INTRODUCTION
On March 14, 2016, a Decree by which the General Law of Commercial Companies is amended was published in the Federal Official Gazette. This amendment created a new type of company, the Simplified Stock Company (Sociedad por Acciones Simplificada), which is designed to encourage the formation of micro and small businesses.
Specifically, the purposes of the amendments are to promote the adoption of corporate formalities by Mexican businesses and to create jobs by introducing a type of commercial company that may be formed without the need to appear before a notary public.
ELECTRONIC SYSTEM
The amendments provide for the establishment of an electronic system to be administered by the Ministry of Economy through which Simplified Stock Companies may be formed online and free of charge in less than 24 hours.
The amendments also provide that any change in the company's management or corporate purpose or any other change that would require the formalization of the minutes of a shareholders meeting before a notary public may be made through this system.
CHARACTERISTICS
A Simplified Stock Company may be formed by one or more shareholders who are individuals, without a minimum capital requirement.
This type of company is designed for businesses with annual revenues of up to $5 million pesos. If such amount is exceeded, the Simplified Stock Company must be transformed into another type of commercial company.
Appearance before a notary public will be optional, since the online procedures to be completed through the Ministry of Economy will be legally valid for all purposes and will include registration of the company in the Public Registry of Commerce (Registro Público del Comercio).
In order to use the Ministry of Economy's electronic system, individuals will be required to have an Advanced Electronic Signature (Firma Electrónica Avanzada or "FIEL") for identification purposes.
REQUIREMENTS
A Simplified Stock Company may have a single shareholder, but all shareholders must be individuals. Also, it is not possible to issue different types of shares distinguishing rights between shareholders.
Authorization to use the Simplified Stock Company's corporate name must be obtained from the Ministry of Economy.
The shareholders of a Simplified Stock Company may not be shareholders of any other type of commercial company.
The shareholders of a Simplified Stock Company are required to have an Advanced Electronic Signature.
One of the forms of corporate by-laws to be made available on the Ministry of Economy's electronic system must be used.
The company must be registered in the Public Registry of Commerce (Registro Público del Comercio).
The administrator of the company must publish in the electronic system of the Ministry of Economy the yearly report related to the financial status of the company. If the administrator fails to do so for two years in a row, the company would be dissolved.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
