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.
ANNOTATIONSCompiler'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.