Understanding Corporations: Concepts, Articles, and Organs

Posted on Apr 3, 2025 in Law & Jurisprudence

Corporation Basics

1. Concept

A corporation operates under a specific name and is composed of partners whose liability is limited to their payment for shares. Key elements include capital and partners. A corporation can exist under a specific designation.

2. Articles of Incorporation: Legal Requirements

The legal system mandates the following in the articles of incorporation:

  1. Capital must be exhibited.
  2. The number, nominal value, and nature of the shares.
  3. The form and terms of dividends payable on unpaid portions of shares.
  4. Participation granted to founders in charge of utilities.
  5. The appointment of one or more commissioners.
  6. The powers of the General Assembly, deliberations, voting rights in rem, or special restrictions.

3. Capitalist Trading Company: Social Capital

  • Shares instruments: Nominative instruments that serve to accredit and transmit partner rights.
  • Prohibition on a corporation purchasing its own shares.
  • Other receivables analogous or related to:
    • Founder bond coupons.
    • Interim certificates.
    • Benefit shares.
    • Obligations.
    • Stock certificates.
    • Warrants.

4. Organs of the Corporation

  • Supreme Body: General Assembly of shareholders, which agrees to and confirms all acts and operations.
  • Representative Body: The governing body is the representative, limited by law or contract.
  • Supervisory Body: The commissioner or commissioners.

5. Forms of Constitution

  • Appear before the notary public: The only legal way; one becomes a shareholder, the deed is granted, and a permit is managed.
  • Public subscription: Exists in Mexican practice for tank projects, training, and storage of future contributions within a year.

6. Assembly of Shareholders

  • Constituency: When subscription is given in the public subscription.
  • Ordinary: Must meet at least once a year.
  • Extraordinary: Addresses mandatory issues of greatest importance.
  • Mixed: Convened to hear matters within the ordinary scope.
  • Special: Implies a single meeting of shareholders.
  • Invalidity of assemblies: Engage in ordinary commercial trial.
  • Opposition: Trial of opposition when it is contrary to legal principle.
  • Challenge of agreements: Must be submitted within 15 days following the closing of the assembly.

7. Meetings

General Information Systems (GIS) are needed as:

  • Requirements: Must be published in the Official Gazette.
  • Quorum of presence: Most assistance, at least half.
  • Quorum: Most of the voters present.
  • Quorum of presence according to the law: At least half.
  • Quorum under the law: Roughly half of the capital.

8. Administrative Bodies

  • Board: Contains characteristics of the charge, operating the business requirements, internal and external functions, appointment of administrators of alternate operating responsibilities.
  • Sole Administrator: Makes decisions when it suits them, holds responsibility for the majority of the shares.

9. Supervisory Authority

  • Collegiality or individual: Derives from the existence of a series of actions.
  • Characteristics of post: Temporary and revocable Commissioner, paid, entrusted to an individual.
  • Requirements: Disabilities.
  • Features: Monitor the operations of society.
  • Duties and powers: Administrators require the balance monthly, examine the books and papers of operations.
  • Responsibilities: Will be individually responsible to society for the fulfillment of obligations.

10. Character of Shareholders

  • Rights:
    • Corporate: Usufruct, pledge, however reported, trust, deposit, hereditary succession pact vote.
    • Equity.
    • Participation in Utilities.
    • Participation of Liquidation.
  • Obligations:
    • Economic: Perform promised contribution.
    • Extrapatrimonial: Abstain from voting if an assembly is contrary.