or an LLC may be converted to a corporation, partnership
or limited partnership, but no provision of the LLC Act provides for other types of entity
transformations, such as a conversion of a nonprofit corporation to another type of
business entity like a profit corporation or LLC. Accordingly, the secretary of state
cannot convert previously licensed nonprofit corporation medical cannabis producers to
domestic profit corporations or LLCs. Conversion of Medical Cannabis Distributors
Nonprofits (8/27/21), Att'y Gen. Adv. Ltr. 2021-10.

53-19-61. Conversions and mergers; effect of conversion.

    A. A corporation, partnership, limited liability company or limited partnership that
has been converted pursuant to Section 53-19-60 or 53-19-60.1 NMSA 1978 is for all
purposes the same entity that existed before the conversion.

    B. When a conversion takes effect:

         (1) all property owned by the converting entity is vested in the converted
entity;

         (2) all debts, liabilities and other obligations of the converting entity continue
as obligations of the converted entity;

         (3) an action or proceeding pending by or against the converting entity may
be continued as if the conversion had not occurred;

         (4) except as prohibited by other law, all of the rights, privileges, immunities,
powers and purposes of the converting entity are vested in the converted entity; and
         (5) except as otherwise provided in the agreement of conversion under
Subsection C of Section 53-19-60 NMSA 1978, all of the owners of the converting entity
continue as owners of the converted entity.

History: 1978 Comp., § 53-19-61, enacted by Laws 1995, ch. 213, § 9; 2001, ch. 200, §
80.

                                               ANNOTATIONS

Repeals and reenactments. -- Laws 1995, ch. 213, § 9 repealed 53-19-61 NMSA
1978, as enacted by Laws 1993, ch. 280, § 61, relating to articles of merger or
consolidation, and enacted a new section, effective June 16, 1995.

The 2001 amendment, effective July 1, 2001, inserted "corporation", "limited liability
company" and "or 53-19-60.1" in Subsection A; in Subsection B, substituted "entity" for
"partnership or limited partnership" and "converted entity" for "limited liability company"
throughout the subsection, and substituted the first instance of "owners" for "partners"
and the second instance for "members" in Paragraph (5).

53-19-62. Conversions and merger of entities.

    A. Pursuant to a plan of merger approved under Subsection C of this section, a
limited liability company may be merged with or into one or more limited liability
companies, foreign limited liability companies, corporations, foreign corporations,
partnerships, foreign partnerships, limited partnerships, foreign limited partnerships or
other domestic or foreign entities.

    B. A plan of merger shall set forth:

         (1) the name of each entity that is a party to the merger;

         (2) the name of the surviving entity into which the other entities will merge;

         (3) the type of organization of the surviving entity;

         (4) the terms and conditions of the merger;

         (5) the manner and basis for converting the interests of each party to the
merger into interests or obligations of the surviving entity or into money or other
property in whole or in part; and

         (6) the street address of the surviving entity's principal place of business.

    C. A plan of merger shall be approved:
         (1) in the case of a limited liability company that is a party to the merger, by
the members representing the percentage of voting power of all members specified in
the operating agreement for approval of mergers, but not fewer than the members
holding a majority of the voting power of all members or, if provision is not made in the
operating agreement, by all the members;

         (2) in the case of a foreign limited liability company that is a party to the
merger, by the vote required for approval of a merger by the law of the state or foreign
jurisdiction in which the foreign limited liability company is organized;

         (3) in the case of a partnership or domestic limited partnership that is a party
to the merger, by the vote required for approval of a conversion under Subsection B of
Section 53-19-60 NMSA 1978; and

         (4) in the case of any other entities that are parties to the merger, by the vote
required for approval of a merger by the law of this state or of the other state or foreign
jurisdiction in which the entity is organized and, in the absence of such a requirement,
by all the owners of interests in the entity.

    D. After a plan of merger is approved and before the merger takes effect, the plan
may be amended or abandoned as provided in the plan.

    E. The merger is effective upon the filing of the articles of merger with the
commission [secretary of state] or at such later date as the articles may provide.

History: 1978 Comp., § 53-19-62, enacted by Laws 1995, ch. 213, § 10; 2003, ch. 318,
§ 58.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Repeals and reenactments. -- Laws 1995, ch. 213, § 10 repealed 53-19-62 NMSA
1978, as enacted by Laws 1993, ch. 280, § 62, relating to effects of merger or
consolidation, and enacted a new section, effective June 16, 1995.
The 2003 amendment, effective July 1, 2003, substituted "shall" for "must" following
"plan of merger" in Subsections B and C; inserted "for approval of mergers" following
"the operating agreement" in Paragraph C(1).

The Limited Liability Company Act does not authorize the secretary of state to
convert a nonprofit corporation to a profit corporation or limited liability
company. -- The Limited Liability Company Act (LLC Act), 53-19-1 to 53-19-74 NMSA
1978, contains specific references to conversions from one business entity type to
another, namely a corporation, partnership or limited partnership may be converted to a
limited liability company (LLC) or an LLC may be converted to a corporation, partnership
or limited partnership, but no provision of the LLC Act provides for other types of entity
transformations, such as a conversion of a nonprofit corporation to another type of
business entity like a profit corporation or LLC. Accordingly, the secretary of state
cannot convert previously licensed nonprofit corporation medical cannabis producers to
domestic profit corporations or LLCs. Conversion of Medical Cannabis Distributors
Nonprofits (8/27/21), Att'y Gen. Adv. Ltr. 2021-10.

53-19-62.1. Conversion and mergers; articles of merger.

    A. After approval of the plan of merger under Subsection C of Section 53-19-62
NMSA 1978, unless the merger is abandoned under Subsection D of Section 53-19-62
NMSA 1978, articles of merger must be signed on behalf of each limited liability
company and other entity that is a party to the merger and delivered to the commission
[secretary of state] for filing. The articles must set forth:

         (1) the name and jurisdiction of formation or organization of each of the
limited liability companies and other entities that are parties to the merger;

         (2) for each limited liability company that is to merge, the date its articles of
organization were filed with the commission [secretary of state];

         (3) that a plan of merger has been approved and signed by each limited
liability company and other entity that is to merge;

         (4) the name and address of the surviving limited liability company or other
surviving entity;

         (5) the effective date of the merger;

         (6) if a limited liability company is the surviving entity, such changes in its
articles of organization as are necessary by reason of the merger;

         (7) if a party to a merger is a foreign limited liability company, the jurisdiction
and date of filing of its initial articles of organization and the date when its application for
authority was filed with the commission [secretary of state] or, if an application has not
been filed, a statement to that effect; and
         (8) if the surviving entity is not a limited liability company, an agreement that
the surviving entity may be served with process in this state in any action or proceeding
for the enforcement of any liability or obligation of any limited liability company
previously subject to suit in this state that is to merge, and for the enforcement, as
provided in the Limited Liability Company Act, of the right of members of any limited
liability company to receive payment for their interest against the surviving entity.

    B. If a foreign limited liability company is the surviving entity of a merger, it may not
do business in this state until an application for that authority is filed with the
commission [secretary of state].

    C. The surviving limited liability company or other entity shall furnish a copy of the
plan of merger, on request and without cost, to any member of any limited liability
company or any person holding an interest in any other entity that is to merge.

    D. Articles of merger operate as an amendment to the limited liability company's
articles of organization.

History: 1978 Comp., § 53-19-62.1, enacted by Laws 1995, ch. 213, § 11.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-19-62.2. Conversions and mergers; effect of merger.

    A. When a merger takes effect:

         (1) the separate existence of each limited liability company and other entity
that is a party to the merger, other than the surviving entity, terminates;

         (2) all property owned by each of the limited liability companies and other
entities that are party to the merger vests in the surviving entity;

         (3) all debts, liabilities and other obligations of each limited liability company
and other entity that is party to the merger become the obligations of the surviving
entity;
         (4) an action or proceeding pending by or against a limited liability company
or other party to a merger may be continued as if the merger had not occurred or the
surviving entity may be sustained as a party to the action or proceeding; and

         (5) except as prohibited by other law, all the rights, privileges, immunities,
powers and purposes of every limited liability company and other entity that is a party to
a merger become vested in the surviving entity.

    B. The commission [secretary of state] is an agent for service of process in an
action or proceeding against the surviving foreign entity to enforce an obligation of any
party to a merger if the surviving foreign entity fails to appoint or maintain an agent
designated for service of process in this state or the agent for service of process cannot
with reasonable diligence be found at the designated office. Upon receipt of process,
the commission [secretary of state] shall send a copy of the process by registered or
certified mail, return receipt requested, to the surviving entity at the address set forth in
the articles of merger. Service is effected under this subsection at the earliest of:

         (1) the date the company receives the process, notice or demand;

         (2) the date shown on the return receipt, if signed on behalf of the company;
or

         (3) five days after its deposit in the mail, if mailed postpaid and correctly
addressed.

    C. A member of the surviving limited liability company is liable for all obligations of a
party to the merger for which the member was personally liable before the merger.

    D. Unless otherwise agreed, a merger of a limited liability company that is not the
surviving entity in the merger does not require the limited liability company to wind up its
business under the Limited Liability Company Act or to pay its liability and distribute its
assets pursuant to the Limited Liability Company Act.

    E. Articles of merger serve as articles of dissolution for a limited liability company
that is not the surviving entity in the merger.

History: 1978 Comp., § 53-19-62.2, enacted by Laws 1995, ch. 213, § 12.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-19-62.3. Conversion and mergers; non-exclusivity.

    Sections 53-19-59 through 53-19-62.2 NMSA 1978 do not preclude an entity from
being converted or merged under other law.

History: 1978 Comp., § 53-19-62.3, enacted by Laws 1995, ch. 213, § 13.

53-19-63. Filing, service and copying fees.

    The secretary of state shall charge and collect:

    A. for filing the original articles of organization and issuing a certificate of
organization, fifty dollars ($50.00);

    B. for filing amended or restated articles of merger and issuing a certificate of
amended or restated articles, fifty dollars ($50.00);

    C. for filing articles of merger, conversion or consolidation and issuing a certificate
of consolidation, one hundred dollars ($100);

    D. for filing articles of dissolution or revocation of dissolution, twenty-five dollars
($25.00);

    E. for issuing a certificate for any purpose not otherwise specified, twenty-five
dollars ($25.00);

    F. for furnishing written information on any limited liability company, twenty-five
dollars ($25.00);

    G. for providing from the secretary's records any document or instrument, ten dollars
($10.00), and twenty-five dollars ($25.00) for certification of documents or instruments;

    H. for accepting an application for reservation of a name or for filing a notice of the
transfer of any name reservation, twenty dollars ($20.00);

    I. for filing a statement of change of address of registered office or registered
agent, or both, twenty dollars ($20.00);

    J. for filing an agent's statement of change of address of registered agent, twenty
dollars ($20.00);
    K. for issuing a registration to a foreign limited liability company, one hundred
dollars ($100);

    L. for filing an amendment of the registration of a foreign limited liability company,
fifty dollars ($50.00); and

    M. for filing an application for cancellation of registration of a foreign limited liability
company and issuing a certificate of cancellation, twenty-five dollars ($25.00).

History: Laws 1993, ch. 280, § 63; 1995, ch. 213, § 14; 2001, ch. 200, § 81; 2003, ch.
318, § 59; 2015, ch. 66, § 11.

                                               ANNOTATIONS

The 2015 amendment, effective July 1, 2015, authorized the secretary of state to
charge and collect certain fees from corporations; in the introductory sentence of the
section, changed "public regulation commission" to "secretary of state"; in Subsection A,
after "organization,", deleted "a fee of"; in Subsection B, after "restated articles", deleted
"a fee of"; in Subsection C, after "consolidation", deleted "a fee of"; in Subsection D,
after "dissolution" deleted "a fee of"; in Subsection E, after "specified", deleted "a fee
of"; in Subsection F, after "company", deleted "a fee of"; in Subsection G, after
"providing from the", deleted "commission's" and added "secretary's", after "instrument",
deleted "a fee of one dollar ($1.00) per page, but in one case less than", and after
"($10.00), and", deleted "a fee of"; in Subsection H, after "reservation", deleted "a fee
of"; in Subsection I, after "both", deleted "a fee of", in Subsection J, after "registered
agent", deleted "for each affected limited liability company"; in Subsection K, after
"liability company", deleted "a fee of"; in Subsection L, after "company", deleted "a fee
of"; and in Subsection M, after "cancellation", deleted "a fee of".

The 2003 amendment, effective July 1, 2003, inserted "public regulation" near the
beginning of the introductory paragraph; added Subsection J and redesignated former
Subsections J to L as Subsections K to M.

The 2001 amendment, effective July 1, 2001, inserted "conversion" in Subsection C.

The 1995 amendment, effective June 16, 1995, in Subsection G, substituted "a fee of
one dollar ($1.00) per page, but in no case less than ten dollars ($10.00), and a fee of
twenty-five dollars ($25.00)" for "a fee of one dollar ($1.00), plus one dollar ($1.00) per
page and one dollar ($1.00) per page".

53-19-64. Execution by judicial act.

    Any person who is adversely affected by the failure or refusal of any person to
execute or file any articles or other document to be filed pursuant to the Limited Liability
Company Act may petition the court in the county where the registered office of the
limited liability company is located or, if no such address is on file with the commission
[secretary of state], in Santa Fe county, to direct the execution and filing of the articles
or other document. If the court finds that it is proper for the articles or other document to
be executed and filed and that there has been failure or refusal to execute and file such
articles or other documents, it shall order the commission [secretary of state] to file the
appropriate articles or other document.

History: Laws 1993, ch. 280, § 64.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-19-65. Rules of construction.

    A. It is the policy of the Limited Liability Company Act to give maximum effect to the
principle of freedom of contract and to the enforceability of operating agreements of
limited liability companies.

    B. Unless displaced by particular provisions of the Limited Liability Company Act,
the principles of law and equity supplement that act, including such principles applicable
to corporations and their owners.

    C. Rules that statutes in derogation of the common law are to be strictly construed
shall have no application to the Limited Liability Company Act.

    D. The Limited Liability Company Act shall not be construed so as to impair the
obligations of any contract existing when that act goes into effect nor affect any action
or proceedings begun or rights accrued before that act takes effect.

History: Laws 1993, ch. 280, § 65.

53-19-66. Powers of commission [secretary of state].

    The commission [secretary of state] has the power and authority reasonably
necessary to enable it to administer the Limited Liability Company Act efficiently and to
perform the duties therein imposed upon it.
History: Laws 1993, ch. 280, § 66.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-19-66.1. Administrative revocation.

    A limited liability company may be revoked by the commission [secretary of state] if:

    A. the limited liability company has failed for a period of thirty days to appoint and
maintain a registered agent as required by the Limited Liability Company Act; or

    B. the limited liability company has failed for a period of thirty days, after change of
its registered office or registered agent, to file in the office of the commission [secretary
of state] a statement of the change as required by the Limited Liability Company Act.

History: Laws 2001, ch. 200, § 74.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Effective dates. -- Laws 2001, ch. 200, § 101 made Laws 2001, ch. 200, § 74 effective
July 1, 2001.

53-19-66.2. Reinstatement following administrative revocation.
    A. A limited liability company administratively revoked pursuant to the Limited
Liability Company Act may apply to the commission [secretary of state] for
reinstatement within two years after the effective date of revocation. The application
must:

         (1) recite the name of the limited liability company and the effective date of its
administrative revocation;

         (2) state that the ground or grounds for revocation either did not exist or have
been eliminated; and

         (3) state that the limited liability company's name satisfies the requirements of
Section 53-19-3 NMSA 1978.

    B. If the commission [secretary of state] determines that the application contains the
information required by Subsection A of this section and that the information is correct, it
shall cancel the certificate of revocation and prepare a certificate of reinstatement that
recites its determination and the effective date of reinstatement, file the original of the
certificate and serve a copy on the limited liability company.

    C. When the reinstatement is effective, it relates back to and takes effect as of the
effective date of the administrative revocation and the limited liability company resumes
carrying on its business as if the administrative revocation had never occurred.

History: Laws 2001, ch. 200, § 75.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Effective dates. -- Laws 2001, ch. 200, § 101 made Laws 2001, ch. 200, § 75 effective
July 1, 2001.

53-19-67. Appeal from commission [secretary of state].

    If the commission [secretary of state] fails to approve any articles of organization,
articles of amendment, articles of merger or consolidation or articles of dissolution or
any other document required or permitted by the Limited Liability Company Act to be
approved by the commission [secretary of state] before it is filed in its office, it shall,
within fifteen working days after the delivery thereof to it, give written notice of its
disapproval to the person delivering the same, specifying the reasons therefor. From the
disapproval, the person may appeal to the district court pursuant to the provisions of
Section 39-3-1.1 NMSA 1978.

History: Laws 1993, ch. 280, § 67; 1998, ch. 55, § 50; 1999, ch. 265, § 53.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Cross references. -- For procedures governing administrative appeals to the district
court, see Rule 1-074 NMRA.

The 1999 amendment, effective July 1, 1999, substituted "Section 39-3-1.1" for
"Section 12-8A-1" in the last sentence.

The 1998 amendment, effective September 1, 1998, rewrote this section to the extent
that a detailed comparison is impracticable.

53-19-68. Issuance of certificate of good standing and compliance.

    The commission [secretary of state] may issue a certificate of good standing and
compliance for a limited liability company or foreign limited liability company registered
to transact business in New Mexico. If the person requesting the issuance of any such
certificate is the limited liability company which is the subject of the certificate, the
commission [secretary of state] may require that all fees due at the time of the request
be paid before such certificate is issued.

History: Laws 1993, ch. 280, § 68.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.
Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-19-69. Certificates and certified copies to be received in
evidence.

    All certificates issued by the commission [secretary of state] in accordance with the
provisions of the Limited Liability Company Act and all copies of documents filed in its
office in accordance with the provisions of the Limited Liability Company Act, when
certified by it, shall be taken and received in all courts, public offices and official bodies
as prima facie evidence of the facts therein stated, and may be filed and recorded with
the respective county clerks. A certificate by the commission [secretary of state] under
its seal as to the existence or nonexistence of the facts relating to limited liability
companies or foreign limited liability companies shall be taken and received in all courts,
public offices and official bodies as prima facie evidence of the existence or
nonexistence of the facts therein stated.

History: Laws 1993, ch. 280, § 69.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-19-70. Forms furnished by the commission [secretary of state].

    Forms for all documents to be filed in the office of the commission [secretary of
state] may be furnished by the commission [secretary of state] on request therefor, but
the use thereof, unless otherwise specifically prescribed by law, is not mandatory.

History: Laws 1993, ch. 280, § 70.

                                               ANNOTATIONS
Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-19-71. Application to existing limited liability companies.

    The provisions of the Limited Liability Company Act apply to all existing foreign
limited liability companies which have obtained a certificate of authority to transact
business in New Mexico issued pursuant to provisions of the Business Corporation Act
[Chapter 53, Articles 11 to 18 NMSA 1978]. Any such limited liability company shall
reapply for registration under the Limited Liability Company Act. The commission
[secretary of state] shall have authority to revoke upon reasonable prior written notice
any certificate of authority to transact business in New Mexico which was issued
pursuant to provisions of the Business Corporation Act prior to the effective date of the
Limited Liability Company Act.

History: Laws 1993, ch. 280, § 71.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

53-19-72. Application to foreign and interstate commerce.

    The provisions of the Limited Liability Company Act apply to commerce with foreign
nations and among the several states only insofar as permitted under the provisions of
the constitution of the United States.

History: Laws 1993, ch. 280, § 72.
53-19-73. Reservation of power.

    The legislature reserves power to amend, repeal or modify all or any part of the
Limited Liability Company Act at any time and such changes shall be binding upon all
limited liability companies and foreign limited liability companies subject to the
provisions of the Limited Liability Company Act.

History: Laws 1993, ch. 280, § 73.

53-19-74. Commission's [secretary of state's] retention of records.

    The commission [secretary of state] shall provide, pursuant to the provisions of the
Public Records Act [Chapter 14, Article 3 NMSA 1978], for the retention, storage and
destruction of any documents filed with the commission [secretary of state].

History: Laws 1993, ch. 280, § 74.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

ARTICLE 20
Foreign Business Trust Administration

53-20-1. Short title.

    Chapter 53, Article 20 NMSA 1978 may be cited as the "Foreign Business Trust
Registration Act".

History: Laws 2001, ch. 200, § 83; 2015, ch. 66, § 12.

                                               ANNOTATIONS

The 2015 amendment, effective July 1, 2015, changed the statutory reference of the
Foreign Business Trust Registration Act from "Sections 84 through 100 of this act" to
"Chapter 53, Article 20 NMSA 1978".
53-20-2. Definitions.

    As used in the Foreign Business Trust Registration Act:

    A. "business trust" means an entity engaged in a trade or business that is created
by a declaration of trust that transfers property to trustees, to be held and managed by
them for the benefit of persons holding certificates representing the beneficial interest in
the trust estate and assets; and

    B. "foreign business trust" means a business trust formed under the laws of a state
other than New Mexico.

History: Laws 2001, ch. 200, § 84.

                                               ANNOTATIONS

Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

53-20-3. Certificate of authority; necessity to obtain to transact
business; what constitutes not transacting business.

    A. A foreign business trust shall not transact business in this state unless it first
obtains a certificate of authority from the public regulation commission [secretary of
state]. A foreign business trust is not entitled to obtain a certificate of authority to
transact a business in this state that it is not permitted to transact in the state or country
in which it was created.

    B. The following activities do not constitute transacting business within the meaning
of Subsection A of this section:

         (1) maintaining, defending or effecting the settlement of an action, suit or
administrative or arbitration proceeding, or effecting the settlement of claims or
disputes;

         (2) maintaining bank accounts;

         (3) maintaining offices or agencies for the transfer, exchange and registration
of its securities, or appointing and maintaining trustees or depositories with relation to its
securities;

         (4) soliciting or procuring orders when the orders require acceptance outside
of this state before becoming binding contracts;

         (5) transacting business in interstate commerce;
         (6) holding meetings of the board of trustees or holders of beneficial interest
or carrying on other activities concerning internal affairs;

         (7) selling through independent contractors;

         (8) creating or procuring indebtedness, mortgages and security interests in
real and personal property;

         (9) conducting an isolated transaction that is completed within a period of
thirty days and not in the course of a number of repeated transactions of a similar
nature;

         (10) securing or collecting debts or enforcing mortgages and security interests
in property securing the debts; or

         (11) owning without more, real or personal property.

History: Laws 2001, ch. 200, § 85.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

53-20-4. Name of foreign business trust.

    A. The name of a foreign business trust set forth in its certificate of trust shall be
distinguishable from the name shown in the records of the public regulation commission
[secretary of state] of any corporation, limited partnership, limited liability company,
investment trust or limited liability partnership reserved, registered, formed or organized
under the laws of New Mexico or qualified to do business or registered as a foreign
corporation, foreign limited partnership, foreign limited liability company, foreign
investment trust or foreign limited liability partnership in New Mexico; except that a
foreign business trust may register under any name that is not distinguishable from the
name shown in the records of the commission [secretary of state] of a domestic or
foreign corporation, limited partnership, limited liability company, investment trust or
limited liability partnership reserved, registered, formed or organized under the laws of
New Mexico if the foreign business trust has the written consent of the other entity to
use the name and if the written consent is filed with the commission [secretary of state].

    B. The name of a foreign business trust set forth in its certificate of trust may
contain the name of a beneficial owner, a trustee or any other person.

    C. The name of a foreign business trust set forth in its certificate of trust may
contain the following words: "company", "association", "club", "foundation", "fund",
"institute", "society", "union", "syndicate", "limited" or "trust" or abbreviations of similar
import.

    D. The exclusive right to the use of a name may be reserved by a foreign business
trust in accordance with the Business Corporation Act [Chapter 53, Articles 11 to 18
NMSA 1978].

History: Laws 2001, ch. 200, § 86.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

53-20-5. Prohibited change of name; penalties.

    If a foreign business trust authorized to transact business in this state changes its
name to one under which a certificate of authority would not be granted to it on
application therefor, the certificate of authority of the foreign business trust shall be
suspended, and it shall not thereafter transact business in this state until it changes its
name to a name that is available to it under the laws of this state and obtains a
certificate of correction or amendment.

History: Laws 2001, ch. 200, § 87.
                                               ANNOTATIONS

Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

53-20-6. Application for certificate of authority.

    A. A foreign business trust, in order to obtain a certificate of authority to transact
business in New Mexico, shall make application to the secretary of state. The
application shall set forth:

         (1) the name of the foreign business trust and, if different, the name under
which it proposes to transact business in New Mexico;

         (2) the date of declaration of trust;

         (3) the address of the principal office of the foreign business trust in the state
or country under the laws of which it is organized;

         (4) the address of the registered office of the foreign business trust in New
Mexico, the name of its registered agent in New Mexico at that address and an
acceptance of the appointment signed by the agent appointed; and

         (5) the purposes of the foreign business trust that it proposes to pursue in the
transaction of business in New Mexico.

    B. The application shall be made on forms prescribed and furnished by the
secretary of state or on forms containing substantially the same information as forms
prescribed by the secretary and shall be executed by a person with authority to do so
under the laws of the state or jurisdiction of its formation.

    C. A foreign business trust shall deliver with the completed application a certificate
of good standing and compliance issued by the appropriate official of the state or
country having custody of trust records under the laws of which the trust is created, that
is current within thirty days and that has not expired by the time of receipt by the
secretary.

History: Laws 2001, ch. 200, § 88; 2003, ch. 318, § 60; 2015, ch. 66, § 13.

                                               ANNOTATIONS

The 2015 amendment, effective July 1, 2015, required foreign business trusts to file
applications for a certificate of authority with the secretary of state; in the introductory
language of Subsection A, after "business in", deleted "this state" and added "New
Mexico", and after "application to the", deleted "public regulation commission" and
added "secretary of state"; in Paragraph (1) of Subsection A, after "business in", deleted
"this state" and added "New Mexico"; in Paragraph (4) of Subsection A, after "trust in",
deleted "this state" and added "New Mexico", and after "agent in", deleted "this state"
and added "New Mexico"; in Paragraph (5) of Subsection A, after "business in", deleted
"this state" and added "New Mexico"; in Subsection B, after "furnished by the", deleted
"public regulation commission" and added "secretary of state", and after "prescribed by
the", deleted "commission" and added "secretary"; and in Subsection C, after "certificate
of", deleted "existence, or a document of similar import, duly authenticated by the
secretary of state or other official having custody of trust records in the state or
jurisdiction under whose law it is created" and added the remainder of the section.

The 2003 amendment, effective July 1, 2003, inserted "or on forms containing
substantially the same information as forms prescribed by the commission" following
"public regulation commission" in Subsection B.

53-20-7. Issuance of certificate of authority.

    A. If the public regulation commission [secretary of state] finds that the application
for a certificate of authority meets the requirements of the Foreign Business Trust
Registration Act and the requisite fees have been paid, it shall:

         (1) endorse on the original the word "filed" and the month, day and year of the
filing;

         (2) file in its office the original of the application; and

         (3) issue a certificate of authority to transact business in this state to which it
shall affix a copy of the application.

    B. The certificate of authority, together with a copy of the application affixed to it,
shall be returned by the public regulation commission [secretary of state] to the
business trust or its representative.

History: Laws 2001, ch. 200, § 89.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.
Cross references. -- For penalties imposed for failure to obtain a certificate of
authority, see 53-20-16 NMSA 1978.

Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

Temporary provisions. -- Laws 2001, ch. 200, § 100 delineated the rights of foreign
business trusts transacting business in the state as of the effective date of the Foreign
Business Trust Registration Act, July 1, 2001.

Laws 2001, ch. 200, § 100(B) provided foreign business trusts existing and transacting
business in New Mexico on July 1, 2001 a period of up to one year in which to fulfill the
requirements to obtain a certificate of authority of the Foreign Business Trust
Registration Act; while § 100(A) states that these foreign business trusts will be treated
as having a certificate of authority during the period before they obtain it. Starting July 1,
2002 all foreign business trusts must have a certificate of authority to transact business
in New Mexico.

53-20-8. Changes and amendments.

    If a statement in the application for certificate of authority of a foreign business trust
was false when made or any arrangements or other facts described have changed,
making the application inaccurate in any respect, the foreign business trust shall
promptly file with the public regulation commission [secretary of state] a certificate,
signed by an authorized person, correcting the statement, together with the fee required
by Section 98 [99] [53-20-17 NMSA 1978] of the Foreign Business Trust Registration
Act.

History: Laws 2001, ch. 200, § 90.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The reference to "Section 98" in this section appears to be misnumbered due to
sections added and removed in the legislative process and not updated in this
reference. The numbering should read "Section 99".
Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

53-20-9. Registered office and registered agent; requirement of
maintenance in state.

    A foreign business trust authorized to transact business in this state shall have and
continuously maintain in this state:

    A. a registered office, which may be the same as its place of business in this state;
and

    B. a registered agent, which may be either an individual resident in this state whose
business office is identical with the registered office, or a domestic or foreign
corporation, limited partnership, limited liability company, limited liability partnership or
investment trust authorized to transact business in this state, having a business office
identical with the registered office of the foreign business trust.

History: Laws 2001, ch. 200, § 91.

                                               ANNOTATIONS

Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

53-20-10. Registered office and registered agent; change;
resignation of registered agent.

    A. A foreign business trust authorized to transact business in this state may change
its registered office or change its registered agent, or both, upon filing with the public
regulation commission [secretary of state] a statement setting forth:

         (1) the name of the foreign business trust;

         (2) the address of its registered office;

         (3) if the address of its registered office is changed, the address to which it is
to be changed;

         (4) the name of the foreign business trust's registered agent;

         (5) if its registered agent is changed, the name of the successor registered
agent;
         (6) a statement that the address of its registered office and the address of the
business office of its registered agent, as changed, will be identical; and

         (7) that the change was authorized by resolution duly adopted by its trustees.

    B. The statement shall be executed by the foreign business trust by an authorized
person and delivered to the public regulation commission [secretary of state]. If the
commission [secretary of state] finds that the statement meets the requirements of this
section, it shall file the statement, and, when filed, the change of address of the
registered office or the appointment of the new registered agent, or both, shall become
effective. A registered agent of a foreign business trust may resign as registered agent
by filing a written notice of resignation with the commission [secretary of state], and the
commission [secretary of state] shall mail immediately a copy of the notice to the foreign
business trust at its principal office in the state or country under the laws of which it is
organized. The appointment of the agent terminates upon the expiration of thirty days
after receipt of the notice by the commission [secretary of state].

    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 foreign business trust for which the registered agent is the registered agent
by notifying the foreign business trust in writing of the change and signing, either
manually or in facsimile, and delivering to the public regulation commission [secretary of
state] for filing a statement that complies with the requirements of this section but need
not be responsive to Paragraph (5) of Subsection A of this section and recites that the
foreign business trust has been notified of the change.

History: Laws 2001, ch. 200, § 92; 2003, ch. 318, § 61.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, added Subsection C.

53-20-11. Service of process.
    A. The registered agent appointed by a foreign business trust authorized to transact
business in this state shall be an agent of the foreign business trust upon whom may be
served any process, notice or demand required or permitted by law to be served upon
the foreign business trust.

    B. A foreign business trust may be served by registered or certified mail, return
receipt requested, addressed to a trustee of the foreign business trust at its principal
office shown on its application for a certificate of authority if the foreign business trust:

         (1) has no registered agent or its registered agent cannot be served with
reasonable diligence;

         (2) has withdrawn from transacting business in New Mexico; or

         (3) has had its certificate of authority revoked.

    C. Service is perfected under Subsection B of this section at the earliest of:

         (1) the date the foreign business trust receives the mail;

         (2) the date shown on the return receipt, if signed on behalf of the foreign
business trust; or

         (3) five days after its deposit in the United States mail, if mailed postpaid and
correctly addressed.

    D. This section does not prescribe the only means, or necessarily the required
means, of serving a foreign business trust described in Subsection B of this section.

History: Laws 2001, ch. 200, § 93.

                                               ANNOTATIONS

Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

53-20-12. Certificate of withdrawal; application and filing.

    A. A foreign business trust authorized to transact business in this state may
withdraw from this state upon obtaining from the public regulation commission
[secretary of state] a certificate of withdrawal. To obtain the certificate, the foreign
business trust shall deliver to the commission [secretary of state] an application for
withdrawal. The application shall set forth:

         (1) the name of the foreign business and the state or country under the laws
of which it is organized;
         (2) that the foreign business trust is not transacting business in this state;

         (3) that the foreign business trust surrenders its authority to transact business
in this state;

         (4) that the foreign business trust revokes the authority of its registered agent
in this state to accept service of process and consents that service of process in an
action, suit or proceeding based on a cause of action arising in this state during the time
the foreign business trust was authorized to transact business in this state may
thereafter be made on the foreign business trust by service on the secretary of state;

         (5) an address to which the secretary of state may mail a copy of any process
against the foreign business trust served on the secretary of state;

         (6) a commitment to notify the commission [secretary of state] in the future of
any change in its mailing address; and

         (7) additional information necessary or appropriate to enable the commission
[secretary of state] to determine and assess any unpaid fees or taxes payable by the
foreign business trust.

    B. The application for withdrawal shall be made on forms prescribed and furnished
by the public regulation commission [secretary of state] or on forms containing
substantially the same information as forms prescribed by the commission [secretary of
state] and shall be executed by the trust by an authorized person, or if the foreign
business trust is in the hands of a receiver or trustee, by the receiver or trustee.

History: Laws 2001, ch. 200, § 94; 2003, ch. 318, § 62.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

The 2003 amendment, effective July 1, 2003, substituted "an" for "any" following "of
process in" in Paragraph A(4) and inserted "or on forms containing substantially the
same information as forms prescribed by the commission" following "public regulation
commission" in Subsection B.
53-20-13. Certificate of withdrawal; issuance.

    A. An application of a foreign business trust for withdrawal shall be delivered to the
public regulation commission [secretary of state]. If the commission [secretary of state]
finds that the application meets the requirements of the Foreign Business Trust
Registration Act, when all fees and taxes prescribed by law have been paid it shall:

         (1) endorse on the application the word "filed" and the month, day and year of
the filing;

         (2) file the application in its office; and

         (3) issue a certificate of withdrawal.

    B. The certificate of withdrawal, together with a copy of the application for
withdrawal affixed thereto by the public regulation commission [secretary of state], shall
be returned to the foreign business trust or its representative. Upon the issuance of the
certificate of withdrawal, the authority of the foreign business trust to transact business
in this state shall cease.

History: Laws 2001, ch. 200, § 95.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

53-20-14. Certificate of authority; revocation; causes.

    A. The certificate of authority of a foreign business trust to transact business in this
state may be revoked by the public regulation commission [secretary of state] pursuant
to this section when:

         (1) the foreign business trust has failed to pay any fees prescribed by law
when they become due and payable;
         (2) the foreign business trust has failed to appoint and maintain a registered
agent in this state;

         (3) the foreign business trust has failed, after change of its registered office or
registered agent, to file with the commission [secretary of state] a statement of the
change as required by law; or

         (4) a misrepresentation has been made of any material matter in an
application, report, affidavit or other document submitted by such foreign business trust
pursuant to law.

    B. No certificate of authority of a foreign business trust shall be revoked by the
public regulation commission [secretary of state] unless:

         (1) it has given the foreign business trust not less than sixty days' prior notice
of revocation by mail addressed to its registered office in this state; and

         (2) the foreign business trust prior to revocation fails to pay fees or taxes
owed, file the required statement of change of registered agent or registered office or
correct the misrepresentation.

History: Laws 2001, ch. 200, § 96.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

53-20-15. Certificate of authority; revocation procedure.

    A. Upon revoking a certificate of authority of a foreign business trust, the public
regulation commission [secretary of state] shall:

         (1) issue a certificate of revocation in duplicate;
         (2) file one of the certificates in its office; and

         (3) mail to the foreign business trust at its registered office in this state a
notice of the revocation accompanied by the other certificate.

    B. Upon issuance of the certificate of revocation, the authority of the foreign
business trust to transact business in this state ceases.

History: Laws 2001, ch. 200, § 97.

                                               ANNOTATIONS

Bracketed material. -- The bracketed material was inserted by the compiler and is not
part of the law.

Laws 2013, ch. 75, § 9 provided that as of July 1, 2013, the secretary of state, pursuant
to N.M. const., Art. 11, § 19, shall assume responsibility for chartering corporations as
provided by law, including the performance of the functions of the former corporations
bureau of the public regulation commission, and that except for Subsection D of 53-5-8
NMSA 1978, references to the "public regulation commission", "state corporation
commission" or "commission" shall be construed to be references to the secretary of
state. See 8-4-7 NMSA 1978.

Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

53-20-16. Consequences of transacting business without authority.

    A. A foreign business trust transacting business in this state without a certificate of
authority may not maintain a proceeding in any court in this state until it obtains a
certificate of authority.

    B. The successor to a foreign business trust that transacted business in this state
without a certificate of authority and the assignee of a cause of action arising out of that
business may not maintain a proceeding based on that cause of action in any court in
this state until the foreign business trust or its successor obtains a certificate of
authority.

    C. A court may stay a proceeding commenced by a foreign business trust, its
successor or assignee until it determines whether the foreign business trust or its
successor requires a certificate of authority. If it so determines, the court may further
stay a proceeding until the foreign business trust or its successor obtains a certificate.

    D. A foreign business trust is liable for a civil penalty of ten dollars ($10.00) for each
day, but not to exceed a total of one thousand dollars ($1,000) for each year it transacts
business in this state without a certificate of authority. The attorney general may enforce
the civil liability imposed pursuant to this subsection.

    E. The failure of a foreign business trust to obtain a certificate of authority does not
impair the validity of any contract or act of the foreign business trust or prevent it from
defending any action, suit or proceeding in any court of this state.

History: Laws 2001, ch. 200, § 98.

                                               ANNOTATIONS

Effective dates. -- Laws 2001, ch. 200, § 101 made the Foreign Business Trust
Registration Act effective July 1, 2001.

53-20-17. Fees.

    The secretary of state shall charge and collect from a foreign business trust for:

    A. filing a statement of change of address of registered office or change of
registered agent, or both, twenty-five dollars ($25.00);

    B. filing an application of a foreign business trust for a certificate of authority to
transact business in this state and issuing a certificate of authority, two hundred fifty
dollars ($250);

    C. filing an agent's statement of change of address of registered agent, twenty-five
dollars ($25.00);

    D. filing a certificate of correction or amendment of a foreign business trust
authorized to transact business in this state, fifty dollars ($50.00);

    E. filing an application for withdrawal of a foreign business trust and issuing a
certificate of withdrawal, twenty-five dollars ($25.00);

    F. filing any other statement of a foreign business trust, twenty-five dollars ($25.00);

    G. for furnishing a copy of any document, instrument or paper relating to a foreign
business trust, ten dollars ($10.00); and

    H. for furnishing a certified copy of any documents, instruments or papers relating to
a foreign business trust, twenty-five dollars ($25.00).

History: Laws 2001, ch. 200, § 99; 2003, ch. 318, § 63; 2015, ch. 66, § 14.

                                               ANNOTATIONS
The 2015 amendment, effective July 1, 2015, authorized the secretary of state to
charge and collect certain fees from foreign business trusts; in the introductory sentence
of the section, changed "public regulation commission" to "secretary of state"; in
Subsection C, after "registered agent", deleted "for each affected corporation"; in
Subsection G, after "furnishing a", deleted "certified", after "foreign business trust,",
deleted "one dollar ($1.00) per page and", after "($10.00)", deleted "for the certificate
and affixing the seal thereto"; and added Subsection H.

The 2003 amendment, effective July 1, 2003, added present Subsection C and
redesignated Subsections C to F as Subsections D to G.