On October 20, 2023, an important Decree was published that amends several provisions of the Mexican General Corporations Law (“LGSM”). The purpose of these reforms is to modernize and make more flexible the way in which companies can hold Shareholders’ Meetings and the Sessions of the Board of Directors in order to obtain electronic signatures of the minutes of such meetings.
In addition, the possibility of holding meetings outside the registered corporate? address is now introduced in any case, as long as the shareholders approve it in its entirety.
In order for Mexican companies already incorporated to adopt these measures, they must amend their by-laws.
These amendments are applicable to Limited Liability Companies (LLC /S de R.L.?) and to Public Limited Companies (PLC S.A.).
What requirements must be met for Meetings or Board Sessions to be held by electronic means?
In order to hold Shareholders’ Meetings and Sessions of the Board of Directors, three requirements must be met: (i) they must be held simultaneously, through the use of any electronic means or real-time technology through digital platforms; (ii) they must allow interaction in the deliberations as if they were held in person; and (iii) they must allow the identification of the participants.
Is it necessary to record the meetings or sessions held by electronic means?
In this regard, as a security measure and in order to provide full legal certainty as to their conclusion, VAHG recommends obtaining authorization for the recording of the Shareholders’ Meetings or Sessions of the Board of Directors and safeguarding said files in order to be able to have evidence at a later date. This condition would entail the amendment of the Company’s bylaws to provide for and allow the recording of the Shareholders’ Meetings or Sessions of the Board of Directors, as long as it is authorized prior to initiation by a majority vote of those present.
Can the minutes of the meeting or session be signed electronically?
Indeed, with the reform of the LGSM it is now possible that the minutes of the meeting or of the administrative body can be signed by electronic means, this will have to be provided for in the bylaws of the company. The electronic signature must comply with the requirements established in the corresponding Mexican official standard NOM-151-SCFI-2016.
A deadline is now also established for the holding of meetings. The term for the publication of the notice for the holding of Shareholders’ Meetings or Sessions of the Board of Directors will be the one established in the bylaws and in its absence 8 days in the case of a Limited Liability Company (S de R.L.) and 15 days in the case of a Public Limited Company (S.A), and the companies may agree that the Shareholders’ Meetings and the Sessions of the Board of Directors may be held with all or part of its attendees through the use of electronic means or technology.
These reforms represent an important step towards the modernization and adaptation of business practices in Mexico, allowing greater flexibility in the conduct of meetings and the use of technology in business processes.
At VAHG we are ready to support you in adapting your company’s bylaws to take advantage of these new tools.
We are here to help our clients and friends. If you need assistance or have any questions, please do not hesitate to contact us at the following addresses:
| MBA, MD & Commercial Notary Public
Fernando Hernández Gómez| Senior Partner +52 (33) 38171731 Ext 225|fhernandez@vahg.mx |
Ana Karen Inzunza Sánchez| Senior Associate
+52 (33) 38171731 Ext 235|ainzunza@vahg.mx |
| Elvia del Carmen Ríos Saldaña| Partner
+52 (33) 38171731 Ext 228|erios@vahg.mx |
María Inés Pujol Estrada| Senior Associate
+52 (33) 38171731 Ext 226|mipujol@vahg.mx |
**The publication of this document does not constitute legal, accounting or professional advice of any kind, nor is it intended to be applicable to particular cases. This document only refers to laws applicable in Mexico.