The Mexican General Law of Business Corporations | Annual General Meeting.

Is your business prepared to comply with the Annual General Meeting requirements to avoid potential legal or operational risks?

Compliance with the Annual General Meeting is an essential requirement for business corporations, established under The Mexican General Law of Business Corporations. This requirement aims to ensure transparency and proper governance of corporations. Below are the key aspects:

1. Legal Requirement

Corporations (known in México as Sociedades Anónimas S.A.) and other corporate entities must hold at least one ordinary general meeting per year.

In Mexico, Article 181 of The Mexican General Law of Business Corporations requires that this meeting must take place within four months following the close of the fiscal year.

2. Purposes of the Annual General Meeting

The following matters must be addressed:

● Approval of Financial Statements: Shareholders review and approve the financial results of the previous fiscal year. ● Report from the Board of Directors or Sole Administrator: This includes financial status and relevant operational aspects. ● Profit Distribution: Decisions are made regarding reinvestment, dividend distribution, or reserve allocation. ● Appointment or Ratification of Directors and Statutory Auditors (if applicable). ● Other Matters: Any additional items stipulated in the articles of incorporation or corporate bylaws.

3. Meeting Preparation

● Notice of Meeting: ○ Must be issued in advance (as stipulated in the bylaws, typically 15 to 30 days before the meeting). ○ Should include the location, date, time, and agenda. ● Preparation of Documents: ○ Financial statements. ○ Administrator or board report. ○ Shareholder list with voting rights.

4. Conducting the Meeting

● Quorum: The quorum established in the bylaws must be met for the meeting to be valid. ● Decision-Making: Decisions are typically made by majority vote unless specific matters require a special majority as per the bylaws. ● Meeting Minutes: Minutes summarizing the resolutions must be recorded. These should be registered in the corporation's minute book and, in some cases, notarized.

5. Consequences of Non-Compliance

Failure to comply with this obligation may result in:

● Inability to distribute dividends. ● Internal disputes among shareholders.

At ASCG, we specialize in assisting businesses in meeting their legal obligations, including compliance with the Annual General Meeting requirements under The Mexican General Law of Business Corporations. Our team of experts can guide you through the process, ensuring that your meetings are conducted efficiently and in full compliance with the law. Contact us today to learn how we can support your company in staying compliant and avoiding potential risks.