2023 New Mexico Statutes › Chapter 53 - Corporations › Article 11 - Business Corporations; Substantive Provisions › Section 53-11-50 - Books and records; financial reports to shareholders; examination of records.

A. Each corporation shall keep correct and complete books and records of account and shall keep minutes of the proceedings of its shareholders and board of directors, and shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving the names and addresses of all shareholders and the number and class of the shares held by each. Any books, records and minutes may be in written form or in any other form capable of being converted into written form within a reasonable time.
B. Any person who shall have been a holder of record of shares or of voting trust certificates therefor at least six months immediately preceding his demand or who shall be the holder of record of, or the holder of record of voting trust certificates for, at least five percent of all the outstanding shares of the corporation, upon written demand stating the purpose thereof, may examine, in person, or by agent or attorney, at any reasonable time or times, for any proper purpose, its relevant books and records of account, minutes and record of shareholders and make extracts therefrom. Any officer or agent who, or a corporation which, shall refuse to allow any such shareholder or holder of voting trust certificates, or his agent or attorney, to examine and make extracts from its books and records of account, minutes and record of shareholders, for any proper purpose, shall be liable to the shareholder or holder of voting trust certificates in a penalty of ten percent of the value of the shares owned by the shareholder, or in respect of which such voting trust certificates are issued, in addition to any other damages or remedy afforded him by law. It shall be a defense to any action for penalties under this section that the person suing therefor has, within two years:
(1) sold or offered for sale any list of shareholders or of holders of voting trust certificates for shares of the corporation or any other corporation;
(2) aided or abetted any person in procuring any list of shareholders or of holders of voting trust certificates for any such purpose;
(3) improperly used any information secured through any prior examination of the books and records of account, or minutes, or records of shareholders or of holders of voting trust certificates for shares of the corporation or any other corporation; or
(4) not acted in good faith or for a proper purpose in making his demand.
C. Nothing in this section shall impair the power of any court of competent jurisdiction, upon proof by a shareholder or holder of voting trust certificates of proper purpose, irrespective of the period of time during which the shareholder or holder of voting trust certificates shall have been a shareholder of record or a holder of record of voting trust certificates, and irrespective of the number of shares held by him or represented by voting trust certificates held by him, to compel the production for examination by the shareholder or holder of voting trust certificates of the books and records of account, minutes and record of shareholders of a corporation.
D. Each corporation shall provide its shareholders access to at least a balance sheet as of the end of each taxable year and a statement of income for such taxable year, if the corporation prepares such financial statements for such taxable year for any purpose. Such financial statements may be consolidated statements of the corporation and one or more of its subsidiaries, but shall not be required to include the statements' supporting data or information.
History:
1953 Comp., § 51-24-48, enacted by Laws 1967, ch. 81, § 48; 1975, ch. 64, § 25; 1983, ch. 304, § 42.
ANNOTATIONS
Compiler's notes.
— This section is derived from Section 52 of the ABA Model Business Corporation Act.
The 1983 amendment,
effective June 17, 1983, added "Financial reports to shareholders; examination of records" at the end of the catchline, deleted "has" at the beginning of Paragraphs (2) and (3) of Subsection B, substituted "not acted" for "was not acting" at the beginning of Paragraph (4) of Subsection B, and substituted present Subsection D for former Subsection D, which concerned similar subject matter.
Section is not a limitation or abrogation of the common-law right of inspection
and is sometimes described as an extension or even an enlargement of the right as recognized under the common law.
Schwartzman v. Schwartzman Packing Co.
, 1983-NMSC-010, 99 N.M. 436, 659 P.2d 888.
Shareholder's right to examine books and records under this section is not unlimited.
— The right of examination must be exercised at reasonable and proper times.
Schwartzman v. Schwartzman Packing Co.
, 1983-NMSC-010, 99 N.M. 436, 659 P.2d 888.
Discretion vested in court to control right of examination.
— A trial court must of necessity have some discretion in determining when and in what manner the right of examination should be exercised.
Schwartzman v. Schwartzman Packing Co.
, 1983-NMSC-010, 99 N.M. 436, 659 P.2d 888.
Imposition of penalty under Subsection B is also within trial court's discretion.
Schwartzman v. Schwartzman Packing Co.
, 1983-NMSC-010, 99 N.M. 436, 659 P.2d 888.
Members of non-stock, nonprofit corporations
have the right to inspect the corporation's books and records.
Schein v. N. Rio Arriba Elec. Coop., Inc.
, 1997-NMSC-011, 122 N.M. 800, 932 P.2d 490.
Law reviews.
— 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).
Annual Survey of New Mexico Corporate Law, see 17 N.M.L. Rev. 253 (1987).
For note, "Corporate Law Formulating and Applying a 'Proper Purpose' Analysis to a Books & Records Inspection Request Schein v. N. Rio Arriba Elec. Coop., Inc.," see 28 N.M.L. Rev. 133 (1998).
Am. Jur. 2d, A.L.R. and C.J.S. references.
— 18A Am. Jur. 2d Corporations §§ 333 to 422.
Jurisdiction of action involving inspection of books of foreign corporation, 18 A.L.R. 1399, 89 A.L.R. 736, 155 A.L.R. 1231, 72 A.L.R.2d 1211.
Stockholder's right to inspect books and records of corporation, 22 A.L.R. 24, 43 A.L.R. 783, 59 A.L.R. 1373, 80 A.L.R. 1502, 174 A.L.R. 262, 15 A.L.R.2d 11.
Creditor's right to inspect books and records under constitutional or statutory provision relating specifically to corporations, 35 A.L.R. 752.
Power of equity to appoint receiver at instance of stockholder, because of refusal of officers to permit inspection of books, 43 A.L.R. 977, 46 A.L.R. 976, 62 A.L.R. 411, 77 A.L.R. 861, 98 A.L.R. 1264.
Right of stockholder or creditor to inspect record of corporation in hands of receiver, 92 A.L.R. 1047.
Form, particularity, and manner of designation required in subpoena duces tecum for production of corporate books, records, and documents, 23 A.L.R.2d 862.
What corporate documents are subject to shareholder's right of inspection, 88 A.L.R.3d 663.
18 C.J.S. Corporations §§ 110, 332 to 338.