|On October 20, 2023 a decree that amends various provisions of the General Law of Commercial Companies (Ley General de Sociedades Mercantiles – “LGSM”) to allow the use of electronic or technological means for holding shareholders or partners meetings, as well as meetings of management and oversight bodies of commercial companies was published in the Federal Official Gazette (Diario Oficial de la Federación). |
Why is it relevant?
The decree amending the LGSM has the following objectives:
1) Enabling electronic, optical, or any other technological means as equivalent to physical presence in shareholders or partners meetings.
2) Allowing shareholders or partners meetings, as well as meetings of management and oversight bodies, to be held either entirely or partially through in-person or virtual attendance using any electronic or technological means.
3) Preserving the principles of full equivalence between the use of traditional and electronic or technological means, as well as technological neutrality as provided for by the Commercial Code and Federal Civil Code.
4) Regulating the use of electronic or technological means for the conduct of meetings, including documenting minutes, records, and other documents, which are already contemplated in the Commercial Code and Federal Civil Code.
5) Relaxing the requirement for holding meetings at the corporate domicile, allowing shareholders and partners to agree on a case-by-case basis to hold meetings outside the corporate domicile while safeguarding the right and possibility for each shareholder or partner to attend such meetings through electronic, technological, or in-person means.
When does it come into effect?
According to the provisions of the first transitory article, the decree will come into effect the day following its publication in the Federal Official Gazette. In other words, the amendment to the LGSM will come into effect on October 21, 2023.
It is important to mention that to use electronic or technological means for holding meetings, including shareholders or partners meetings, as well as meetings of management and oversight bodies, companies must first amend their bylaws.
For more information regarding the implications of the reform, as well as for its proper implementation, you can contact the partner in charge of advising you in matters related to corporate law.
You can consult the publication of the decree at the following link: https://www.dof.gob.mx/nota_detalle.php?codigo=5706076&fecha=20/10/2023#gsc.tab=0