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As previously mentioned, corporations are entities that the law recognizes as persons, which means that the corporation for the law is an individual different from its partners/shareholders. Doctrinally, legal personality has been defined as the "aptitude to be a subject of rights and obligations". This means that corporations can have their own rights and obligations autonomously from those of their partners/shareholders. Every person recognized as such by law, i.e. with legal personality, is attributed certain characteristics that have the function of individualizing the person, distinguishing it from others. These characteristics/qualities are called attributes of personality. The attributes of personality are the following: Name: Individualizes the persons, in the case of legal entities, the name is the corporate name (for capital companies) and it is requested by means of authorization to the Ministry of Economy through a portal; or in its case, it is the corporate name (for partnerships) composed by the name of the partners of the company. Domicile: It is the place where the person predominantly fulfills its obligations. In the case of the corporation, it is customary for the corporate domicile to be a federal entity, i.e., a state, without designating a specific address. Notwithstanding the above, in the electronic form to incorporate the Simplified Joint Stock Company, a specific address is designated as the corporate domicile. In my opinion, the corporate domicile declared in the deed generates more problems than benefits (since the meetings must be held at the corporate domicile). Nationality (Political Status): It is the link between the person and a state (nation), generating rights and obligations in relation to such position. Capacity: It is the aptitude to be the holder of rights and obligations and to exercise them through a representative (capacity to enjoy) or by oneself (capacity to exercise). Patrimony: It is the set of rights and obligations belonging to a person and that can be valued in money. Additionally, individuals have civil status, but this attribute is not logically applicable to legal entities, since they do not get married and do not have a family. Legal entities have juridical personality from the moment they are externalized as such before third parties or, as the case may be, from the moment they are registered in the Public Registry of Commerce. Once registered in the Public Registry, only companies that have unlawful purposes or habitually perform them may be declared null and void, in which case they will be immediately liquidated (sale of assets and payment of debts) with the remaining (profit) to pay any civil liability that may have arisen and the rest will go to the public charity of the locality where the company has its domicile. The petition to declare null and void a corporation that has unlawful purposes or that habitually carries out such purposes may be filed by any person. Corporations that have not been registered in the Public Registry of Commerce, but that hold themselves out as such before third parties, are regulated by the agreement of the partners (corporate contract) and by the provisions of the General Law of Mercantile Corporations relating to the corresponding corporation. The Simplified Joint Stock Company is only effective with respect to third parties if it is registered in the Public Registry. The rest of the companies that are externalized as such before third parties, but are not registered are called irregular companies, either: - That only the essential requirements foreseen in Art 6 of the General Law of Mercantile Corporations have been agreed upon, without a public deed having been executed, or; - The agreement has been executed in a public deed but it has not been registered. Those who represent irregular companies in agreements with third parties are liable subsidiarily (if the company does not comply, they must comply), jointly and severally (the third party may demand compliance from the company or the representative) and unlimitedly (with all its belongings) for such agreements, regardless of the liability that may arise if crimes have been committed. Partners not guilty of the irregularity, may demand the payment of damages (losses) and losses (profits not obtained) from the guilty partners, as well as from the representative.

Mexican companies with foreign investment are required to register in the National Registry of Foreign Investment (Registro Nacional de Inversión Extranjera, RNIE), which is under the Ministry of Economy, as well as to file notices in this regard. The most relevant aspects of this matter are the following: 1) At the moment of incorporation/entering a company: Include in the bylaws a clause regarding the admission of foreigners: At the beginning every company with foreign capital must include in its bylaws (the rules of the company), a clause of admission of foreigners, in which according to articles 27-1 of the Constitution and 15 of the Foreign Investment Law, foreigners agree to consider themselves as nationals regarding their participation in the company, as well as the activities carried out through the same and not to invoke the protection of their governments in this regard; under the penalty, in case of failure to comply with the agreement, of forfeiting to the benefit of the Nation, the assets/shares they have acquired by virtue thereof. 2) Within 40 (forty) business days from the incorporation or, as the case may be, entry into the company: notice of registration must be given to the RNIE. You can check if your company is registered in the RNIE, in the following link: https://datos.gob.mx/busca/dataset/registro-nacional-de-inversiones-extranjeras-rnie In the event that the filing exceeds the established term, the obligated parties will be subject to a penalty ranging from 30 to 100 UMA (Unidades de Medida y Actualizacion) per day. You can calculate your infraction at the following link: https://rnie.economia.gob.mx/RNIE/faces/sanciones.xhtml Requirements: Application Form for Registration in the National Registry of Foreign Investments. Original and Copy. Legal instrument that accredits the personality of the legal representative. Original and copy. Official Identification of the Legal Representative. Original and copy. Letter of authorization to carry out procedures before the RNIE (if applicable), it must be signed by an attorney-in-fact with powers to grant powers of attorney. Original and Copy. Official identification of the authorized person to carry out procedures before the RNIE. Original and copy. Proof of payment of fine (if applicable). Original and copy. Tax Identification Card issued by the SAT. Original and copy. Articles of Incorporation of the Company. Original and copy. Document that proves the income of the foreign investment. Original and copy. Document that proves the source of financing (if applicable). Original and copy. Document that proves the condition of stay in Mexico (if applicable). Original and copy. The process can be submitted electronically, by sending the requirements to the following e-mail address: inscripciones.rnie@economia.gob.mx., from 00:00 to 23:59 hrs. 3) File quarterly notices: Within 10 business days following the close of each quarter (January-March, April-June, July-September, and October-December). If any of the following changes are made: Name, denomination or corporate name. Tax domicile. Economic activity. or; If there are variations in any of the following accounts, greater than twenty million pesos ($20'000,000.00): Capital stock and/or shareholding structure that imply a change in the participation in the capital stock of foreign individuals or legal entities. Assets. Accounts receivable from Subsidiaries resident abroad, Partners or Shareholders resident abroad and/or Companies resident abroad that are part of the corporate group and that do not participate as partners or shareholders. Liabilities. Accounts payable to Subsidiaries resident abroad, Partners or Shareholders resident abroad and/or Companies resident abroad that are part of the corporate group and that do not participate as partners or shareholders. Stockholders' equity. Contributions for future capital stock increases. Stockholders' equity. Capital stock reserves or results of previous years. In the event that the presentation exceeds the established term, the obligated parties will be subject to a penalty ranging from 30 to 100 Units of Measurement and Actualization (UMA) per day. 4) File annual notice: If denomination/name starts from "A" to "J", during April; and, From "K" to "Z", during May. If the name or company name begins with a number or any other character, it must be filed during May. When any of the following accounts is greater than one hundred ten million pesos ($110'000,000.00): Initial total assets, Final total assets, Initial total liabilities, Final total liabilities, Revenues in the country and abroad or Costs and expenses at home and abroad #Mondayof #Legaltip #BLPAdvisors #Thelegalstartupforstartups

For incorporating a company in Mexico, certain requirements must be met, which are as follows: Define the type of company: As previously discussed in publications, we consider there are three types of companies worth evaluating: Anonymous Company (SA): A very flexible company, similar to a SAPI, recommended for founders of a company if it will have minority shareholders. Investment Promoting Anonymous Company (SAPI): The most flexible of all companies, recommended if you are going to invest in a company as a minority shareholder, as well as for companies that intend to have investment from funds/sophisticated investors (since this is the structure they prefer most). Limited Liability Company (S de RL): This company is for closed companies (i.e., there will be no entry of investors/partners), with the advantage that it does not require a commissioner, simplifying the appointment of officials and works for companies that are controlled by American companies, as under American law, it allows operating as a transparent entity, meaning that profits and losses are reflected in the American company as if they were its own. Define partners/shareholders and contributions: In the case of SA and SAPI, the shareholders must be defined, their proportions in the company, and their investments. There is currently no minimum requirement to establish the company, so it can be established with $2. We suggest establishing it with $1,000, $2,000, or $50,000 in constitutive capital. The social capital is equivalent to the contributions made by the shareholders. This means that the constitutive capital indicated must be actually paid by the partners in favor of the company (we recommend making the corresponding deposits once the bank account is available). It is worth mentioning that contributions to capital (investments) do not generate either Income Tax or Value Added Tax. Once the constitutive capital is determined, the number of shares that will exist and their nominal value (minimum cost that must be paid for the subscription of a new share, that is, if new shares are created, the person who is the first owner of that share must pay for its purchase from the company, at least its nominal value) must be determined. It is most common for each share to have a value of $1, however, other values can be used. It is worth mentioning that the nominal value of the share can be omitted, in which case there will be no minimum cost for the subscription of new shares. To determine the percentage of participation of each shareholder/partner (in general terms), the number of shares or the value of the social part (in the case of S de RL) must be divided by the total number of shares or the social capital (in the case of S de RL). It is worth mentioning that the S de RL has a maximum of 50 partners. Define name, address, object of business, duration Name = Social Denomination Prior to the establishment, anyone must request the approval of the company's name through the corresponding Secretary of Economy's portal or through the notary/broker. (We suggest giving three options). Authorization takes three days. Address = Domicile Object of Business = Purpose of Company Duration = Length of Time Company Will Exist Identifying Members of Organs: Companies generally have three organs: 1) Shareholders/Supreme, 2) Administration, and 3) Surveillance. The supreme organ is the shareholders' assembly for the case of SA and SAPI, and the partners' assembly for the case of S de RL. This organ is composed of all the partners or shareholders of the company, provided they have the right to vote and can decide any matter related to the company. The administration organ consists of a manager (SA) or administrator (S de RL), or a board of directors (mandatory for SAPIS - minimum 2 members and optional for SA) or managers (S de RL). The managers/administrators can or cannot be partners/shareholders of the company, it is recommended that the majority be Mexican for the purposes of the company's tax residence (to have its administration in the country) and in theory, it is composed of those who run the company on a day-to-day basis. They are the epitome of the company and their powers depend on what the bylaws establish (where it can be established that they can act individually or, in some cases, that they must take all or some decisions together and appoint a delegate to carry them out). We recommend granting them: Power for administrative acts (ordinary acts that do not represent a detriment to the company). Power for litigation and collection (appear in controversies and collect debts). Power to grant powers (allows appointing attorneys without the need of a shareholders/partners assembly). Evaluate if granting: Power for acts of domain (allows acting as the owner) - We recommend it be joint (must be exercised together). Power for titles and credit operations. Power to open and close bank accounts, as well as to make deposits and draw against them. The surveillance organ is composed of one or a board of commissioners. The commissioner is mandatory for SA and SAPI, but optional for S de RL. Selecting the Broker or Notary to Establish Your Company: The constitution of the company must be carried out through a notary or public broker. The difference between the notary and the broker is that the broker can only act in commercial matters and is regulated at the federal level, while notaries can act in civil and commercial matters and their actions are regulated at the state level. A disadvantage of establishing before a broker is that they cannot grant powers (appoint representatives beyond the directors/administrators). We highly recommend notaries 180, 20 and 237 from Mexico City. The notarial cost of a constitutive is around $15,000. Defining the Bylaws Clauses: The bylaws of the company are the rules by which the company will be conducted, in addition to the points indicated in numbers 1-5, issues such as rules for the termination of the company, the rights of each class of shares, and/or preference rights for the purchase of shares are established. Some of the topics that we suggest including and/or taking into account: there is only a preference for new shares created by the company, not for shares sold by a shareholder. Joint sale right - If you want to sell, you must give me the option to sell the same proportion of my shares, otherwise you cannot sell. (SA and SAPI) Drag-Along Right - Possibility of making other shareholders sell together under certain conditions. (SAPI - It is not clear if it applies to SA) Non-competition right - It must be limited to a geographical area, to certain specific activities, and for a maximum of 3 years from the time they cease to be a shareholder. Increase and decrease in variable part - If no one has more than 50% of the shareholding or it is a closed company, it is recommended to establish that it can be carried out through an Ordinary Assembly, if you are an investor/minority, it is recommended to establish that it must be approved by an Extraordinary Assembly. Have a list of documentation and send it to the notary: General information of the shareholders will be required Tax ID card (also of spouse if married) Birth certificate (also of spouse if married) Legal residency in the country if a foreign national CURP, if applicable Shareholder identification. #TiplegalMonday #BLPAdvisors #Thelegalstartupforstartups

If you have a business and are considering incorporating a company in Mexico, you should consider the following: Incorporating a company offers shareholders advantages such as the ability to clearly organize the relationship between partners, differentiate between project assets and those of each investor/partner, provide certainty to investors, increase customer confidence, and maintain proper control of all business-related activities. It also allows you to take your business more seriously and formalize it. However, there is currently a simplified trust regime known as the "Simplified Trust Regime" (RESICO), applicable to individuals who earn a maximum of three million five hundred thousand pesos per year and perform any of the following activities: Business activities = commercial, industrial, or transportation. Professional activities = those requiring a professional title for their practice. Property rental. This regime has the advantage that only income tax is payable, ranging from 1% to 2.5% on the income received (without deductions), meaning for every $100 you earn, you pay between $1 and $2.5, regardless of how much you earn. This is in contrast to companies, which generally pay 30% on their profits (i.e. add up the income, subtract deductions/invoices and pay 30% on the remaining). Both the company and the individual in RESICO must pay 16% VAT on the goods or services they commercialize/provide. However, incorporating a company protects its shareholders, as they are only liable for the company's debts up to the amount of their contributions (investments). This means that any problems, debt, legal actions or risks faced by the company are not applicable to the shareholders personally (generally speaking), however, if a person provides/commercializes goods or services under RESICO, they assume all risks, problems and legal actions personally. Consider the following: Company cost: Incorporating a company approximately costs $15,000 plus your advisors' fees. Accounting: Both RESICO and the company must maintain accounting records, however, the records for an individual/RESICO are cheaper. Invoices: Both RESICO and the company must issue invoices for the income they receive. Retention: If you perform your professional activities as an individual through RESICO and contract with companies, they must withhold 1.25% of income tax and 2/3 parts of VAT, which represents a disadvantage, as you will not be able to claim these payments against your expenses (which companies can). Risks: As discussed, an individual who performs activities as RESICO is personally responsible for their business, meaning that if something goes wrong, they could be sued and their house could be seized, for example. Requirements for RESICO: To be registered with RESICO, you must provide/sell services/goods independently (not as an employee), not participate in any society as a partner/shareholder, not receive income equivalent to salaries, and earn less than $3,500,000 per year. Company Officials: If you want to open a company, you must appoint officials: Administrators/managers (At least 1 who can be a partner/shareholder, they manage the day-to-day operations of the company) and in the case of SAPI and SA Commissioners (Typically the accountant and they monitor the actions of the administration). Evaluate what is best for you. #Thursdayof #Legaldoubts #BLPAdvisors #Thelegalsartupforstartups

"Article 1... Any of the companies referred to in fractions I to V and VII of this article may be established as a variable capital company, in which case the provisions of Chapter VIII of this Law shall apply." Companies regulated by the General Law of Commercial Companies may be established under a regime called Variable Capital. It should be noted that the Cooperative Society, as referred to in fraction VI, is not regulated by the General Law of Commercial Companies.In practice, most companies are established as variable capital companies (whether they are SA, SAPI or S de RL). Being a variable capital company means that these companies can decrease and increase their capital with fewer formalities than if they were not. As we will see, there are certain formalities required for the increase or decrease of capital, such as having to go before a notary to protocolize the act in the case of SA and SAPI at least (it should be noted that in increases, the notary charges a percentage on said increase). The increases and decreases of capital for practical purposes mean that the company has new investments (which can be made by shareholders or by new investors) or in its case, that part of the investments will be withdrawn, this can happen because a shareholder is leaving the company or because it is financially beneficial to withdraw money through the decrease (this works when the income is not much higher than the company's capital). At the time, we will deal with these issues in more detail, but initially the variable capital serves to avoid notarial costs, procedures such as the publication of notices and to be able to increase or decrease the capital with the approval of the majority of the votes instead of 75% (which is not always recommended but can always be corrected even if the society is of variable capital) To be continued... #Wednesdayof #Corporatelawin3mins #BLPAdvisors #Thelegalstartupforstartups

Within commercial societies, capital societies and personal societies are distinguished. In the first, the most important thing is the contributions/assets that the society has and not who its members are, and the way of dividing the property is done through shares. In the second, the most important thing is who the members of the society are and not the assets they have, and the way of dividing the property is done through partnership shares. In personal societies, partners are generally responsible for the society's obligations with their own personal assets, and in capital societies, shareholders' responsibility is generally limited to the investments made. Within capital societies, we find: the anonymous society and SAPI (regulated in LMV for historical reasons that will be analyzed). Within mixed societies (meaning, they have some characteristics of personal societies and some of capital societies), we find: the limited liability society, the simplified joint-stock society, the simple partnership society and the partnership society by shares. Within purely personal societies, we find the collective name society (the cooperative society will not be the subject of analysis for the purposes of these publications). In my opinion, the only societies that have practical utility currently are: Promoting Investment Anonymous Society: the best option, as it is the most flexible society and the most friendly to investment. It is regulated in a practically equal way to the anonymous society, except for some distinctions that we will see in more detail later, such as: Obligation to have a board of directors. Lower percentages for minority rights. Possibility of agreeing on a "non-compete" clause. Possibility of limiting or expanding profits for some class of shareholders and; Possibility of buying its own shares (they become treasury shares). Anonymous Society: Almost as flexible as SAPI, also a great option for starting a business. Limited Liability Society: Although it is a mixed society and less flexible than the anonymous society and SAPI, it allows limiting the partners' responsibility to the investments/contributions that they are required to make. It has the advantage that it does not require a commissioner and can have tax advantages if it is a subsidiary of a US company, as it can operate as a transparent society. Simplified Joint-Stock Society: For very basic purposes, although we do not recommend it at all and think that it requires a wide modification. Advantage - Free, only requires one shareholder and it can be established online. Many disadvantages to be analyzed. To be continued...

Simply, this is a great book for anyone who wants to start a project, study success and/or improve their corporate practices. Ray Dalio is one of the wealthiest people in the world and is known for founding and leading Bridgewater Associates, one of the most relevant investment funds. The first part of the book is his autobiography, reviewing the relevant episodes of his life from 1949 to 2017 retrospectively. This first part has great value to understand the milestones that led Dalio to his success and shows how failure and effort are always an important part of any entrepreneurial story. Parts II and III refer to the personal and work principles that Ray has been building throughout his life and that have allowed him to achieve the life he has. Life Principles: * Accept and deal with reality. * Use a 5-step process to get what you want from life: Have clear goals. Identify and do not tolerate problems that obstruct your way to achieving goals. Diagnose problems accurately to eliminate them at their roots. Design plans that will help you overcome problems. Do what is necessary to convert designs into results. * Be radically open-minded. * Understand that people think very differently. * Learn how to make effective decisions. Work Principles: *Culture Understand culture well. Trust in radical truth and radical transparency Cultivate meaningful work and meaningful relationships Create a culture where it is okay to make mistakes and unacceptable not to learn from them Synchronize and stay synchronized Credibility weighs in your decision making Recognize how to go beyond disagreements * People's well-being Remember that WHO is more important than WHAT Hire well, because the penalties for hiring badly are enormous Train, test, evaluate, and constantly classify people. * To build and evolve your machine... Manage as someone who operates a machine to achieve a goal Perceive and do not tolerate problems Diagnose problems to get to their roots Improve the design of your machine to solve its problems Do what you set out to do Use tools and protocols to shape how work is done And for God's sake, do not overlook corporate governance. #Blpadvisors #Thelegalstartupforstartups https://www.amazon.com.mx/Principles-Life-Work-Ray-Dalio/dp/1501124021

Sencillamente este es un librazo para todo aquel que tenga ganas de iniciar un proyecto, estudiar el éxito y/o mejorar sus prácticas corporativas. Ray Dalio es una de las personas más ricas del mundo y, es conocido por haber fundador y dirigido Bridgewater Associates, uno de los fondos de inversión más relevantes. La primera parte del libro es su autobiografía, repasando los episodios relevantes de su vida desde 1949 hasta 2017 en retrospectiva. Esta primera parte tiene mucho valor para entender los hitos que llevaron a Dalio a su éxito y muestra como el fracazo y el esfuerzo son siempre una parte importante en toda historia de emprendimiento. Las Partes II y III se refieren a los principios personales y de trabajo que Ray ha ido construyendo a lo largo de su vida y que le han permitido lograr la vida que tiene. Principios de vida: * Aceptar y lidiar con la relaidad. * Utilizar un proceso de 5 pasos para obtener lo que quieres de la vida: - Tener objetivos claros. - Identificar y no tolerar problemas que obsturyen tu camino para obtener objetivos. - Diagnosticar de manera acertada los problemas para eliminarlos en sus raíces. - Diseñar planes que te hagan superar los problemas. - Hacer lo neesario para converitr los diseños en resultados. * Ser radicalmente de mente abierta. * Entender que la gente piensa de manera muy distinta. * Aprender que a tomar decisiones efectivas. Pincipios de trabajo: * Cultura - Entender bien la cultura. - Confía en la verdad radical y la transparencia radical - Cultivar un trabajo significativo y relaciones significativas - Crear una cultura en la que esté bien cometer errores e inaceptable no aprender de ellos - Sincronízate y mantente sincronizado - La credibilidad pesa en su toma de decisiones - Reconocer cómo ir más allá de los desacuerdos * Bienestar de la gente - Recuerda que el QUIÉN es más importante que el QUÉ - Contrata bien, porque las sanciones por contratar mal son enormes - Capacita, prueba, evalúa y clasifica constantemente a las personas. * Para construir y evolucionar su máquina... - Administra como alguien que opera una máquina para lograr un objetivo - Percibe y no toleres los problemas - Diagnostica problemas para llegar a sus raíces - Mejora el diseño de tu máquina para solucionar sus problemas - Haz lo que te propusiste hacer - Utiliza herramientas y protocolos para dar forma a cómo se realiza el trabajo **Y por el amor de Dios, ¡no pases por alto el gobierno corporativo #Blpadvisors #Thelegalstartupforstartups https://www.amazon.com.mx/Principles-Life-Work-Ray-Dalio/dp/1501124021