2020 New Mexico Statutes
Chapter 53 - Corporations
Article 11 - Business Corporations; Substantive Provisions
Section 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.

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.