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.

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.