Mexican Company Registration
Mexico Key points
- Time – 2-3 weeks to incorporate your company
- Directors – only one director of any nationality, is necessary for your company
- Shareholders – two shareholder of any nationality, are required
- Share Capital – the share capital requirement is only €3,080
- Support – using our 20 years experience we guide you throughout every step of the company formation process
The most common forms of Corporation chosen by foreign investors in Mexico are:
- Corporations – Sociedad Anonima or SA.
- Variable Capital Corporations – Sociedad Anonima de Capital Variable S.A. de C.V.
Main characteristics of each Corporation:
Limited Liability Stock Corporation – Sociedad Anónima – S.A.
A Sociedad Anónima must have at least two of 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 key features of both are:
- The shareholder’s liability is limited to their stock interest in the company
- The directors are fully liable for the administration of the company
- 20% of share capital must be paid at the time of incorporation
- The tax rate will be the normal corporate tax rate
- The shares which represent the capital stock of the company are freely transferable
Sociedad Anónima – S.A. – Corporation
- This form of organisation is one of the most common used by foreign investors
- The capital stock is divided into shares and the shareholders are liable only to the extent of their contributions
- This corporation may exist under any kind of name, followed by the words, Sociedad Anónima, or the abbreviation S.A.
- It must be incorporated by at least 2 shareholders, a minimum capital investment of $50,000 pesos, and at least one share of stock should be purchased by each shareholder
- The Corporations constitution will be a public document
- The Corporations’ capital is represented by stocks
- The stocks will have equal value and will confer equal right s – Each stock gives the right to one vote in the decisions made by the assembly
- The distribution of profits and capital will be made in proportion to the value of each stock
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, but if two or more administrators are appointed an Administrative Board will exist, which may include a President and Counselors if necessary.
Managers will have inherent responsibilities and obligations that laws and bylaws impose.
Supervision of the corporation
The supervision of a corporation will be managed by one or several temporary and revocable delegates, who may or may not be associates.
The rights and obligations of the delegates are; to demand from the administrators monthly information which includes at least a financial statement and balance sheet; to examine the documentation, operations, and records, and to prepare on an annual basis a report to the general shareholders assembly on the overall status of the information presented by the Administration Board; to call special assemblies in the event of omissions by the managers.
The delegates will be individually responsible for the fulfillment of obligations that laws and bylaws impose.
The delegates will be responsible for the arrangements concerning the duration of their position, obligations of granting guarantees, the granting of powers, and responsibilities of the functions imposed by Administrators.
The Corporation will present at the shareholders annual assembly a report that includes:
- The current situation of the company, as well as the policies followed, and existing projects
- The statement and explanation of the principal policies, information, and criteria followed in the making of financial decisions
- A statement that shows the current financial situation
- A statement that explains and classifies the results of the corporation during the period
- A statement showing the changes in the financial situation
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:
- Approve/modify the annual report of administrators and delegates
- Elect an administrator or administration board and delegates
Extraordinary assemblies are those which deal with the following:
- Increase or reduce the organisations capital
- Extension of the continuance of the organisation
- Anticipated dissolution of the organisation
- Merger with other companies
- Any other modification of the organisations contract
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. If they refuse, the judicial authority will achieve the wishes of the associates.
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.
Unless, in the bylaws there is a greater number of the shareholders required, the extraordinary assemblies should be represented by three-quarters of the capital of the organisation, and the resolutions must be approved by vote of the shareholders who represent half of the corporate capital.
Sociedad Anonima de Capital Variable – S.A. de C.V. – Variable Capital Corporation
The S.A. and the S.A. de C.V. differ in a meaningful aspect. The maximum capital amount for a S.A. is fixed and specified in the articles of incorporation and by the corporations laws. 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..
Sociedad de Responsabilidad Limitada – S. de R.L. – Limited Liability Partnership
The S. de R.L. creates a company of limited responsibility similar to an S.A. The responsibility is limited to the investment of the shareholders. However, there is a maximum limit of shareholders which should not be more than 50. This type of organisation requires a smaller capital investment, which is divided into participation units instead of stocks. There are no restrictions in the changing of associates, as long as the associates that represent the majority of the capital agree. This organisation is currently used by more foreign investors than by Mexican investors. The main reason for this is the flexibility in the managing of bylaws and the possibility of using the S. de R.L. for fiscal matters in the USA. This creates an organisation that has limited responsibility and pays taxes as a Mexican corporation, but is considered a partnership in the USA.
Limited Liability Company – Sociedad de Responsabilidad Limitada, S.R.L.
A sociedad de responsabilidad limitada is similar to a limited company in the United Kingdom.
- The minimum capital is only $3,000.00 pesos – 50% must be paid at the time of incorporation
- Minimum of 2 shareholders required, maximum of 50
- The shares in the company must not be freely transferable and cannot be traded publicly