Legal orientation for the acquisition or sale of share certificates and partnership interest certificates

In order to take a participation in companies located in Mexico by means of shares or partnership interests, amongst other laws, the Federal Fiscal Code (Código Fiscal de la Federación) has to be obeyed. Especially the share certificates or partnership interest certificates which are called “Títulos Nominativos” play a leading role in that context. In the following, we provide you with an overview on Mexican legislation in terms of participation.

After the foundation of a Mexican trading company, so-called share and partnership interest certificates are printed on security paper and handed over to the respective shareholder or associate. In case of stock corporations (Sociedades Anónimas) share certificates are exhibited while in limited liability companies (Sociedades de Responsabilidad Limitada) partnership interest certificates are issued. Those titles assure the holders of certain rights such as to participate in decisions made by the company.

Shareholders and associates are able to transfer, sell and encumber their shares or partnership interests according to the general law for trading companies (Ley General de Sociedades Mercantiles). As doing so, company statutes have to be obeyed.

In order to transfer shares and partnership interests, the respective shares and interests have to be evaluated in the following cases:

  1. If the shareholder / associate wants to sell or transfer to another person his /her total or partial share in the social capital (art. 14 Federal Fiscal Code).
  2. If the legal entity reduces social capital by decreasing the number of shares / interests or by reducing the number of shareholders / associates.
  3. In case of liquidation, merger or operational split of the respective company, if certain criteria apply (art. 14-B Federal Fiscal Code).

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