Which types of corporate entities are most commonly used in Mexico, and what are the key structural similarities and distinctions between them?
In Mexico, the two most commonly used types of commercial companies are the limited liability company and the stock corporation. In both types, partners are liable for company debts only up to the amount of their contributions or shares, respectively. This limited liability is one of the main reasons why partners and investors choose these […]
Mexico Sets Business Precedent on International Multimodal Transport Liability
A federal court in Mexico has issued a public ruling on an international multimodal transport contract and on the liability of the logistics operator. A Mexican company, in its capacity as shipper (the entity that hands over the goods to the carrier or operator), entered into an international multimodal transport contract for goods (carriage of […]
SUPREME COURT HALTS UNILATERAL TERMINATIONS OF COMMERCIAL AGREEMENTS WITHOUT LEGITIMATE CAUSE.
What did the case reviewed by the Court consist of? In a recent ruling, the First Chamber of Mexico’s Supreme Court of Justice (the Court) examined whether it is legitimate for one of the parties in a contract to conclude or terminate it unilaterally and without any justification. Although the matter examined by the Court […]
Usury and Exploitation in Contracts: New Perspectives of the Supreme Court of Mexico
The execution of an agreement is an activity we frequently engage in. Whether we are aware of it or not, we regularly enter into contracts of carriage, purchase and sale agreements, and even lease and loan agreements, among others. Regardless of whether the parties to an agreement are obligated to comply with the terms they […]
When 99% Isn’t 100: The Limits of Majority Shareholder Power in Mexico
In a recent case, a decision of a Mexican court was made public [1], which brings us back to the topic of whether, in all cases, the majority shareholder in a business company will necessarily have absolute control over its decisions. That is to say, if one or more shareholders own the majority of the shares […]
Piercing the Corporate Veil: Identifying the Real Actors Behind Commercial Entities in Mexico
In a press release, the First Chamber of the Supreme Court of Justice of Mexico confirmed that piercing the corporate veil of a corporate entity will not be permitted when requested as a precautionary remedy. [1] This sheds light on the limitations surrounding requests for such a remedy. What Does the Corporate Veil of a Company Entail? […]
Is your company over-regulating its decisions? A practical lesson to protect your investment
Background A notary public formalized the minutes of an extraordinary meeting in which a company granted a power-of-attorney to an individual. A shareholder of said company filed a complaint against the notary for intervening in that formalization. As a consequence, the notary was suspended for three months for not having registered the deed in the […]
The Importance of Formality in the Powers-of-attorney in Mexico: Lessons from a Judicial Case
Any power-of-attorney granted and formalized before a notary public is valid. Of course! How could it not be? If it has the notary’s seal and signature. Moreover, the document clearly reflects both the corporate name of the company granting the powers-of-attorney and the name of the attorney-in-fact. Both, as they appear in the current bylaws […]
Digital Transformation of Negotiable Instruments in Mexico: What You Need to Know
On March 26, 2024, a decree was published in the Mexico’s Federal Official Gazette that amends the General Negotiable Instruments and Credit Operations Law (“LGTOC”), as well as the Law on Organizations and Auxiliary Credit Activities (“LOAAC”), with the purpose of regulating the granting of certificates of deposit issued electronically by Public Bonded Warehouses. What […]
Court issues ruling on the legality of service of process carried out by a private courier in the United States
The First Chamber of the Supreme Court of Justice of Mexico heard a case in which one person sued another who resides in the State of California, United States of America. The initiated trial was of a commercial nature. The judge ordered the summons to the defendant through a rogatory letter without specifying that it […]
International Civil Aviation Organization removes Mexican Civil Aviation from operational safety alert
On June 10th, 2024, the Federal Civil Aviation Agency (AFAC) issued a statement announcing that the International Civil Aviation Organization (ICAO) had removed Mexico’s civil aviation from an operational safety alert called “Significant Safety Concern,” as it was confirmed that all observations made during the audit conducted by AFAC were met at 100%. This alert […]
Mexico’s Competition Commission Fines Six Companies for Concentration Failures
Mexico’s Competition Commission (the Commission) fined six companies -more than 58 million pesos- dedicated to the sale of gasoline and diesel to consumers for failure to notify two concentrations to the Commission. According to the Mexican law a concentration occurs when entities, shares of stock, partnership interests, trusts or assets are combined by means of […]