Starting A Business In Mexico Through A Shelf Company
A shelf company is a company or corporation that has had no activity. The company can then be sold to anyone who wishes to start a company without going through all the hassle and procedures of creating a new one. Starting a business in Mexico this way can be relatively fast.
Here's how the purchase of a shelf company works.
Purchasing The Equity Stock
The first step of the legal process is to sign a contractual agreement where the current shareholders will sell their shares in the company. For this, we need that all parties involved sign, so we will send the contract via FedEx to whomever the new shareholders will be. They need to sign it and send it back to us.
This agreement is conditioned to the payment transfer via an agreed-upon method. This means that the new shareholders fully own the company once the contract has been signed and the payment has been transferred. However, this must be formalized in a shareholders' meeting before a Notary Public.
Announcing The Transfer Of Ownership
Some formal decisions in a Mexican company must be submitted to a vote, and the Minutes of that meeting must be formalized before a Notary Public. Companies have two types of shareholders' meetings, ordinary and extraordinary.
The first step is to call this meeting, where the current shareholders will agree upon the following decisions. Due to the matters discussed in this meeting, it must be extraordinary. In this meeting, it will be announced that the ownership has been transferred to someone else. Also, the new owners will inform the following decisions in the company.
- The name of the company shall change (The name needs to be authorized by the Ministry of Economy)
- The company's purpose shall change.
- The current Director and any other legal representatives in the company shall cease their charges and forgo their faculties in the company.
- A new Director or Board of Directors of your choosing shall take control in their stead.
- The address of the company will change.
Change Of Name
If you wish, you can keep the current name of the company. However, if you wish to change the name, the new name needs to be approved by the Ministry of Economy. It's a good idea to choose at least five variations of the name you wish because sometimes they get rejected.
Change Of Address
Mexican law does not allow virtual addresses. You must lease a physical place as a registered address for the company.
Change Of Company's Purpose
It is most likely that the purpose of your operation will not be the same as in the company you are buying. Therefore, the same shareholders' meeting takes the decision to change the company's purpose. We will send you a form for you to let us know what your company's purpose is.
Substitution Of Board of Directors
Another of the extraordinary decisions that will be taken in the shareholders' meeting is the cease of the current Directors' activities and their substitution by Directors of your choice. A foreigner can occupy this position. However, for a foreigner to exercise his faculties, he would need to have a Mexican Tax ID; to obtain it, he needs to be a resident.
You can also assign "Special Managers," a figure that grants certain powers to a person for five years. Such power or powers are given to persons performing specific activities in Mexico. Such capabilities may involve the following actions: Collection, Administer, Labor Administration, Performing acts of Ownership, Opening Bank Accounts, Subscribing, Endorsing, and Guaranteeing all kinds of Negotiable Instruments and Gran General and Special Powers.
However, a company cannot fail to have a legal representative with a Mexican tax ID at any moment without getting the bank account frozen, so by the moment the formalization is done; you have to have someone designated. It's crucial to know this when starting a business in Mexico.