[ESTABLISHING A BUSINESS ENTITY IN MEXICO] 338
however, the board of directors shall adopt the relevant resolutions. The SAPI’s issued and unsubscribed shares kept as “treasury shares” may be subscribed to by the same shareholders, in which case, the preemptive right established by the LGSM will not be applicable. Furthermore, SAPIs are not required to publish their financial statements pursuant to the LGSM 32 . We can conclude that SAPI’s may be an adequate vehicle when there is a joint venture investment with another investor (either foreigner or national). When foreign investors need a “wholly own subsidiary” we would definitely recommend the incorporation of an SA.
different functions as notary publics in common law countries), either Notarios Públicos (authorized by local governments) or Corredores Públicos (authorized by federal authorities) to carry out public certification of legal acts (“ Public Faith Officers ”). The participation of such Public Faith Officers in the incorporation process plays a very important role. They are professionals (in both cases, must be lawyers) that are granted “public faith authority” ( fe pública ) by the government with the function to certify legal acts. Generally, the participation of such Public Faith Officers is to formalize the consent of the shareholders or partners of the company and therefore, such shareholders or partners (or their representatives) must appear before them to execute the relevant incorporation documents. The process for incorporating a company in Mexico would need to follow the following steps: 1. To obtain from the Mexican Ministry of Economy ( Secretaría de Economía ) (“ SE ”) a permit to use the corporate name of the company (usually 3 – 5 business days), provided that there are words/names that require authorization from the competent authorities that regulate the activity related to the requested word/name (e.g., the use of the word “Investment” requires the authorization of the SHCP); 2. To draft the by-laws of the company (based on the provisions of the LGSM or LMV and/or any shareholders agreement or other kind of agreement when different groups of shareholders
III.
Incorporation Process The incorporation process of a Mexican commercial entity is quite unique and may not be compared with the incorporation process followed in common law countries. We can say that the incorporation process, once all of the required documents are properly prepared and delivered, may take from five business days up to fifteen business days in order to have the business entity ready to start doing business in Mexico. Due to our civil legal system, the participation of state appointed officers is required (with the same name but
32 The LGSM states that the SA shall publish their annual financial statements in the electronic system set forth by the SE per request of the shareholders.
ILN Corporate Group – Establishing a Business Entity Series
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