A. COMPLIANCE FOR INCORPORATION
Incorporation The following steps are necessary for the incorporation of a company in Mexico:
Defining the corporate scope: Defining in a wide and detailed way the corporate scope of the company to be created.
Determining the corporate regime:
- Indicating the corporate regime with which it is intended to operate (S.A., S.A. de C.V., S.R.L. de C.V., etc.). Also, the way in which the company will be represented (Sole Administrator, Board of Directors, etc.);
- Appoint the company’s tax domicile in Mexican territory;
- Obtaining the Powers granted by the company, the type of POAs and the persons to whom they will be granted must be mentioned;
- In order for the POAs granted by the company through agreement of the Assembly or collegiate administration organism to take effect, will require notarizing the corresponding section of the minutes where their granting appears, duly signed by those who acted as President or Secretary.
Determination of patrimonial situation: At this point, you must have clear the shareholders or associates who will constitute the company, as well as the percentage of shares each of them will hold. (At least 2 shareholders are required)
Incorporation formalities: Pursuant to Section 5 of the Mexican Law of Commercial Companies, “the incorporation of companies must be notarized, as well as their amendments. The Notary Public shall not authorize the public deed or policy when the bylaws or their amendments contravene the provisions of this law.”
According to Section 6 of the Mexican Law of Commercial Companies, the Incorporation Deed must contain the following:
- Names, nationality and domicile of the natural or legal persons who incorporate the company;
- The company’s corporate scope;
- Its legal name;
- Duration, which may be indefinite;
- Amount of the capital stock;
- The expression of what each shareholder contributes in cash or other assets; the value attributed to these and the criteria followed for its enhancement. When the capital is variable, so will it be expressed indicating the minimum that is set;
- The manner how the company will be administered and the power of the administrators;
- The appointment of administrators and the designation of those who will carry the social signature;
- How to make the distribution of profits and losses among the members of the society;
- The amount of the reserve fund;
- Cases where the society will be liquidated in advance, and
- The bases for the liquidation of the society and how to proceed to the election of the liquidators, when they have not been designated beforehand.
All requisites referred to in this Section and the other rules established in the public deed regarding their organization and operation will form the company’s Bylaws.
Registration of every company, as well as obtaining the Taxpayer Registry Number (Tax ID or RFC) and the advanced electronic signature (e. firma) are performed before the Tax Administration Service (SAT).
It is important to mention that in order to conclude the incorporation of a company, it is mandatory that the General Assembly approves it, in order to continue with the notarization and registration of the Minutes of the Meeting of the Board and of the Bylaws (Section 101 of the Mexican Law of Mercantile Societies.
Section 15 of the Commercial Code provides that those companies legally incorporated abroad that establish in Mexico or having an agency or branch, may conduct business, subject to the special provisions of said Code regarding the creation of their establishments in Mexican territory, their commercial operations and the jurisdiction of the Nation’s courts.
The legal incorporation of foreign companies may be accredited with a certification indicating that they are authorized and incorporated according to the laws of the country where they were incorporated, pursuant to Section 17, Subsection I and Section 17 A, Subsection a) of Chapter Four of the Foreign Investments Law.
B. POST INCORPORATION REGISTRATIONS
- Company’s registration before the Tax Administration Service (SAT);
- Company’s registration as employer before the Mexican Institute of Social Security (IMSS);
- Employees’ registration as the Company’s employee before IMSS; and
- Registration of the Company before the local Treasury (i.e. Mexico City’s Treasury).