MEXICO Law and Practice Contributed by: Allan Kaye Trueba, Rebeca Sánchez and Mariana Santillán, Aziz & Kaye Business Law
The company’s by-laws may provide for the crea - tion of committees to aid the board in its functions; however, the board’s authority may not be delegated. Specific rules apply to the operation of the board in publicly listed companies. Likewise, appointment as a director is personal and may not be delegated or executed by proxy. 7.3 Conflicts of Interest For corporate JVs, Mexican law requires board direc - tors to disclose conflicts of interest and abstain from voting on affected matters, with personal liability for company damages if violated. This duty of loyalty applies to both private and publicly listed companies. Directors must disclose potential conflicts upon appointment and abstain from voting on conflicted transactions. For public companies, conflicted direc - tors cannot participate in discussions and must be absent during deliberations, without affecting board quorum requirements. There are no statutory requirements for contractual JVs; however, conflict of interest is usually addressed in the transaction documents of the JV structure. In Mexico, there are no restrictions in place on being a member of the board of directors of a corporate JV and also holding a director’s position in a JV partici - pant. In any JV, the parties must carefully assess the intel - lectual property (IP) rights required for the project’s success. The approach to managing these rights can differ between a corporate JV and a contractual JV. In a corporate JV structure, the parties may opt to assign or license certain IP rights directly to the com - pany. Conversely, in a contractual JV, the execution of a licence agreement is more common as it allows the original rights holder to maintain ownership while granting usage rights to the JV. See 8.2 Licensing v Assignment of IP Rights . 8. IP and ESG 8.1 Ownership and Use of IP
A key factor in determining the IP strategy is the importance of using an established and reputable trade mark for the venture. Even when IP rights are not the most critical aspect of the project, it is stand - ard practice for the parties to clearly outline the use of their IP rights by the corporate JV or other JV mem - bers. This documentation typically clarifies that any authorised use does not constitute an assignment of rights. 8.2 Licensing v Assignment of IP Rights The decision between licensing and assigning IP rights is influenced by various factors, including the nature of the project, the significance of those rights to the venture, the long-term vision of the parties, and any existing or prospective contractual arrangements with third parties. IP rights assignment is more prevalent in corporate JVs, as the JV members retain influence over the use of such rights through their involvement in the com - pany. Additionally, transaction documents for corpo - rate JVs usually include mechanisms to prevent the unauthorised disposition of assets, including IP rights. Licensing of IP rights is common in both corporate JV and contractual JV structures when the rights holder intends to continue using the IP, or has licensed or plans to license the rights to other third parties. This approach allows the JV to use the IP as needed while maintaining the rights holder’s ability to leverage these assets in other contexts. By carefully considering and structuring the manage - ment of IP rights, JV partners can ensure that their intellectual assets are protected while still being effec - tively utilised to support the venture’s objectives. 8.3 ESG Considerations in JVs Mexico’s ESG evolution accelerated with the Decem - ber 2023 amendment to the Securities Market Law, empowering the Ministry of Finance to issue sustain - ability guidelines. This led to January 2025 amend - ments requiring securities issuers to prepare Sustain - ability Reports following IFRS S1 and S2 standards, starting in 2026 for 2025 data. Additionally, insurance and bonding institutions must now incorporate ESG
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