Mexico amends its General Law of Commercial Companies to allow virtual partner, shareholder, and board meetings
On October 20, 2023, a decree was published in the Official Gazette of the Federation (Diario Oficial de la Federación) of the United Mexican States that amends several provisions of the General Law of Commercial Companies (Ley General de Sociedades Mercantiles).
The decree seeks to authorize and regulate partner, shareholder, director, and manager meetings held through electronic, optical, or any other technology (the Amendment).
Such changes aim to preserve technological neutrality and the principles of equality between traditional and digital means.
- The commercial companies are obligated to include in its bylaws the rules for holding shareholder, partner, board of managers, or directors meetings in person or through the use of electronic, optical, or any other means of technology. The bylaws must allow complete or partial participation through the aforementioned means, which at all times must allow for simultaneous participation, interaction of deliberations, certainty in the direction of the vote, and generation of corresponding evidence.
- Members of the board of managers and board of directors have the right to issue resolutions through the use of electronic, optical, or any other means of technology, provided that it is allowed by the company’s bylaws.
- It shall not be assumed that a partner or shareholder meeting is held outside the company’s registered office (domicilio social) simply because of the use of electronic, optical, or any other technological means.
In addition, partners or shareholders may hold meetings outside the registered office as long as all partners and shareholders approve, and as long as it is possible to use electronic, optical, or any other technological means. For such meetings, the address at which the respective meeting is held must be indicated in the minutes of the corresponding meeting.
- Calls to hold shareholder and partner meetings must be carried out in the electronic system established by the Ministry of Economy (Secretaría de Economía) within the timeframe established in the bylaws, or, if the bylaws are silent in that regard, 8 days prior to the date of the meeting for the limited liability companies (sociedades de reponsabilidad limtiada) or 15 days prior to the date of the meeting for shares companies (sociedades anónimas).
- A corporate financial report may become available prior to a general shareholder meeting by any electronic, optical, or other technology established in the bylaws.
- General shareholder meeting minutes may be signed with a wet-ink or electronic signature by the chairman, secretary, or statutory auditors.
The Amendment became effective the day after its publication in the Official Gazette of the Federation. However, the provisions outlined above in section IV will become effective six months after the publication of the Amendment in the Official Gazette of the Federation, exclusively with respect to what is applicable to limited liability companies.
A limited liability company incorporated before the reform referred to in section IV above must publish its calls for a partner meeting in the electronic system established by the Ministry of Economy in accordance with the terms of article 50 Bis of the Commercial Code (Código de Comercio) and comply with the requirements established in said reform, even if the company’s bylaws contemplate that they will be carried out by another means.
The Amendment represents a significant change in the development of Mexican commercial law and will provide greater flexibility and legal certainty for commercial companies operating in Mexico.
We encourage companies to consider amending their bylaws incorporated prior to the Amendment to include the aforementioned provisions.
For more information, please contact the authors.