On October 20th, the Official Gazette of the Federation published a decree amending and adding several provisions of the General Law of Commercial Companies (the “Law”).

The amendment to the Law is in line with the trend to modernize the Mexican legal system and has as a precedent, among others, the amendment to the Civil Code for the Federal District (currently Mexico City) of 2021, which introduced similar amendments to the Civil Association (the “Association”) regarding the manner in which individuals express their will.

The amendment to the Law addresses the concepts indicated below, mainly with respect to corporations (“S.A.”) and limited liability companies (“S. de R.L.”):

I. The possibility is given to incorporate the use of electronic, optical or any other technology (“telematic means”) in the exercise of the corporate management of the companies, in the meetings of partners or shareholders or of the board of managers or directors, depending on the type of company.

II. For this purpose, it is required that the bylaws of the company provide the possibility of adopting such decisions physically, by telematic means, or in a hybrid manner. The foregoing provided that the resolution is adopted simultaneously and allows interaction in a manner functionally equivalent to the face-to-face meeting.

III. Regarding the corporate domicile, it is foreseen that in the future a partners or shareholders meeting may be held outside the corporate domicile, as long as there is the agreement of the partners or shareholders and the use of telematic means is permitted.

IV. The obligation is created for the S. de R.L. to make in the future the call for the holding of its partners’ meetings by publishing a notice in the electronic system established by the Ministry of Economy. The foregoing will be applicable regardless of whether the bylaws do not provide for such possibility. With the foregoing, the previous provision, which consisted in that the notices to the meetings would be sent by certified mail, is hereby superseded.

V. In the case of a S.A., it is provided that the management report and the financial information related to an annual meeting shall also be available through telematic means and not exclusively at the offices of the issuing company.

VI. Finally, this amendment contemplates the possibility that the shareholders’ meeting minutes may be signed electronically.

It is worth bearing in mind that: i) it should be understood that the reform to the Law should also apply to a stock investment promotion corporation (SAPI), even though this type of corporation is regulated by a different legal statute; and ii) it does not regulate in an exhaustive manner how to adequately control the decisions made through telematic means. Therefore, it is advisable to include in the bylaws the necessary measures to guarantee such control, such as in the case of an Association, in which it is provided that the meetings must be recorded and kept by the administration of the Association and a copy must be added to the respective minutes.

The amendment to the Law became effective the day after its publication, with the exception of the provisions of paragraph iv above, which will become effective 6 months later.

Should you have any questions or require additional information regarding this communication, please contact info@rapa.mx.