MEXICO Law and Practice Contributed by: Allan Kaye Trueba, Mariana Santillán Trejo and Rebeca Sanchez, Aziz & Kaye Abogados, S.C.
Shareholders may be represented in the gen - eral shareholders’ meetings by attorneys-in-fact. Such representation shall be conferred upon on the terms outlined in the by-laws or, where there is no provision, in writing. This special power of attorney is usually granted through a proxy letter ( carta poder ). Directors and statutory auditors are not permitted to represent shareholders in a shareholders’ meeting. If a corporation has multiple categories of shareholders, any proposal potentially affecting the rights of a specific category must first be approved by that affected category convened in a special meeting. Resolution by the spe - cial meeting requires the same majority that is required for the amendments of the by-laws of the corresponding company, and must consider the total number of shares within the affected category. Special meetings must adhere to most of the rules applicable to general meetings, such as the meeting being held at the corporate domi - cile (or remote attendance if allowed by the by- laws), procedures for calling the meeting, and representation of shareholders, among other requirements. 5.4 Shareholder Claims Under the General Law of Business Compa - nies, shareholders representing at least 25% of the capital stock are entitled to bring a lia - bility action against board members, provided certain requirements are met. Firstly, the claim must encompass the total amount of liabilities in favour of the corporation, rather than solely rep - resenting the personal interests of the plaintiffs. Additionally, if applicable, the plaintiffs must not have voted in favour of the resolution adopted by the general shareholders’ meeting that bars them from proceeding against the defendant
directors. Any assets obtained because of these actions will be received by the corporation. Under the Securities Market Law, liability actions in a publicly listed company may be initiated by the SAB or by the SAB’s shareholders that hold at least 5% of the capital stock represented by shares granting full voting rights, limited voting rights, or that have no voting rights. In this case, the action will only favour an SAB or, in certain cases, the company controlled by the SAB or in which the SAB has a significant influence, that suffers property damage. The ordinary statute of limitations in commer - cial matters is ten years. However, the statute of limitations is five years for any actions derived from the by-laws and any corporate transactions in connection with any rights and obligations between the corporation and the sharehold - ers (including any action among shareholders). The Securities Market Law expressly sets forth that an action for which accountability from the members of the board of directors is sought will be subject to a five-year statute of limitations, starting on the day on which the act or event causing the corresponding property damage occurred. The Mexican Supreme Court’s First Chamber recently confirmed that, under civil law, share - holders and partners may initiate individual actions against directors for acts or omissions that cause direct personal harm without the need to show damage to the company or comply with the requirements of other social actions, such as those set forth in the General Law of Business Companies. Please refer to 2.1 Hot Topics in Corporate Governance for further information.
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