Corporate Practice Group I November 9th, 2023

Amendment to the General Law of Commercial Companies to Hold Meetings through Electronic Means

On October 20, 2023, a decree (the “Amendment”) amending several provisions of the General Law of Commercial Companies was published in Mexico’s Official Journal of the Federation (DOF). This Amendment establishes a legal framework enabling corporate acts to be carried out by electronic means and outside the company’s statutory domicile. 

As a result of this Amendment, companies will now be able to, among others, hold:

1. Partners’ meetings (in the case of limited liability companies – S. de R.L. de C.V.) or shareholders’ meetings (in the case of corporations – S.A. de C.V.) through the use of electronic, optical or any type of media;

2. Meetings of the company’s administrative body (board of directors or board of managers) through the use of electronic, optical or any type of media;

3. Partners’ or shareholders’ meetings outside the company’s statutory domicile, as long as it is approved by all the partners or all shareholders.

The Amendment became effective on October 21st, 2023, except for the amendments related to calls for partners’ meetings for limited liability companies (S. de R.L. de C.V.) through their publication in the Ministry of Economy’s electronic bulletin, which will become effective six months after October 20th, 2023.

The Amendment establishes several requirements for holding virtual meetings, such as:

• It should be permitted by the company’s bylaws;
• The electronic means must allow for the participation of all attendees in the applicable meeting;
• Participation in the meeting must be in real time and permit interactions in a manner equivalent to an in person meeting;
• Mechanisms must be put in place to allow the access and correct identification of the attendees, as well as confirmation of their vote (if necessary) together with the corresponding evidence.

Each company should evaluate its specific circumstances to determine if it would be beneficial to amend its bylaws. Considering the recent approval and implementation of the Amendment, it is uncertain if the practice of recording video calls or audioconferences as a method to verify the attendees’ identities, register votes and establish recorded content as admissible evidence in legal proceedings can withstand legal challenges.

It is important to note that the Federal Civil Code and the Commercial Code already recognize the use of “electronic, optical or any other technology” and have established principles governing their use.

Therefore, to ensure compliance, companies must adhere to the requirements already established in Mexican law, including the standards in NOM-151-SCFI-2016 regarding data message preservation and document digitization. Likewise, companies should continue to include the partners’ or shareholders’ tax ID number in the company’s corporate books and include the tax ID of the attending partners or shareholders in the corresponding meeting minutes, as required under Article 27 paragraph B, section V of the Federal Tax Code.