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)
to disclosure obligations, corporate governance and investor protection. In contrast, in a S.A.P.I., share - holders’ agreements commonly include additional mechanisms for the protection and enforcement of shareholders’ rights. 4.5 Shareholders in Publicly Traded Companies Disclosure Obligations In the case of publicly traded companies (S.A.B.), there are significant disclosure obligations applica - ble both to the company and to certain shareholders, particularly those acquiring or exceeding substantial shareholdings. As a general rule, such obligations are triggered when specific ownership thresholds are reached or exceeded (such as 5% or 10% of the share capital), as well as upon material changes in such holdings. In these cases, shareholders must notify the issuer and the market of the relevant acquisition or disposal, in accordance with applicable regulations, in order to ensure transparency and protect the invest - ing public. In this regard, significant shareholders, members of the board of directors and senior management are subject to additional obligations concerning the dis - closure of transactions involving the issuer’s securi - ties, as well as restrictions relating to the use of inside information. These obligations fall under the securities regulatory regime and are supervised by the National Banking and Securities Commission. Ultimate beneficial owner disclosure requirements Furthermore, with respect to the ultimate beneficial owner (UBO), Mexican law has incorporated specific identification and disclosure requirements, particular - ly through tax provisions and anti-money laundering regulations. In this context, companies are required to identify and maintain updated information regarding the natural persons who ultimately, whether directly or indirectly, exercise control over or benefit from the entity, in accordance with the Federal Tax Code and the Federal Law for the Prevention and Identification of Transactions with Illicit Resources ( Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita ).
These obligations entail the maintenance of corporate and supporting documentation, as well as the disclo - sure of such information to the competent authorities when required. While such information is not neces - sarily public, compliance is mandatory and forms part of the regulatory framework aimed at enhancing cor - porate transparency and preventing the use of opaque structures. In the case of publicly traded companies (S.A.B.), although there is no public register of UBOs in the strict sense, the disclosure regime allows for the identification of significant shareholders and, in cer - tain cases, the individuals who exercise control. This framework is complemented by regulatory and tax obligations that strengthen the traceability of owner - ship and corporate control. 5. Corporate Reporting and Disclosures 5.1 Financial Reporting Requirements Pursuant to the L.G.S.M., Mexican companies are obliged to approve their financial statements on an annual basis, in the first four months following the closing of a specific fiscal year (ie, by April). Certain companies, such as an S.A. or S.A.P.I., specify in their by-laws the obligation to hire an external auditor to certify their financial statements, however this is not mandatory for all companies. Article 32-A of the Federal Tax Code sets the obliga - tion to certify financial statements by external auditor to: (i) companies which, in the immediately preceding fiscal year, have declared in their normal tax returns cumulative income (for income tax purposes) equal to or higher than an amount of MXN1,940,178,120; as well as those that (ii) in the previous fiscal year have shares placed among the general investing public, on the stock exchange (such as an S.A.B.). Furthermore, according to Foreign Investment Law, Mexican companies with foreign investment are obliged to register (the company) before the National Registry of Foreign Investments and they have the obligation to file quarterly reports when a company changes its corporate name and/or corporate pur -
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