Types of Companies

Mexican Rules

Staff Report

    Foreigners have the option to establish a Mexican company or to acquire stock in one already established, it all depends on the party’s need to have a presence and an involvement in Mexico from a commercial and/or a tax point of view. The basic procedures related to the organization of a new Mexican company with 100 percent of foreign capital participation are as follows:

    Sociedad Anónima (S.A.). It is usually recommended to incorporate a limited liability stock corporation, which may adopt the form of a fixed capital company or that of a variable capital company (S.A. de C. V.). The principal difference between the two is that the latter may increase or decrease its capital within the limits established in the by-laws by a stockholders’ meeting resolution without the need to fulfill the formalities applicable to the S.A. Nevertheless, both types of companies must notify the National Registry of Foreign Investments and other applicable Government Agencies of any capital amendment.

Key characteristics of both types of companies include:

            •The shareholder’s liability is limited to its stock interest in the company and the directors are fully liable for the loyal and ...

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