Shelf Company or Aged Shelf is a company that is established to get benefits later. A company is established, put on a shelf and to be used in the near or far future. It’s just like a ripening fruit or the best example is the aging vine.
With every passing day, the Shelf Company becomes mature, worthy and more beneficial for the new owner. In some states they aren’t much regarded because of the fraudulent activities been reported in the past whereas in some states they are being sold and purchased without an issue.
We have dedicated this piece of writing for Mexico LLC companies, how good are these for business and all the important stuff one must want to know. Limited Liability Companies in Mexico are called as Sociedad de Responsabilidad Limitada and shortly they are known as (S.de R.L.).
What so special about Mexico LLC?
Mexican (S.de R.L.) enjoys the same perks as LLC in America because it’s the counterpart of American LLC. Mexico LLC have a number of due to which new company owners are interested in Mexico LLCs. There is no need to be in the Mexican state to operate the business. Enjoy the perks of Limited Lability Company while living in another state or country.
Best utilization of Mexico LLC
Mexican LLCs are best to be the subsidiaries of international companies because the owner’s presence is not required. It’s a good option to own stocks in the corporation. Mexico LLC can serve well as a dedicated business body for imports and exports. It can also be formed to hold a company for global assets. Dedicate limited Liability Company is also a sound option for Joint Ventures.
LLC Registration Flow
The entire registration process starts with the name of the company. There a few conditions needed to be fulfill while proposing a company with a name. One of these conditions is to add an ending suffix Sociedad de Responsabilidad Limitada (S.de R.L.) which is equal to LLC in case of Limited Liability Company.
Get signature and attestation on the detailed Article of Incorporation from Federal Mexican Ministry of Foreign Affairs. Basically the Article of Incorporation contains all the necessary details, purpose, and activities of the business on the basis of which the company will perform its operation.
Once the Article of Incorporation is signed it gives you a green signal as it is signed by many bodies including ministry of treasury and ministry of Commerce. So getting their approval and signature means a green chit.
Management:
LLC must be managed by an administrator, manager or a dedicate member from board of directors.
Governing Bodies:
LLC must have 2 members and at most it can have up to 50 members.
The Appointment of Registered Agent
The appointment of registered agent is vital. The company must have a registered agent. If the owner is not residing in the same state then it’s important to have registered agent. Even if the owner resides in the same state, appointing a registered agent is good because they take care of legal process in case of a lawsuit etc.
Appointment of Auditors
Shareholders can appoint auditors or auditor firm of their own choice. A person having any kind of voting rights of the company cannot be an Auditor of the company.
Shareholders Meeting
Unlike corporations, LLC doesn’t require frequent meetings. It’s understood that the governing and management structure of LLC is brief so the concept of thorough and frequent meetings doesn’t make good sense.
What are the advantages of Mexico LLC
Foreign ownership is an amazing advantage for owners to think about Mexico LLC. It’s helpful to broaden your business and companies across various places. It increases business ease and encourages businessmen to establish businesses.
Shareholders have limited liability on the company shares they are holding. In simple wording it means that the personal assets of shareholders are protected from company liabilities.
An idea business model for small startups because on at least 2 individuals can form a Limited Liability Company and you can with as less as one manager.
The LLC can be managed by one manager or one board of director as well so there is no confusion and complexity whatsoever in the governance of the company.
The shares of the company can be sold out with the approval of stockholders. The second condition to sell the shares is the case when company is dissolved.
What are the disadvantages of Mexico LLC?
We have enough discussed the pros and advantages of Mexico LLC now it’s time to have a look on the disadvantages as well.
There are a few confusions for those having multiple LLCs across multiple states because different states have different rules and regulations for operation.
The company’s existence fells in danger after the death of company owners which give birth to some complexities.
Lack of ownership ease is one of the biggest difficulties associated to Mexico LLC. Sometimes small companies are formed and created to flip in order to generate wealth or there may be another reason.
State laws variations make it difficult and hectic to operate the business across the country with overlapping of rules of different states.
Expansion challenges because you cannot sell LLC shares in stock exchange so raising capital is a difficult objective to achieve.
Because of the brief governance and administration, you’ll have more administrative duties on your shoulders.
Annual economic reports must be submitted. The annual reports must contain the total swell in assets, total liabilities, total income (in the country and abroad), and expenses.
Conclusion
It’s a pertinent question to discuss while talking about Mexico LLC because it’s best suitable for small companies. It supports the minimum no of shareholders from 2 to 50. So the bottom line is, for bigger companies Mexico LLC doesn’t suit that much.
Here’s the second situation, even if you have a bigger company with less number of shareholders then it will work fine in such a situation as well. In Mexican LLC structure it’s mandatory to the general partners meeting which is the same as shareholders meeting and administrative body. The meeting is conducted by either a sole proprietor or a board of managers.
