Planning of Corporate Transfers by Foreign Partners

What should I do when I want to transfer my shares of a Mexican company?

Whether by sale, merger, acquisition, spin-off or dissolution of one of the partners, the transfer of shares abroad without taking into consideration the prior legal compliance required in Mexico is a very common corporate practice performed by foreign partners.

What should I consider when transferring corporate shares of a Mexican company?

The problem of these corporate practices abroad derives from a breach of both the “Ley General de Sociedades Mercantiles“ (LGSM) and the “Estatutos Sociales“  of Mexican companies with foreign partners.

This is due to the fact that there are a series of steps to be followed before any type of transfer of corporate shares abroad, such as:

  • The prior approval of the partners by means of an assembly (Asamblea) or a unanimous decision for the transfer of corporate shares (art. 65 of the LGSM);
  • The waiver or exercise of the right of the shareholders to acquire the shares (art. 66 of the LGSM);
  • The formalization of the assembly or resolutions by means of a public deed and registration in the corresponding public register.

Likewise, you must take into account the following actions once the transfer has been completed:

  • Registration in the “Libro de Registros de Socios“ of the new corporate structure (art. 73 of the LGSM);
  • Publication of said structure in the electronic system of the Ministry of Economy (PSM) (art. 73 of the LGSM);
  • Issuance of the corresponding nominative certificates that cover said shares.
  • Notice to the “Registro Federal de Contribuyentes“ of the new partners (art. 27, paragraph B, section VI of the “Código Fiscal de la Federación”).

What are the legal consequences of non-compliance?

If there is no approval and formalization of the operations to be carried out abroad, the Mexican authorities may interpret it as a breach of the corporate due process.

In case of non-compliance, the tax and administrative authorities may issue monetary penalties.

How can we help you?

WMP Mexico Advisors provides you with advice and consultancy for the completion of all the necessary documentation for legal compliance with the corporate process.

Therefore, it is of vital importance that, whenever a foreign partner wishes to make any movement involving any transfer of shares in a Mexican company, we are informed in advance so that we can be in a position to assist you with corporate legal compliance.

Please contact our WMP Legal department in case of any doubt or clarification on this informative note!

 

Contact:
Christoph Piotrowski
Christoph.piotrowski@wmp.mx
WMP Mexico Advisors

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