Do you have a company in Mexico that you need to dissolve? Although dissolution is not form driven like it is in the USA, there are prescribed steps to dissolving a company in Mexico. Also, in 2018, the Mexican government instituted a streamlined dissolution process for companies meeting specific criteria.
Information to have at hand before embarking on the dissolution process:
• The reason for dissolving the company.
• Is the company in good standing?
• A copy of the company’s bylaws
• Contact information for the location of the company and accounting books/records/filing information
• Information on shareholders/partners, including any foreign ownership
• Evidence of tax filings at the SAT/Mexican IRS and the availability of the electronic signature
• Details on the company’s assets, debts and/or employees
• When or if the company ceased operations and issued its last electronic invoice
This information will allow local counsel to estimate the costs and map out the steps needed to formally dissolve.
The process of formal dissolution will vary depending on the type of company and ownership structure, but generally, it involves drafting resolutions approving the liquidation, appointing a liquidator, wrapping up all the company’s debts and obligations and notification of relevant Mexican agencies of the dissolution. Like many countries, publication of the company’s dissolution in the official gazette is required. There are a lot of agencies and bureaucracies involved in ensuring that the dissolution process is completed correctly. It can take from a few months to about a year from initial preparation of documents and filings for the formal dissolution to be completed.
In 2018, the Mexican government instituted a streamlined procedure for dissolution through the Electronic Publication System of Commercial Companies or PSM in Spanish if the company:
• Has partners or shareholders who are individuals, not companies.
• Is not engaged in illegal activities.
• Publishes its current share structure in the PSM at least 15 business days prior to the date of the meeting through which the dissolution is agreed.
• Has ceased operations and has not issued electronic invoices for two years.
• Is up to date in compliance with its tax, labor and social security obligations.
• Has no outstanding obligations with third parties nor is in bankruptcy.
• The legal representatives are not subject to criminal proceedings for possible tax or property crimes.
• Is not a financial entity.
For assistance with dissolution or if you need to explore your options for dissolution, please contact IBCF for more information.