Requirements for a Limited Company: Everything they haven’t told you

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In the world of negotiation, it is necessary to establish strategies that help us to grow our society. Do you want to know the requirements for a Limited Company? Find out everything they haven’t told you here!

What is a Limited Company?

Is that which allows its partners to be conformed in a capitalist society, that is to say, each one of them, which can be three or more, participate through titles of credits, called actions. The shares differ from each other by their nominal nature or by the freedoms that they allow.

Notably each of the partners or shareholders of the Public Limited Company, do not respond with other assets other than the one contributed to the formation of the same, which is regulated in accordance with the provisions of articles 87 to 206 of the General Law of Mercantile Societies (LGSM ).

Requirements for a Limited Company

In the General Law of Commercial CompaniesIn articles 6 and 89, it is indicated that the requirements for the formation of a Public Limited Company are:

  • First of all, indicate your company name.
  • After that, the address and the corporate purpose.
  • Then specify if it contains the clause where article 15 of the foreign investment law is exposed, referring to the exclusion of foreigners.
  • Next, it can be indefinitely.
  • At a minimum, it must be made up of two partners.
  • That is when, must own a specified amount in the contract.
  • Own at least 20% of the value of each share must be paid in cash.
  • Just as each partner is in the obligation to subscribe at least one share.
  • That is to say, the initial capital will be registered, which means that each of the partners will have the obligation to pay, even if they do not do so at the same moment that the company is subscribed.

Steps to follow to create a Limited Company

Public limited companies are established under two parameters, According to what is established by the law that regulates them, that is, the LGSM:

  • Instant or simultaneous: Having already the project, the partners must go to the notary public to sign the contract of the company, in which it is highlighted that the capital is satisfied with the contribution of its members without the need for public participation (LGSM in its article 5) .

Just as it also arises from the protocolization of the meeting minutes constitutive.

  • Public or successive subscription: For the conformation of the social capital, it is necessary to attract investors who add an economic contribution to the initial capital since that will be the adhesion to the company, as established in the articles that go from 92 to 102 of the General Law of Mercantile Societies.

Characteristics of the Stock Company

They are recognized in México as characteristics of public limited companies, the following:

  • Commitment limit first of the members of the company before third parties.
  • Then the distribution of share capital.
  • Following the same order of ideas, the existence of the particular denomination.
  • It is also noted that it is a capitalist type society.
  • It should be noted that it has the facility of stock trading.
  • Has an organizational structure impersonal.

What are the obligations and rights of the partners?

1.- Obligations: The only thing that the partners must comply with is to cover the contribution to the social entity at the agreed time.

2.- Rights:

They are classified into:

  • Patrimonial: It refers to the participation that the partners will have with respect to the profits that the companies receive on an annual basis as well as in the final installment of the liquidation, according to their contribution to the capital.
  • Corporate: In this particular, the partners have the right to participate by occupying important positions in the administration of the company, as well as to participate in the elections that are carried out by means of a vote always proportional to their shareholding.

What are the modalities of the Public Limited Company?

1.- Variable Capital: The public limited company with variable capital (SA de CV) is one that arises according to the depreciation or increase of the capital stock.

2.- Investment Promoter: The investment promoter corporation (SAPI) is presented under the structure of two or more legal or physical persons, which make up a legal person in México, whose purpose is to carry out commercial activities that transfer corporate and economic rights to shareholders.

This model uses the dynamics of the joint-stock company common and adapts it to their needs, organizes it, develops it, making it more dynamic, apart from giving the partners certain advantages, which we will mention below:

  • It also Boosts the experience that grants a corporate governance.
  • We can say that it has the components for protection of minorities.
  • It can be defined that it has various forms of manifestation of the information.

3.- Stock Investment Promotion Company: A stock investment promoter company can become a company that intervenes in the stock market in the future, this being considered an advantage since it will allow the growth and development of capacities within the company.

Amount necessary to set up a corporation

It is necessary to mention and make it clear that the capital of the company anonymous It is the one contributed by each of its partners, who will respond to debts contracted with third parties with said capital and not personally.

Right at the moment the company is established, and the initial capital contributed by two or more partners is owned, the Law does not require a specific amount to create a commercial company, but if the number of shares, the percentage and the amount must be established, the following example shows:

Partner 1

Partner 2 Partner 3

25 shares

40 shares

35 shares

25%

40%

35%

2,500.00 pesos 4,000.00 pesos

3,500.00 pesos

Advantages and disadvantages of forming a Public Limited Company.

1.- Advantages:

  • Can be done freely transfer of shares without dissolving the company.
  • You do not necessarily have to be a shareholder to be the administrator of the company.
  • A person or a group they can assume the administration of the company, that is, it can be sole proprietorship.
  • Also the partners they have the right on the assets of the company.
  • That is, no maximum limit of partners.
  • There is no maximum capital to constitute a society.
  • The partners have no obligation with social debts.
  • The contribution to share capital on the part of the partners is directly proportional to their obligations.
  • Once the company is incorporated You can access credits in financial institutions.

2.- Disadvantages:

  • Sometimes when capital of the partnership is not enough to cover the debt expenses, the partners will be forced to commit their capital to cancel the debt incurred.
  • Must the statutes be updated and modified, whenever there are changes in the organization.
  • Discussions in meetings by the partners they tend to delay decisions, which are reached by voting, whether they are in favor or against and whether they consider whether it is feasible or not.

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