Comments

Among the most notable aspects are the following:

• The shareholders meetings, administrative bodies and/or sessions of the board of directors, as the case may be, may be held through the use of electronic, optical or any other technology (e. remotely) as long as they are established in the By-laws of the corresponding commercial legal entity and there are mechanisms or measures that allow access, accreditation of the identity of the attendees, the meaning of their vote and the corresponding evidence is generated.
• The meetings, as well as the sessions, may be carried out totally or partially through in-person or virtual attendance through the aforementioned means.
• It will not be understood that a meeting is held outside the respective corporate domicile when it is carried out through the use of electronic, optical or any other technology.
• In the case of Limited Liability Companies (LLC), the calls will be made by publishing a notice in the electronic system established by the Ministry of Economy and must include the agenda and the signature of the person issuing them.
• In accordance with the provisions set forth in the Commercial Code regarding the use of technologies, the minutes of the respective meetings may be signed with an electronic signature.

It should be noted that those commercial legal entities established prior to this amendment may incorporate into their By-laws the provisions that allow them to have the possibility of holding virtual meetings and sessions, as well as recognizing the use of electronic, optical, and other technologies in order to document the minutes and other related documents of the commercial legal entity.

The Decree will enter into force on October 23^rd, 2023, with the exception of the modifications to the second paragraph of article 81 of the GLCC regarding the LLC´s calls, which will enter into force on April 22^nd, 2024.

Due to the above, commercial legal entities will be authorized to validly hold the corresponding meetings and sessions remotely, as long as the participation is simultaneous, and interaction is allowed in the deliberations in the same way that would be carried out in a face-to-face meeting.

Recommendations

It is essential to take advantage of technology for legal purposes, in such a way that commercial legal entities must promptly carry out the pertinent modifications to their By-laws in order to include the corresponding rules for the use of electronic, optical or any other technology means. These modifications will provide greater agility and efficiency to commercial legal entities in the development of their corporate activities.

If you have any questions regarding the foregoing, please do not hesitate to contact us

Comments

Pursuant to the new obligation, the tax authorities will have specific verification powers to require information regarding the BCs and the compelled taxpayers will have to provide it within the next 15 business-day-term once the request is duly notified. The referred term may be extended to 10 more days as long as the corresponding extension request is duly justified. Likewise, the TAS may require the aforementioned information to Notaries Public and financial institutions.

Regarding the information requests, the TAS may rely in the public registers located in Mexico City and in other states, in the Financial Intelligence Unit of the Ministry of the Treasury and Public Credit, in the National Banking and Securities Commission, in the National Commission for the Pension System or in the National Bonding and Insurance Commission, through the conclusion of collaboration agreements, information exchange or in any other form the applicable provisions authorize.

CBs shall be understood as the individual or group of individuals that:

1. Directly or by means of other(s) individual(s) or of any legal act, obtain(s) the benefit that derives of their participation in a legal entity, a trust or any other legal figure or legal act, or those who ultimately exercise the rights for use, enjoyment, or disposal of a good or service or a transaction is performed on its behalf, even when the above is done contingently. 
2. Directly, indirectly, or contingently, exercise the control of the legal entity, trust, or any other legal figure. The exercise of control takes place when an individual or group of individuals, by means of shares’ ownership, an agreement, or any other legal act, may:
   • Directly or indirectly impose decisions in the general shareholders meetings, partners, or equivalent corporate bodies, or appoint or dismiss the majority of the counselors, administrators, or its equivalents. 
   • Maintain the ownership of the rights that allow the voting of more than the 15% of the share capital or good, either directly or indirectly.
   • Directly or indirectly lead the administration, strategy or principal policies of the legal entity, trust, or any other legal figure.

Regarding trusts, the settlor(s), fiduciary, trustee(s), and any other individual involved that ultimately exercise the effective control in the agreement, even when contingently performed, will be considered as CBs.

In case of committing an infringement deriving of the breach of the referred obligation, the penalties will vary from MXN $500,000.00 and MXN $2’000,000.00, as the case may be.

Finally, rules 2.8.1.20., 2.8.1.21. and 2.8.1.22. of the Miscellaneous Tax Resolution for 2022, states the criterion for the determination of the CB condition, as well as the mechanisms and parameters to identify, obtain and conserve the necessary information that must be included in the accounting records.

It is important to note that the incorporation of the CB figure for tax effects is the result from the Financial Action Task Force’s work and definition regarding the prevention of operations involving resources derived from illicit sources and terrorist funding. Consequently, such figure was introduced in the evaluations and agreements performed by the Global Forum on Transparency and Exchange of Information for Tax Purposes.

The several information that must be collected, conserved, and updated by the legal entities, trusts or any other legal figures in terms of this new obligation is too extensive; moreover, there will be complex cases where some type of legal secrecy could be arise. Consequently, this new obligation entails a considerable effort of corporate and legal control, and it will be essential for such legal entities, trusts and other legal figures to knows precisely their real and actual situation regarding the fulfillment of corporate obligations, and therefore its tax obligations.

Recommendations

It is of prime importance that all legal entities, trusts or other legal figures have the corporate and legal information that evidences their BCs, and such information is certain, complete, and up-to-date and within reach of the tax authorities through the implementation of the internal controls that result necessary in order to prevent and mitigate whichever contingency in tax matters.

Mexico City, February 24, 2022

Comments

Mainly, the publications that must be made through the PBC are the following:

• Notice for a General Incorporation Meeting.
• Notice for Shareholders’ Meeting.
• Notice for Participation Certificate Holders’ Meeting.
• Notice for Meetings requested by the authorities.
• Shareholders’ Meeting agreements that approve the increment or reduction of the share capital.
• Balance sheet of the negotiation of foreign companies.
• Balance of companies that issue obligations.
• Financial statements, notes, and Commissioner’s opinions.
• Share capital reductions.
• Merger agreements, the last balance sheet of every company involved in the merger and the system established for the termination of the liabilities.
• Spin-off resolutions.
• Transformation agreements.
• Exhibition decree whose amount or term is not included in the stock.
• Agreements regarding partial distributions (liquidation).
• Final liquidation balance sheet.
• Results regarding sweepstakes of redeemed shares.
• Transportation employers’ regulations.
• Other publications set forth in commercial provisions according to the catalog provided in the PBC.

The PBC allows the performance of the following operations: (i) query, which allows the search of information and download of ballots; (ii) publication, which refers to the submission and delivery of the information that needs to be diffused in terms of the applicable provisions; and (iii) rectification, which allows the amendment and correction of the publications made.

It should be noted that the information that is generated, delivered, received, stored and/or filed in the PBC is considered as a data message in terms of article 89 of the CC; so these messages, as well as documents signed with the Advanced Electronic Signature produce the same effects that those with an autograph signature and have the same evidential value.

Recommendations

We suggest verifying the correct content of all the legal acts that the commercial provisions compel to be published through the PBC and, when applicable, amend whichever omission or mistake in the information submitted, making it necessary to address it through a Compliance Program in Corporate matters.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, August 18, 2021

1. Annual Meeting of Partners or Shareholders

In terms of the General Law of Mercantile Companies, the CE must hold an ordinary annual meeting within the four months following to the close of the fiscal year, that is, no later than April 30^th, in which will be discussed and approved the following:

• Financial Statements of the CE for the fiscal year previously concluded as well as its Annexes.
• Report of the Administrator / Sole Manager or Board of Directors / Managers.
• Report of the Commissioner for the previously concluded fiscal year.
• Emoluments of Administrators and Commissioners.

At the Annual Meeting other matters may also be addressed, such as: (i) resignation, removal or appointment of the Administrator / Sole Manager or the members of the Board of Directors / Managers, or (ii) the granting or revocation of powers.

2. Filing the Report of Foreign Partners or Shareholders before the Federal Taxpayers Registry

If the Partners or Shareholders of a CE are individuals or legal entities residing abroad and are not registered before the Federal Taxpayers Registry (FTR), the CE must file though the Tax Administration Service (TAS) website a report of Partners or Shareholders within the first three months after the closing of the corresponding fiscal year indicating their domicile, tax residence and tax identification number.

Moreover, from 2020 fiscal year the CE must submit though the TAS website a Notice at the FTR within 30 business-day-term following that in which any modification or additions was made in their shareholding structure, reporting the name and the number in the FTR of its Partners or Shareholders.

Notwithstanding the previous paragraph, the Miscellaneous Tax Resolution for 2021 indicates that taxpayers who during 2020 fiscal year had not submitted the aforementioned Notice may do so for a single occasion no later than March 31^st, 2021. Those taxpayers who subsequently to January 1^st, 2021 and during the first half of 2021 they have to submit such Notice, they may submit it no later than September 30^th, 2021.

3. Filing the Notice of the Shareholding Structure Modification before the Ministry of Economy

 Since December 15^th, 2018, any modification or additions of Shareholders in a Inc. or members of an LLC must be reported through a Notice that is submitted in the Electronic System of Companies Publications’ of the Ministry of Economy (ME).

4. Annual Renewal before the National Registry of Foreign Investment

In terms of the Foreign Investment Law and its Regulations, the CE that have foreign investment must register before the National Registry of Foreign Investment (NRFI) and renew the certificate annually, provided that during the last fiscal year they have had an amount which exceeds MXN $110’000,000.00, in any of the following accounts or concepts:

• Total assets.
• Total liabilities.
• Income (in Mexico and abroad).
• Expenses (in Mexico and abroad).

The aforementioned Annual Renewal must be submitted before the NRFI of the ME.

5. Quarterly Update Notice before the NRFI

Regardless the foregoing, the CE must submit the Quarterly Update Notice within 10 business-day- term following the closing of the corresponding quarter (January-March, April-June, July-September, and October-December), if there were modifications during said quarter in:

• The company name, tax domicile, or the economic activity of the CE.
• Income or expenses accounts in an amount that exceeds MXN $ 20’000,000.00.
• The participation in the capital stock of foreign legal entities in an amount that exceeds MXN $ 20’000,000.00.
• Variations in the balances of the following accounting items in an amount that exceeds MXN $ 20’000,000.00:
  • Accounts receivable or payable from Subsidiaries, Partners or Shareholders and / or Companies resident abroad that are part of the same Corporate Group and are not Partners or Shareholders.
  • Contributions for future capital increases.
  • Capital reserves.
  • Results of previous fiscal years (transfer of the results of the year to accumulated and dividends).

The abovementioned amounts are subject to variations by the National Foreign Investment Commission.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, February 2, 2021

Legal entities that do not have updated the information of their partners or shareholders must submit the Notice, for unique occasion, no later than June 30, 2020, reporting the shareholding structure that they currently have as stated by the Forty-sixth transitory article of the MTR.

Comments

We consider that the aforementioned provisions lack of certainty since they do not consider legal entities that have not undergone modifications or additions of partners or shareholders since their establishment or in which the legal entities shares’ are placed among many investors through the Mexican Stock Exchange.

Likewise, we consider that this Notice represents a new obligation as of 2020 fiscal year, and does not replace the Report that must be submitted by legal entities no later than the following March after the close of each fiscal year regarding the partners, shareholders or associates, residents abroad, indicating their domicile, tax residence and tax identification number (TIN) in accordance with article 27, section A, last paragraph of the FTC. In case of partners or shareholders residing abroad who are not obliged to register before the FTR a generic TIN must be specified in such Report as provided under the rule 2.4.5. of the MTR.

Moreover, it is necessary to reminder that as of December 15, 2018, any modification or additions of shareholders in a Inc. or members of an LLC must be reported through a notice that is submitted in the Electronic System of Companies Publications’ of the Ministry of Economy in accordance with the provisions set forth in articles 73, second paragraph, 129, second paragraph of the General Law of Mercantile Companies and 50 Bis of the Commercial Code, therefore, it is essential to always keep updated the records of the Meetings books, Shares Registry books and Variations of Capital books and writing down the TIN of the shareholders or members.

Recommendations

In the 2020 fiscal year, it will be the first time that the Partners or Shareholders Update Notice must be filed, therefore, regardless of whether or not there are modifications or additions to the shareholding structure of the legal entity in question, we suggest to submit such Notice in order to avoid a fine for its omission but, above all, to avoid the temporary restriction of digital seal certificates for the issuance of e-invoice, situation that would totally paralyze the activities and operations of the legal entity.

If you have any questions regarding the foregoing, please do not hesitate to contact us.

Mexico City, June 22, 2020