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28 Tul. L. Rev. 45 (1953-1954)
Capital Structure of Mexican Corporations

handle is hein.journals/tulr28 and id is 63 raw text is: THE CAPITAL STRUCTURE OF MEXICAN CORPORATIONS HENRY PAINE CRAWFORDf I. SCHEMATIC OUTLINE In order to form a corporation in Mexico under the general cor- poration law of that country it is necessary (1) that there be five incorporators as a minimum and that each subscribe to at least one share of capital stock, (2) that the social capital (capital social) be not less than 25,000 pesos fully subscribed, (3) that there be an actual payment in cash (dinero efectivo) of at least twenty per cent of the value of each unpaid share payable in money (cada acci6n pagadera en numerario), and (4) that the value of each share pay- able in whole or in part in things other than money be fully paid.1 This is the schematic outline of the Mexican trading or indus- trial corporation. There is nothing mysterious about Mexican cor- poration law. Although it is strange to the foreigner it is sound law and in some ways offers the shareholder greater protection and more active participation in the management of the enterprise than the corporation laws of the several states of the United States.2 II. CAPITAL AND CAPITAL STOCK The number one requirement in the formation of a Mexican corporation that there be at least five incorporators and that each subscribe to at least one share of stock is elementary law and needs no further comment. The number two reference to social (i. e., cor- porate) capital, however, immediately raises questions as to what tMember of The State Bar of California (active) and of the Bars of the District of Columbia and Georgia; for other articles on Latin American cor- poration and insurance law by the same author, see Tulane Law Review, Vols. X, XI, XII, XIII, XIV, XVI, XVII, XVIII and XXVII. EDITOR'S NoTE: The present paper was prepared as a supplement to the Use of Mexican Corporate Shares which was written by the same author and published in 27 Tulane Law Review 383 (June 1953). Among other topics, the earlier paper mentioned the various standard forms of Mexican business organizations, and thereafter dealt extensively with voting rights of Mexican corporate shares and dividends of Mexican corporations, special shares, re- strictions on the issuance of shares, stock certificates, no par stock, retirement of shares and a detailed description of nominative and bearer shares and their use, together with a reference to capital derived from corporate obligations, and a summary of the special requirements which govern public offerings of shares in Mexico. Readers are invited to consult the earlier paper as a founda- tion for the points of Mexican corporation practice presented in this issue. lArt. 89(1-4), Ley General de-Sociedades Mercantiles, July 28, 1934, as amended; see infra note 39 as to shares payable in kind. 2hbid., Arts. 164-171, 178; see also, The Syndic System Applied to the Amer- ican Corporation, 21 B.U.L. Rev. 102 (1941).

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