MEXICO Trends and Developments Contributed by: Gabriela Pellón, Cecilia Díaz-de-Rivera, Fabiola Jiménez and Lucía Ibáñez, Galicia Abogados
Sociedades Mercantiles ) recognises it as the supreme body of a sociedad anónima and grants the share - holders considerable flexibility to regulate, in the com - pany’s by-laws, highly relevant issues such as voting arrangements, share transfer restrictions, issuance of different series of shares with special rights attached to each, withdrawal or separation mechanisms, and deadlock mechanisms. This flexibility makes the by- laws a critical governance instrument, particularly when coordinated with a shareholders’ agreement and a family protocol. Shareholders’ agreements are equally important. Mexican law expressly permits shareholders of socie- dades anónimas to enter into agreements regulating share purchase or sale options, arrangements relating to the transfer of shares, voting agreements and oth - er analogous provisions. In a family business, these agreements can translate into preferential rights, lock- up periods, information rights, transfer restrictions, tag-along and drag-along rights, deadlock proce - dures, conflicts-of-interest and no-competition provi - sions, as well as mechanisms for managing strategic disagreement. Mexican fideicomisos can add a further layer of flex - ibility, particularly where the family seeks to separate legal title, economic benefits and voting control. Fide- icomisos are contracts whereby a person or persons (settlors) transfer certain rights and/or assets to a trus - tee (generally, a licensed bank) for a specified pur - pose. In practice, trusts can hold shares and other assets, consolidate voting, regulate distributions, establish technical committees, implement succes - sion arrangements and provide continuity in the event of death, incapacity or family disagreement. Fideicomisos are especially useful where multiple shares or assets owned by different family members are intended to be consolidated to prevent owner - ship dilution. It is even possible to create a structure of connected fideicomisos that allow decisions to be taken at different levels to ensure control, while allow - ing different individuals to set particular rules, such as distribution rules, that apply only to their immediate family members. This tool is especially useful when the family wants to preserve a degree of common gov -
ernance while allowing economic separation among branches. Another key feature of fideicomisos (specially in com - plex family structures) is the possibility of establish - ing technical committees. A well-designed committee – composed of family representatives, independent advisers or professionals with financial, legal or opera - tional expertise – can ensure objectivity in decisions that should not depend solely on emotional family dynamics. The key, however, lies in the drafting: the committee’s powers, voting rules and limitations must be carefully designed and aligned with the attributions of corporate bodies (such as board of directors or board committees) to avoid uncertainty or future dis - putes. Professionalisation also requires the family to face a sensitive truth: not every family member should nec - essarily work in the business, and not every leader- ship position should be reserved for relatives. A fam - ily enterprise can preserve its identity while adopting objective criteria for management roles – including job descriptions, market-based compensation, per - formance reviews, educational requirements, exter - nal work experience and independent evaluation for senior positions. This is where the work of a private wealth and corpo - rate governance team becomes especially relevant. When advising family businesses, many governance problems are not caused by the absence of legal tools, but by the lack of communication between them. Families often want a protocol, a fideicomiso or a shareholders’ agreement before defining what the business needs, what the owners expect and what the next generation wants. The most effective structures are built only after the family has clarified its diagnosis. Corporate restructuring may therefore be a necessary step before – or alongside – governance reform. Many family businesses grow through layers of operating companies, real estate entities, holding companies, loans, guarantees and informal arrangements among related parties. Over time, the structure may no longer reflect the group’s economic reality or the family’s suc - cession objectives. A well-planned reorganisation can separate operating risk from passive assets, isolate
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