New Judicial Decision in Mexico Forces Airlines to Reassess Check-In Protocols
The airline’s online check-in system fails. The passenger is unable to obtain their boarding pass. The passenger arrives at the airport two hours in advance instead of three, as required for international flights. The flight closes. Who should bear the consequences of such a situation: the airline or the passenger? The incident occurred in Mexico. […]
Closing the Gap: How to Avoid Costly Litigation in High-Stake Credit.
Some companies granting high-value credit rely on the fact that, by being secured through non-possessory pledges or guaranty trusts, they will face fewer difficulties in recovering their investment in the event of a debtor’s default. On the other hand, if the formal requirements mandated by law to establish such collateral are not met, creditors may […]
Cross-Border Contractual Shielding: Why foreign law does not secure immunity in Mexico.
Some companies with cross-border businesses still assume that by choosing foreign laws to govern agreements that have effects in Mexico, they will obtain greater legal certainty. This is because they assume that a Mexican judge will apply the agreement literally when the validity or scope of any of its clauses is challenged. However, that assumption […]
Subscribing for stock shares is not the same as paying for them: a consequence many companies in Mexico discover too late
A company admitted a new shareholder through a capital stock increase, received a promissory note as a guarantee for payment of the issued stock shares, and believed that with that it was in compliance. The Supreme Court of Mexico (the Court) confirmed that it was not. A capital stock increase is not merely an administrative […]
Irregular Share Capital Increases: A Corporate Governance Risk
Dilution and Loss of Control of the Shareholder A share capital increase may modify control of a company and directly affect the equity of its shareholders. What is relevant is that, many times, this occurs without the shareholder perceiving the problem until the transaction has already been formalized. Some shareholders of Mexican commercial companies are […]
The false certainty of choosing a foreign governing law in contracts with effects in Mexico.
When a company operates commercially in Mexico, the question often arises as to whether it is less risky to choose a governing law other than Mexican law for the interpretation of its contracts. This decision is usually based on an assumption that is not always correct: assuming that the choice of a foreign law guarantees […]
Compliance isn’t always enough: new reform and regulatory risks for online suppliers in Mexico
New obligations will be added for companies that sell products and provide services electronically in Mexico in 2026. These new obligations became mandatory on December 13 of last year, following the addition of a couple of sections to Article 76 bis of the Federal Consumer Protection Law (LFPC). As of the date mentioned, any supplier […]
What Aspects Should Be Considered Before Terminating a Commercial Agreement?
Nearly two years after the publication of the landmark case-law [1] decision of Mexico’s Supreme Court, which qualified the principle of free will in commercial matters, also known as freedom to contract, allowing the parties to freely agree upon the terms and conditions governing their contracts, we considered it timely to offer a few reflections […]
Payments by Check: A Silent Risk to Corporate Cash Flow
Does your company receive payments by check? If so, you may be exposed to a hidden risk that can freeze your cash flow without the debtor being subject to any sanction. A Federal Court has recently confirmed that a check remains legally valid even if the drawer’s (debtor’s) signature appears outside the designated signature space. […]
NEW UPDATE FACTOR APPLICABLE TO SIMPLIFIED STOCK COMPANIES
On December 26, an Official Notice was published in Mexico’s Federal Official Gazette announcing the adjustment factor applicable to the total annual gross revenues of a Simplified Stock Company (SAS), in accordance with the provisions of Article 260 of the General Business and Company Law (LGSM). Pursuant to such publication, the adjustment factor applicable for […]
Corporate spin-off: the decisive factor determining its viability
When shareholders, partners, or senior management of a company begin to assess the benefits and challenges of carrying out a spin-off of a company, a variety of questions often arise. Among them, whether the spin-off will meet the objectives set in terms of greater efficiency in the management and investment of resources, in the optimization […]
Civil Liability Risks and Core Duties of Directors in Mexican Companies
Directors of commercial corporations are regarded as their agents and legal representatives according to articles 10 and 142 of the Mexican General Corporations and Partnerships Law (“GCPL”), and have the authority necessary to perform all those activities listed in the company’s corporate purpose unless otherwise stated in the law or in the bylaws of a […]