Changing Company Types in Mexico

Updated on Friday 16th February 2018

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In Mexico, according to the local legislation, it is possible to change a company type by closing the existing legal entity and then registering a new one. In this article, our Mexico company formation consultants cover a few aspects related to changing company types in Mexico.
 

Legal entity types in Mexico

 
To set up a new legal entity in Mexico, the current one has to be liquidated so that their structure can be changed.
 
The most widely utilized forms of legal entities in Mexico are the stock corporations and the limited liability companies.
 
These types of companies are divided into a few sub-categories which are ruled by various regulations related to if all capital has to be fixed or if it can be made of a fixed and variable portion.
 
A stock corporation can also be set up as:
 
A listed business entity;
An unlisted investment promotion entity.
 
Private companies can be set up for various purposes other than commercial ones. Therefore, there are different kinds of entities according to federal and state laws. Our company formation advisors in Mexico can provide more details related to this matter.
 
Commercial companies have to abide by the federal laws, which also apply for all commercial operations in Mexico.
 
Other regulations can also be applied to certain types of companies or activities, such as securities, agrarian, financial laws or co-operative ones.
 

Incorporation steps for a new legal entity in Mexico

 
Incorporating a new legal entity in Mexico is necessary when changing the company type in this country.
 
To set up a listed company or a limited liability corporation in Mexico, the following steps are required:
 
Filing for a Permit of Incorporation for the legal entity under a suggested name with the Secretariat of Foreign Relations. To do this, two or three names are required. The authorization is issued in two to three working days;
Incorporating the legal entity with a Notary Public. The initial capital of the company has to be paid entirely in case contributions are acquitted in kind, or it can be partially acquitted at a minimum of 20% if the capital contributions are in cash. Our Mexico company registration agents can offer more information on this subject;
Holding a general ordinary shareholders' or partners' meeting at the moment of the incorporation. In this meeting, different aspects should be established, such as the structure of the capital stock, appointing a Sole Administrator or a Board of Directors, depending on the case, and so on;
Other steps: our Mexico company formation representatives can offer more details on what these other steps consist of.
 
If you have more questions about changing company types in Mexico, or for help in setting up a company in Mexico, please contact us.

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