A. The shares of a corporation shall be represented by certificates or shall be uncertificated shares. Certificates shall be signed by the chairman or vice chairman of the board of directors or the president or a vice president and by the treasurer or an assistant treasurer, the secretary or an assistant secretary of the corporation, and may be sealed with the seal of the corporation or a facsimile thereof. Any or all of the signatures upon a certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon the certificate ceases to be an officer, transfer agent or registrar before the certificate is issued, it may be issued by the corporation with the same effect as if he were an officer, transfer agent or registrar at the date of its issue.

B. Every certificate representing shares issued by a corporation which is authorized to issue shares of more than one class shall set forth upon the face or back of the certificate, or shall state that the corporation will furnish to any shareholder upon request and without charge, a full statement of the designations, preferences, limitations and relative rights of the shares of each class authorized to be issued, and if the corporation is authorized to issue any preferred or special class in series, the variations in the relative rights and preferences between the shares of each series so far as the same have been fixed and determined and the authority of the board of directors to fix and determine the relative rights and preferences of subsequent series.

C. Each certificate representing shares shall state upon its face:

(1) that the corporation is organized under the laws of this state;

(2) the name of the person to whom issued; and

(3) the number and class of shares, and the designation of the series, if any, which the certificate represents.

D. No certificate shall be issued for any share until the consideration established for its issuance is fully paid.

E. Unless otherwise provided by the articles of incorporation or bylaws, the board of directors of a corporation may provide by resolution that some or all of any or all classes and series of its shares shall be uncertificated shares, provided that such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Within a reasonable time after the issuance or transfer of uncertificated shares, the corporation shall send to the registered owner thereof a written notice containing the information required to be set forth or stated on certificates pursuant to Paragraphs (2) and (3) of Subsection C of this section. Except as otherwise expressly provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificates representing shares of the same class and series shall be identical.

History: 1953 Comp., § 51-24-22, enacted by Laws 1967, ch. 81, § 22; 1975, ch. 64, § 10; 1983, ch. 304, § 33.

Compiler's notes. — This section is derived from Section 23 of the ABA Model Business Corporation Act.

The 1983 amendment, effective June 17, 1983, substituted the present catchline for "Certificates representing shares"; rewrote the former first two sentences of Subsection A as the present first three sentences, adding provisions for uncertificated shares and for signing by the treasurer or assistant treasurer and deleting language which provided for facsimile signatures if the certificate is manually signed on behalf of a transfer agent or a registrar other than the corporation or its employee; inserted "transfer agent or registrar" in three places in the last sentence of Subsection A; substituted "the same" for "they" near the end of Subsection B; deleted former Paragraph (4) of Subsection C, which read "the par value of each share represented by the certificate, or a statement that the shares are without par value"; substituted "the consideration established for its issuance" for "such share" in Subsection D; and added Subsection E; and made other minor changes.

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. — 18A Am. Jur. 2d Corporations §§ 487, 488, 490.

Corporate stock or certificate thereof as subject of conversion, 21 A.L.R. 390, 83 A.L.R. 1199.

Certificate of stock as conclusive and exclusive evidence of stockholder's rights, 31 A.L.R. 1326.

Corporation's delivery of stock certificate to stockholder as prerequisite of its issuance to him, 16 A.L.R.3d 1015.

Measure of damages for conversion of corporate stock or certificate, 31 A.L.R.3d 1286.

18 C.J.S. Corporations §§ 172 to 176.