SENATE BILL 254

53rd legislature - STATE OF NEW MEXICO - second session, 2018

INTRODUCED BY

Clemente Sanchez

AN ACT

RELATING TO BUSINESS ENTITIES; PROVIDING FOR THE REGISTRATION OF ALTERNATE BUSINESS ENTITY NAMES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 53-8-7 NMSA 1978 (being Laws 1975, Chapter 217, Section 7) is amended to read:

     "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. [shall not] contain any word or phrase [which] 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. [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 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."

     SECTION 2. Section 53-8-66 NMSA 1978 (being Laws 1975, Chapter 217, Section 66) is amended to read:

     "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 [which] 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."

     SECTION 3. Section 53-12-2 NMSA 1978 (being Laws 1967, Chapter 81, Section 50, as amended) is amended to read:

     "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."

     SECTION 4. Section 53-17-3 NMSA 1978 (being Laws 1967, Chapter 81, Section 105, as amended) is amended to read:

     "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 [which] 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 [which] 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 [which] 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 [commission] 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; [or]

                (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."

     SECTION 5. Section 53-19-3 NMSA 1978 (being Laws 1993, Chapter 280, Section 3, as amended) is amended to read:

     "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 commission 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."

     SECTION 6. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2018.

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