If you are considering opening a business in New Mexico with a partner or partners, you need to consider that your partnership may not last forever. Just like a marriage, you must take steps to protect your interests if there is conflict or if one partner decides to get out of the relationship. One of the most common ways for partners to protect their interests is by creating a corporation.
Starting a corporation in New Mexico is not that difficult. First, you need to reserve a corporate name and ensure that isn’t already in use, prepare and file Articles of Incorporation and pay the filing fees to the Corporate Bureau of the New Mexico Public Regulation Commission. You should appoint someone to serve as the Registered Agent, who will receive any legal notices served on the corporation such as a court summons. After you have completed all of these steps, your corporation could be up and running.
Larger businesses may need to prepare and issue stock certificates and create a corporate notebook. Partners need to prepare and accept corporate bylaws, which specify how the corporation should be governed. Generally, these bylaws state who the directors and/or shareholders are, what percentage interest they may have in the corporation, and how often the directors must have meetings and the procedure for setting up the meetings. Bylaws often establish how shareholders or directors may buy out another shareholder if the shareholder wants to leave the company. Without a clear established mechanism for determining the value of the shareholder’s financial interest in the company, it’s possible that a dispute could arise about how much the remaining partners should pay to buy the leaving partner out. This kind of dispute can be acrimonious and costly.
Accordingly, when forming a company, you should consult with and hire an attorney in New Mexico who is well versed in corporate matters. The attorneys at Giddens & Gatton Law, P.C. have such expertise. Call us at 505-633-6298 to discuss with one of our attorneys the best way of approaching the corporate process. You may also visit our website at www.giddenslaw.com.