ILN: ESTABLISHING A BUSINESS ENTITY: AN INTERNATIONAL GUIDE

[ESTABLISHING A BUSINESS ENTITY IN MEXICO] 337

voting rights (including limited or restricted) will have the right to: (1) appoint a member to the board of directors; (2) appoint an examiner (unless they elected to adopt the applicable regime of Public Companies); and (3) request the president of the board or an examiner to call a shareholders´ meeting or to adjourn any shareholders´ meeting in the event that they consider that they are not well informed with respect to a specific matter of the agenda. Shareholders representing fifteen percent (15%) or more 28 of the shares representing the capital stock with voting rights (including limited or restricted) or without voting rights of a SAPI, may file a civil liability action in court against the directors or the examiners in the benefit of the corporation pursuant to the terms of the LGSM 29 . Shareholders representing ten percent (10%) of the shares representing the capital stock are entitled to request the board of

directors, or the examiner, to summon a general shareholders’ meeting to discuss about the matters on which they have voting right. Shareholders may judicially oppose to the shareholders’ meetings’ resolutions when they have a voting right in the corresponding matter, provided that, they individually or jointly hold twenty percent (20%) or more of the capital stock of the SAPI 30 .

(iii) Acquisition of its Own Shares

Another right (or exception) granted to SAPIs by the LMV is the possibility for these corporations to acquire its own shares 31 , with the prior agreement of their board of directors, in which case, such shares may be acquired by the SAPI itself either through its (i) net worth ( capital contable ), in which case such repurchased shares shall be kept by the SAPI without the need to reduce its capital stock or (ii) capital stock ( capital social ), as long as it is resolved to cancel them, or to convert them into issued and unsubscribed shares ( acciones emitidas no suscritas ) kept as “treasury shares”. The placement of SAPI’s own shares will not require a resolution from the shareholders’ meeting;

28 In such case, the percentage established in the LGSM is 25%. 29 The LGSM states that shareholders representing 25% of the capital stock, may file a civil liability action in court against the board members, only if the complaint comprises the total amount of liability against the company and not just those of the personal interest for the plaintiffs, as well as evidence that they did not vote in favour of not prosecute the board members, in the relevant shareholders ’ meeting.

30 In such case, the 25% established by article 201 of the LGSM, will not be applicable. 31 Again, this is an exception to the provisions of the LGSM, which states an express prohibition for an SA to acquire its own shares.

ILN Corporate Group – Establishing a Business Entity Series

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