MEXICO Law and Practice Contributed by: Fernando Hernández G., Elvia Ríos Saldaña, Ana Karen Inzunza Sánchez and Luis Andrés Estrada Intriago, Vázquez Aldana, Hernández Gómez & Associates (VAHG)
the main bodies (shareholders, management and sur - veillance) in operational matters. 2.3 Decision-Making Processes In Mexico, the decision-making process in companies is governed by the General Commercial Corporations Act. There are two main bodies which take resolu - tions: (i) the shareholders’ meeting; and (ii) the board of directors. The following is a simplified summary of how they operate. Shareholders’/Partners’ Meeting This is the “supreme authority” of the company. This is where the shareholders/partners meet to make the most relevant decisions. To take the decisions, two steps are involved: The call (convocatoria) This must be published through the electronic system of the Ministry of Economy. This must be done with the anticipation set in the company’s by-laws (usually within 8–15 days). This must include the agenda, which is the list of top - ics to be discussed. Decisions made on topics not listed are generally invalid. The meeting Generally, there are two types of meetings: • ordinary – held at least once a year to approve financial reports and appoint directors; and • extraordinary – held any time to discuss critical changes to the company such as capital increases or decreases; changing the corporate name, domi - cile or purpose; approving acquisitions of assets or shares; approving mergers or anticipated dissolu - tions. Once the above-mentioned steps are fulfilled, the res - olutions are prepared. These are the hard copy includ - ing the final agreements taken by the shareholders. To be valid, they require a specific quorum (a minimum percentage of shares present) and a majority vote; in general, the quorum for ordinary meetings is 51% of
votes, while for extraordinary meetings it is 75% of votes. Lastly, in some cases, resolutions can be taken via a written document in lieu of a meeting, if the by-laws allow this and the written document is signed unani - mously by the shareholders/partners. Board of Directors/Managers The board of directors/managers is in charge of the daily management and execution of strategy. It there - fore meets more frequently than the board of share- holders/partners, which meets only occasionally. For the board of directors/managers to take decisions, two steps are involved: The call This is usually done via email or letter by the chair - man or secretary of the board, following the rules set in the by-laws. Resolutions Decisions are taken by a majority vote of the directors present. The chairman often has a “casting vote” ( voto de calidad ) in the case of a tie. In some cases, resolutions can be taken via a written document in lieu of a session, if the by-laws allow this and the written document is signed unanimously. The board of directors of a business corporation is governed by the L.G.S.M., as well as by the provisions set forth in the company’s by-laws. In the case of corporations (S.A. or S.A.P.I.) the board of directors is a collegiate body, the composition, organisation and operation of which are determined in the by-laws, with no statutory maximum number of members/directors established by law. In practice, the board is typically composed of at least three members and is generally headed by a chairper - son who presides over and co-ordinates the meetings. 3. Directors and Officers 3.1 Board Structure
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