2019 New Mexico Statutes
Chapter 53 - Corporations
Article 5 - Corporate Reports
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.

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.