MEXICO Law and Practice Contributed by: Allan Kaye Trueba, Mariana Santillán Trejo and Rebeca Sanchez, Aziz & Kaye Abogados, S.C.
held, such as calling meetings, delaying votes, or exercising a liability action against the com - pany’s management. 5.3 Shareholder Meetings The general shareholders’ meeting is the most important corporate body of a corporation. It may approve and ratify all acts and operations of the company, and its resolutions are carried out by the person specifically appointed for such purposes or, where there is no designation, by the sole manager or the board of directors. Meetings must be held in the company’s corpo - rate domicile, which is a territory (usually a city) indicated in the by-laws. They can take place remotely if the by-laws allow. The by-laws may also allow the adoption of resolutions outside a meeting if approved by a unanimous vote of the shareholders represent - ing all the voting shares, provided that they are confirmed in writing. Shareholders’ meetings of corporations are divided into ordinary and extraordinary meet - ings. Ordinary meetings solve any matter not reserved for an extraordinary meeting. While an ordinary meeting can be convened at any time, the law mandates that such a meeting must be held at least once a year, within the first four months of each calendar year, to address any matter of the agenda in addition to: (i) approv - ing the annual report of the managing body; (ii) appointing or ratifying the appointment of the members of the managing and surveillance bod - ies; (iii) if applicable, approving the compensa - tion of directors and statutory auditors. Extraordinary meetings are held whenever required to resolve any of the following matters of the corporation:
• extension of duration; • early dissolution; • increase or reduction of capital stock (chang - es to the variable portion of the capital are usually approved in an ordinary meeting); • change of corporate purpose; • change of nationality; • transformation; • mergers; • issuance of preferred shares; • redemption by the corporation of its shares and issuance of beneficial shares ( acciones de goce ); • issuance of bonds; • any other amendment to the by-laws; and • any other matters for which the law or the by- laws require a special quorum. A corporation’s ordinary meeting is deemed to be legally convened when at least half of the capi - tal stock is represented in the meeting, and its resolutions are deemed valid when adopted by the majority of the votes present. In contrast, an extraordinary meeting is legally convened when at least 75% of the capital stock is represented, and its resolutions are valid when approved by shareholders at the meeting representing at least half of the capital stock. If it is not possible to convene the meeting on the date it was called (usually for lack of quorum), a second meeting will be called and the items on the agenda resolved irrespective of the num - ber of shares represented on the understand - ing that extraordinary meetings always need to be approved by shareholders at the meeting representing at least half of the capital stock to approve an item. Companies’ by-laws may set higher percent - ages for either type of meeting to be deemed legally convened and to adopt resolutions.
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