30 Oct Amendment to the General Law of Commercial Entities: Shareholders’ meetings and board meetings may now be adopted through electronic means.
In order to facilitate and optimize meetings of the shareholders and management bodies of corporations and companies in Mexico, on October 20, 2023 an amendment to the General Law of Commercial Entities was published, which allows, among other matters, that shareholders and board meetings to be held through any electronic, optic or technological means (such as videoconference meetings though electronic platforms).
This amendment addresses the following main topics:
- Electronic, optic and other technologies are recognized and enabled to hold shareholders and board meetings.
- The regulation of the principles of neutrality and equivalence of virtual-electronic and traditional means.
- The the total or partial assistance of shareholders or members of the Administration Body is permitted virtually or in person.
- Standardize the requirements of calls for meetings in terms of the Code of Commerce provisions.
The bylaws of Mexican corporations and companies shall establish the rules for the shareholders meetings. Whether those are face-to-face, virtual or hybrid, mechanisms or measures shall be contemplated to allow:
- The access and due identification of the attendees.
- The simultaneous participation.
- The interaction in the deliberations in a manner functionally equivalent to the presential form.
- The sense of the vote, as applicable.
- Due evidence of the above.
The new legal provisions set forth that the meetings held virtually, shall not be deed held out from the corporate domicile of the company, and shall have the same legal effects and force as those held face-to-face.
In addition, the amendment establishes that the publications of calls for meetings shall be made through the electronic system established by the Ministry of Economics known as System of Publications for Commercial Entities.
The amendment became effective on October 23, 2023 (except for certain law provision relating to the publication of calls for meetings of limited liability companies, which will become effective 6 months following its publication).
Therefore, it is convenient that corporations and companies in Mexico to amend their by-laws to adjust them under the new legal provisions relating to rules for shareholders and board meetings, either physical, through virtual means or hybrid. This will offer benefits relating to corporate governance compliance, ensuring dynamism, practicality and agility in decision making within the corporate bodies of the entities.
If you have any questions or comments, or if you would like our Firm to review the particular implications for your company and the existence of legal actions, please do not hesitate to contact us.
Contact
Jesús Bueno
Liliana Torres
THE ABOVE IS PROVIDED AS GENERAL INFORMATION PREPARED BY PROFESSIONALS WITH REGARD TO THE SUBJECT MATTER. THIS DOCUMENT ONLY REFERS TO THE APPLICABLE LAW IN MEXICO. WHILE EVERY EFFORT HAS BEEN MADE TO ENSURE ACCURACY, NO RESPONSIBILITY CAN BE ACCEPTED FOR ERRORS OR OMISSIONS. THE INFORMATION CONTAINED HEREIN SHOULD NOT BE RELIED ON AS LEGAL, ACCOUNTING OR PROFESSIONAL ADVICE BEING RENDERED.