MEXICO Law and Practice Contributed by: Luis Álvarez Cervantes, Adolfo Athié Cervantes, Alejandro Barrera, Jesús Colunga, Eduardo Kleinberg, Juan José López de Silanes, Carlos Martínez-Betanzos and Amílcar Peredo, Basham, Ringe y Correa S.C.
3.3 Ongoing Reporting and Disclosure Obligations Private companies in Mexico are subject to various reporting and disclosure obligations, including: • modifications to articles of incorporation – any amendments must be formalised through a notarial public deed and registered with the Public Registry of Commerce; • to the National RNIE: (a) quarterly updates – companies must file updates with the RNIE for significant changes; and (b) annual report – companies must submit a detailed report to the RNIE if their assets, li - abilities or revenues exceed MXN110 million. This report is mandatory and failure to comply results in penalties; • to the Secretariat of Economy: (a) reports on capital and shareholder changes; (b) notice of transfers and constitution of rights over shares; • beneficial owner (UBO) registration – Tax Authority: (a) notice of changes in shareholders; and • SHCP (Secretariat of Finance and Public Credit): (a) ultimate beneficiary registration. 3.4 Management Structures Management structures available in the most common legal entities are the following. One Individual In an SA, this person is called the sole administrator and in an S de RL, they are called the single manager. A single individual is appointed to manage and repre - sent the company. The sole administrator or manager has the authority granted by the incorporation deed and the law. This structure allows the individual to act independently, unless limitations are specified in the company’s by-laws. This structure is ideal for com - panies that require quick decision-making, greater control and a simplified structure. Board of Directors (SA) or Board of Managers (S de RL) In an SA or S de RL, the company is typically man - aged by two or more individuals who make decisions collectively as a board. If there are three or more
administrators, the by-laws will determine the rights of the minority in the appointment process. The minor - ity holding at least 25% of the share capital has the right to appoint one board member. This threshold is reduced to 10% for companies with shares listed on the Stock Exchange. This structure is better suited for larger companies where diverse perspectives, shared responsibility, and supervision are necessary. Typically, a minimum of three directors/managers are assigned. 3.5 Directors’, Officers’ and Shareholders’ Liability The General Law of Commercial Companies requires administrators to act in the best interests of the com - pany, ensuring proper management of financial and legal obligations, and protecting shareholder rights. Administrators are jointly responsible with the compa - ny for maintaining accurate financial records, ensur - ing compliance with legal requirements, and executing shareholder resolutions. If administrators are aware of any irregularities committed by previous administra - tors and fail to report them, they can be held liable for any resulting damages. The corporate veil protects the company’s assets and operations from external claims, separating the com - pany’s responsibilities from those of its shareholders. Administrators can also be held liable for favouring certain shareholders, gaining personal financial ben - efits or spreading false information. Shareholders can - not waive this responsibility through the company’s by-laws, but the company can take out insurance or bonds to cover potential indemnifications, excluding cases of fraud or bad-faith actions.
4. Employment Law 4.1 Nature of Applicable Regulations
Employment relationships in Mexico are governed by a comprehensive framework rooted in constitutional principles and developed through statutory law, reg - ulations, case law (jurisprudence) and other binding sources. This framework reflects Mexico’s strong tra - dition of labour protection and the public policy nature of labour law.
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