MEXICO Law and Practice Contributed by: Allan Kaye Trueba, Rebeca Sánchez and Mariana Santillán, Aziz & Kaye Business Law
9.2 Asset Redistribution and Transfers The transfer of assets between JV participants should be addressed in the shareholders’ or partners’ agree - ment or the corresponding contractual arrangement, taking special care to include the value or valuation procedure. For purposes of transfers, Mexican law does not dis - tinguish between assets that were originally contrib - uted to the JV by a participant and assets originating from the JV’s activities. In practice, the most relevant consideration, in the first case, should be how to replace or continue the legal use of the assets in question if needed by the trans - feror; for example, by means of a lease or a licence in favour of the transferor or the JV, as applicable. In the second case, the most straightforward way is to set the terms of any applicable transfer between JV participants in the JV documents. 9.3 Exit Strategy In a contractual JV, an exit typically results in the ter - mination of the agreement. For a corporate JV, plan - ning for the parties’ future separation usually requires designing provisions that address the valuation of each party’s holding and the acquisition of shares or equity interests. These may include put-and-call options or drag-along and tag-along clauses. Additional valuation and exit mechanisms may be necessary when assets are transferred to or acquired by the corporate JV. There are no statutory exit provisions for contractual joint ventures. However, in the case of a corporate JV, exits may be limited by the company’s by-laws and applicable law, particularly when member approval is required to transfer ownership interests, as is the case with limited liability companies. Private share transfer is the most common exit mech - anism for corporate JVs. Termination of the contract or assignment of rights and obligations are the typical exit mechanisms in contractual JVs.
criteria into investment decisions and asset manage - ment. These changes create both compliance obligations and strategic opportunities for joint ventures, which must: • embed ESG into contractual architecture through shareholders’ agreements and by-laws; • clearly allocate responsibility for permits, compli - ance, and KPIs; • implement periodic reporting aligned with investor and lender requirements; and • anticipate convergence with EU and US disclosure regimes for cross-border ventures. The Ministry of Finance’s Sustainable Taxonomy, while non-binding, increasingly influences lenders and regu - lators. JV structures should embed ESG covenants in funding instruments while balancing flexibility with detailed metrics, ensuring credible commitment alongside adaptability to evolving standards. 9. Exit Strategies and Termination 9.1 Termination of a JV The ways to terminate a JV, depending on whether it is a contractual JV or corporate JV, are mainly: • corporate JV – dissolution of the vehicle or transfer of the parties’ participation; and • contractual JV – termination or assignments of rights and obligations of the agreement. In any case, the main considerations should be liqui - dation of debt, distribution of profits, assets and loss - es, as well as tax consequences. It is also possible for a JV to be terminated with respect to only some of its parties, but the same considerations apply.
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