Mexican Corporate Law: Key Concepts and Regulations

Posted on Dec 8, 2024 in Law & Jurisprudence

Key Concepts in Mexican Corporate Law

General Corporate Law Principles

1. The General Law of Corporations was published during the government of Porfirio Diaz. (False)
2. A jointly and severally liable party can be charged the full amount of credit. (False)
3. The partner company furnishes to one or more credits, be responsible for the existence and legitimacy of them but not the solvency of the debtor at the time of the contribution to society because that is for you. (False)
4. In the distribution of gains or losses, the industrial partner fails to report losses. (True)
5. The general partners of a limited partnership simply cannot exercise any act of administration. (True)
6. No limited liability company will have more than fifty members. (True)
7. The assembly of members is the supreme body of the corporation. (False)
8. When managers of a corporation are two or more, they constitute the board of directors. (True)

Capital, Profits, and Shareholder Regulations

1. The capital reduction effected by repayment to the shareholders or release granted to these unrealized exhibitions must be published in the gazette of the federal entity in which the company has its headquarters: Three times with an interval of ten days.
2. Of the net profits of any company, a minimum of 5% should be separated annually for the social fund until it reaches the fifth amount of social capital.
3. In the social contract of a limited liability company, it may provide that the partners have no right to interest over: 9% per annum not exceeding three years.
4. The resolutions of the meeting of partners of a limited liability company will be taken: By the majority vote of members representing at least half the capital.
5. Participation granted to the founders of a corporation in annual profit shall not exceed 10% or may cover a period of more than ten years.
6. In the corporation, common stock dividends shall not be assigned without first paying to the limited voting a dividend of 5%.
7. In the corporation, the stock subscribers and purchasers will be responsible for paying the outstanding amount of action for: 5 years from the date of registration of transfer.
8. The regular meeting of a corporation shall meet at least once a year within: The four months following the close of the fiscal year.

Formation and Operation of Business Entities

1. Elements involved in the formation of business entities:
   1. Personal Element
   2. Sheet Element
   3. Formal Element
2. Companies having an illicit object or performing illegal acts are void and will proceed to their immediate liquidation.
3. Reasons why the court may remove the manager of a general partnership where the partner and the social contract agreed upon his tenure: Tort, Negligence, or Inability.
4. Partners who can appoint administrators in a general partnership to monitor the actions of managers: A Controller.
5. Partners who should receive the amounts needed for food regularly: Industrial Partners.
6. Shares whose value is fully covered: Released.
7. Names given to the society that suffers from a split and resulting therefrom: The original company, called Split, is extinguished to make the new creation. The original company, without extinguishing.
8. Ways to set up a limited company:
   1. Notarized by a hearing of the people who issued the social writing.
   2. By public subscription.
9. Abbreviated as joint-stock: S. in C. by A.

Types of Business Entities and Their Characteristics

1. It is between partners who are only obliged to pay their contributions, without the two sides can be represented by negotiable instruments, to order or to bearer, it shall be assignable only in the cases and with the requirements of the law: Limited Liability Company.
2. Exists in a name and all partners are liable, on a subsidiary, jointly and severally social obligations: General Partnership.
3. It is governed by special legislation: Cooperative Societies.
4. Exists in a name and consists of one or more general partners who respond, on a subsidiary, jointly and severally, social obligations, and one or more limited partners who are only required to pay their contributions: Limited Partnership.
5. The account of the administration will pay semi-annually, if no agreement on the matter, and at any time as agreed by the partners: General Partnership.
6. It integrates with at least five partners: Cooperative Societies.
7. Its share capital shall not be less than fifty thousand pesos: Corporation.
8. Its capital is never less than three thousand pesos: Limited Liability Company.
9. Its social capital cannot be transferred without the consent of all the general partners and two-thirds of the arts of the limited partners: Limited Partnership.
10. There under a name and consists solely of partners whose liability is limited to payment of their actions: Corporation.

Corporations Recognized by Mexican Law

Write the names of corporations species recognized by the General Law of Corporations:

General Partnership, Simple Limited Partnership, Limited Liability Company, Corporation, Limited by Shares, Cooperative Societies.

Data Included in the Charter of a Society

Write the data to be included in the charter of a society:

1. The names, nationalities, and addresses of persons or entities that constitute society.
2. The purpose of the corporation.
3. The name or designation.
4. The duration.
5. The amount of social capital.
6. The expression of what each partner contributes in cash or other assets.
7. The domicile of the corporation.
8. The manner according to which society has to be given and powers of directors.
9. The appointment of directors and the appointment of those who will lead the firm name.
10. The way to make the distribution of profits and losses among members of society.
11. The amount of the reserve fund.
12. The cases in which the company may be dissolved in advance.
13. The basis for the liquidation of the company.

Responsibility in Limited Partnerships

Mentions what responsibility does any person other than the limited partnership to make appear or allow your name on social grounds:

Liable for operations up to the amount of the mayor of contributions.

Issues Addressed in a Special Meeting

Mentions what issues are addressed in a special meeting:

1. Extension of the duration of the company.
2. Early dissolution of the society.
3. Increase or reduction of capital.
4. Change order of society.
5. Change of nationality of the corporation.
6. Transformation of society.
7. Merger with another company.
8. Issuance of preference shares.
9. Redemption by the company of its own shares and issuance of shares of enjoyment.
10. Issuance of bonds.
11. Any other modification of the social contract.
12. The other matter for the law or the articles of incorporation require a quorum.

Reasons for Dissolution of Companies

Enter the reasons why companies are dissolved:

1. Expiry of the deadline set in the social contract.
2. Inability to continue with the aim of the company or because you have accomplished this.
3. By agreement of the members taken in accordance with the social contract and the law.
4. The number of shareholders falls below the minimum established by law or by the parties of interest together in one person.
5. The loss of two-thirds of social capital.