Setting Up A Business: Incorporating

Steps For Incorporation

Similar steps are taken for other corporate forms. To establish a Sociedad Anónima or a Limited Liability Company (the two most common corporate forms), the steps will be the following:

1. File for an Incorporation Permit for the company under a proposed name before the Ministry of Foreign Affairs. This authorization will take around two to three working days.
2. Incorporate the company before a notary public or commercial broker. The company's initial capital contributions must be paid in full if it is paid in kind, or if in cash it can be partially paid at a minimum of 20%. In the case of the SRL, the initial paid amount is 50%. The company must issue registered share certificates, and the shareholders must be registered in the Company Stock Registry Book. Shares certificates are not necessary in SRLs.
3. Concurrent with the incorporation, the shareholders/partners must hold a General Ordinary Shareholder's/Partner's Meeting resolving on: (i) the structure of the capital stock; (ii) acknowledgment that the fiscal year will run together with the calendar year except for the first year which will be irregular; (iii) appoint a Sole Administrator or a Board of Directors; (iv) appoint at least one "Examiner" (statutory auditor) to monitor the company's administration on behalf of the shareholders (In the case of the SRL there is no requirement for an examiner); and (v) appoint a General Manager, and any other officers or agents.
4. The Sole Administrator or Members of the Board of Directors of the company may be foreigners and the Board of Director's meetings may be held in or outside Mexico. If the Sole Administrator or Directors are not Mexican citizens and will be acting in Mexico, they need a migratory permit.
5. The Examiner (in the case of a sociedad anónima) usually is an accountant from an accounting firm who regularly audits the company. Also, an alternate Examiner should be appointed because this position cannot be delegated at will.

Time Frames

Besides obtaining prior approval from the Foreign Investments Authorities (if necessary), the incorporation date of the company is dependent upon: 1) drafting of the by-laws to be used for the company; 2) execution and formalization of the special powers of attorney to incorporate the new company (if any); 3) the approval of the corporate name by the Ministry of Foreign Relations; and 4) an appointment date from the notary public or commercial broker for signing the incorporation deed.

This text was provided by Santistevan Abogados S.C.

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