Pro's and con's for corporation types in Mexico

Sociedad Anónima (equivalent to a U.S. Corporation)

• Requires at least two shareholders
• Requires a Statutory Examiner
• Is governed by a Sole Administrator or a Board of Directors
• Needs to hold yearly shareholders’ meetings at the latest by April 30 of each year

 Pros:

• Legal form internationally known and easily understood abroad
• No limits on the number of shareholders or maximum revenues
• Shareholders’ liability limited to the amount of the subscribed share capital
• Easy transfer of shares from one shareholder to another
• Possibility to be listed on the stock exchange

Cons:

• Mandatory Statutory Examiner (internal audit) and mandatory yearly shareholders’ meetings
• Dividends are subject to income tax (double taxation effect)​

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Sociedad de Responsabilidad Limitada (Limited Liability Company)

• Requires at least two partners, maximum 50 partners
• Does not require a Statutory Examiner
• Is governed by one or several General Managers
• Needs to hold yearly partners’ meetings on the date stipulated in the by-laws

 
Pros:

• Partners’ liability limited to the amount of their subscribed capital
• Whereas the Company is subject to Mexican income taxes on its profits, a Mexican Limited Liability Company may qualify as a pass-through pursuant to the tax laws of its parent company

 
Cons:

• Capital contributions are not easy to transfer to another person.  Remaining partners have a statutory right of first refusal
• May not be listed on the stock exchange
• Profit distributions to partners are subject to income tax by the partners and to income tax by the Company (double taxation effect).

​Sociedad por Acciones Simplificada (SAS) (Simplified Corporation)

• Requires one or several shareholders

 
Pros:

• Easier and cheaper set up and maintenance than a regular corporation
• Shareholder liability limited to subscribed share capital
• Easy transfer of shares from one shareholder to another

Cons:

• Maximum total gross revenues limited to 5 million Mexican Pesos
• Restrictions on the participation of SAS shareholders in other companies​
  

All types of companies may provide for an authorized capital (capital variable) in their by-laws that facilitates a capital increase or capital reduction.