Mexico - types of companies for foreign investments
There are practically 3 most common types of companies that can be established in Mexico:
1. Corporation (Sociedad Anonima - S.A. or Sociedad Anonima de Capital) Variable - S.A. de C.V.; depending on the type of capital)
2. Limited Liability Company (Sociedad de Responsabilidad Limitada - S. de R. L. or Sociedad de Responsabilidad Limitada de Capital Variable - S. de R. L. de C.V.; depending on the type of capital
3. Partnership - (Sociedad de Nombre Colectivo or Socied de Nombre Colectivo deCapital Variable; depending on the type of capital)
The least common type of organization is Partnership due to the simple fact that such organization DO NOT provide limited liability, where establishing a company as Corporation DO provide limited liability and some tax benefits.
Corporations and Limited Liability Companies are definitely the most commonly registered organizations. Among them the most common is Sociedad Anonima de Capital Variable (S.A. de C.V.).
1. Corporation
* Requirements
i. Fixed capital stock fully subscribed
ii. Minimum fixed capital stock of 50 000 MXN
iii. Minimum 20% of fixed capital has to be paid in cash
iv. Minimum number of shareholders - 2
* Management
i. There can be 1 Administrator or a Management Board constituted of at least of 2 Directors
ii. The company is legally represented by Administrator or Management Board
iii. Appointing Administrator and Management Board is done by holding a Shareholders Assembly
iv. Shareholders can appoint a Statutory Examiner whose tasks will be supervising management operations for their benefits
v. The Shareholders Assembly has to be hold at least once a year in order to review, report and approve management issues and financial status for each year and has to be held before April 30 of the next year the management and financial reports correspond
* The difference between S.A. and S.A. de C.V.
i. S.A. - maximum of capital stock is fixed; In a case if shareholders want to increase the capital, it is required by law to amend documents like company status;
ii. S.A. de C.V. - the minimum of capital stock is fixed and the variable capital stock is opened and can be increased simply by holding Extraordinary Assembly of Shareholders; Establishing S.A. de C.V. gives more financial flexibility to investors with less legal work and shorter time;
2. Limited Liability Company
* Requirements
i. Fixed capital stock fully subscribed
ii. Minimum fixed capital stock of 3 000 MXN
iii. Minimum 50% of fixed capital has to be fully paid
iv. The capital is divided in equity quotas among which are established by law
v. Minimum number of 2 members
vi. Maximum of 50 members
* Management
i. There can be 1 or more Managers (Board of Managers)
ii. Managers can be freely added or removed from the company by decision of company members
iii. The company is legally represented by Sole Manager or Board of Managers
iv. The Shareholders Assembly has to be hold at least once a year any time during the year
* The difference between S. de R.I. and S. de R.I. de C.V.
i. S. de R.I. - maximum of capital stock is fixed; In a case if members want to increase the capital, it is required by law to amend documents like company status;
ii. S. de R.I. de C.V. - the minimum of capital stock is fixed and the variable capital stock is opened and can be increased simply by holding Extraordinary Assembly; Establishing S. de R.I. de C.V. gives more financial flexibility to investors with less legal work and shorter time;
