In Mexico there are different types of commercial entities that can be incorporated. The Sociedad de Responsabilidad Limitada has fixed capital stock and the Sociedad de Responsabilidad Limitada de Capital Variable has a combination of both fixed and variable capital stock. The Sociedad de Responsabilidad Limitada de Capital Variable is more common since the variable part of the capital stock is allowed to be withdrawn with notice from the shareholders.
In order to incorporate a company in Mexico the incorporation documents are signed in a deed before a notary public it is a requirement that the partners and/or its legal representatives attend the notary public office in Mexico. If the partners are unable to attend it is possible to grant a power of attorney and instruct this person to sign in representation of the partner.
There may be additional fees for work the notary has to do in drafting the public deed and other procedures.
The most common forms of Corporation chosen by foreign investors in Mexico are:
Main characteristics of each corporation:
A Sociedad Anónima must have at least two shareholders. The minimum fixed capital needed to establish a Sociedad Anónima is $50,000 pesos.
For the option of variable capital, an S.A. de C.V. can be established with both fixed and variable portions of capital as long as the total never falls below $50,000 pesos.
The maximum capital amount for a S.A. is fixed and specified in the articles of incorporation. Any subsequent increase or capital decrease requires modification of the public document or bylaws.
The public document and bylaws of a S.A. de C.V. show minimal capital and variable capital amounts that exceed the minimal capital. The variable capital can be unlimited, and with increases and decreases in capital it is not necessary to modify the public document or bylaws of the organisation. For this reason foreign investors, particularly those who possess their own subsidiaries, use the S.A. de C.V. figure instead of the S.A..
A sociedad de responsabilidad limitada is similar to a limited company in the United Kingdom.
You will need to select a company name which we will reserve for you at the Registration Office, they will check that no identical name or one that might lend to confusion is already registered.
Under Mexican Law, your company will have to enter a proforma agreement, whereby any non-Mexican shareholder shall be deemed to agree to be bound by Mexican laws and not invoke the diplomatic protection of his government.
We prepare these documents that spell out corporate governance, corporate purpose, duration of existence, domicile, capital stock provisions, management powers and special provisions for liquidation.
In addition, you will need to decide how capital will be subscribed, how the Board of Directors and officers will be appointed and what powers will be specifically granted to individuals.
The statutes must be taken along with the permit from the Registration Office to a notary (notario publico) to formalise the incorporation and takes around 3 weeks.
After the notary issues a notarial transcript, he usually handles registration with the Public Registry of Commerce (Registro Público de Comercio).
Immediately after incorporation, you must register the company with the Federal Taxpayer’s Registry (Registro Federal de Contribuyentes, RFC) at the Secretariat of Finance and Public Credit (Secretaría de Hacienda y Crédito Público, Hacienda).
Registration with the Foreign Investment Registry (Registro Nacional de Inversiones Extranjeras), who will need information about the shareholders, domicile and company directors.
The corresponding Chamber of Commerce or Industry for your business. Under Mexican law, every company must belong to one of these chambers.
The highest authority of this Corporation is the General Shareholders Assembly. The administration will be managed by one or several temporary and revocable executives, who may or may not be partners. If only one administrator is chosen, he will be designated as the General Manager, if two or more administrators are appointed an Administrative Board will exist, which may include a President and Counselors if necessary.
The general shareholders assembly is the supreme authority of the organisation. The assembly is responsible for the debate and ratification of all acts, operations, and resolutions. The chairperson, administrator, or administration board will fulfil the wishes of the assembly.
The assemblies will meet at least once a year, within four months following the end of the reporting period, and will address the following matters:
Extraordinary assemblies are those which deal with the following:
The assemblies will be able to meet at any time, summoned by the administrators, administration board, or delegates. However, the associates that represent at least thirty-three percent of the organisations capital may request, in writing to the managers, to call a general shareholders assembly.
In order to consider an ordinary assembly legally gathered, there must be at least half of the organisations capital represented by shareholders, and their resolutions will be valid when the majority of the participants approve them.
Mexico's General Corporations Act (Ley General de Sociedades Mercantiles) requests for a minimum of at least two shareholders to form any type of legal entity. Each initial shareholder or incorporator has to subscribe at least one stock certificate, and must appear before a Mexican Notary Public to sign the incorporation deed in the Notary's Protocol Book.
The incorporation deed (acta constitutive) will comprise both the articles of incorporation as well as the corporate bylaws, and will therefore provide specific regulation for governance of the company, management, profit distribution, shareholder voting and preference rights, etc.
The incorporation deed will necessarily have to provide for an immediate form of management: either a Sole Administrator (administrador nico) or a Board of Directors (Consejo de Administración) with a minimum of three people to act as President, Secretary and Treasurer. The incorporator may be able to fill these roles temporarily, or be appointed as a sole administrator instead.
The sociedad anónima requires for duly appointed Comptroller (comisario) which will permanently oversee and guarantee that all corporate duties are met during the course of life of the company.
A decision must also be made addressing which members of the Board of Directors will be the legal representatives of the corporation (normally at least the President is appointed as such). The legal representatives will then be granted a full power of attorney to act on behalf of the company, with the possibility of limiting such power of attorney for operations not to exceed a certain amount, or in regard to certain specific tasks (i.e. one may require the joint action of two of the representatives for some actions or for transactions of more than a certain amount).
A name must also be chosen and this must not be similar to any existing corporate name registered with the Ministry of Economy (Secretaría de Relaciones Exteriores). A corporate name search must be performed previously in order to verify that there is no similar name already registered and that the incorporation process will be granted.
Finally, the company capital must be determined at the time of incorporation, we suggest fifty thousand pesos as well as the number of shares of stock. Since individual shares cannot be divided, the number must be big enough to allow for any transfer or distribution of shares you may encounter in the future.
To begin the incorporation process you will need the following information:
Obtaining a corporation incorporated in Mexico does not necessarily mean that the shareholders have to travel there - Shareholders have two options:
The incorporation process in general carries the following necessary steps:
Unfortunately, ready made companies are not available in Mexico.