If you are interested in setting up a company in Mexico in record time, consider whether you can set up a Simplified Joint Stock Company.

The incorporation of a Simplified Joint Stock Company (SAS) in Mexico is subject to certain requirements and restrictions. Below, I explain who can and cannot incorporate a SAS:

Who Can Form a SAS:

1. Individuals:
   • The SAS is designed exclusively for natural persons, so any natural person with legal capacity can establish a SAS.
   • Unipersonality: A single natural person can form a SAS, making it the only commercial company in Mexico that allows a single partner.
   • Multiple partners: Although it may be a sole proprietorship, it is also possible for several individuals to join together to form an SAS.
2. Foreigners:
   • Foreigners can form a SAS as long as they have their e.firma (formerly FIEL) current.

Who Cannot Form a SAS:

1. Legal Entities:
   • Legal entities (companies, organizations, associations) cannot form a SAS or be partners of a SAS. This type of company is exclusively for natural persons.
2. Individuals with Participation in Other Companies:
   • A natural person who is already a shareholder or partner in other commercial companies with a majority stake (more than 50%) cannot form an SAS. The intention of this restriction is to prevent large companies from using the SAS to avoid the complexity of other corporate forms.
3. People with High Annual Income:
   • If the natural person who wishes to form a SAS obtains annual income exceeding the limit of 7,076,469.38 million pesos, he/she cannot use the SAS as a vehicle for his/her commercial activities. If the limit is exceeded, the SAS must be transformed by a public notary into another type of Company.
4. Regulated Activities:
   • SAS cannot engage in certain activities that require specific regulations or special authorizations, such as banking, insurance, investment funds, risk management, among other regulated sectors.

Important Considerations:

• Mandatory Transformation: If the SAS exceeds the annual revenue limit or if the partners wish to expand capital or activities into regulated areas, the SAS must transform into another type of commercial company, such as a Public Limited Company (SA) or a Limited Liability Company (SRL).
• Online Procedure: The entire process of establishing a SAS is carried out online, facilitating access for individual entrepreneurs.

In short, the SAS is an accessible option for individuals, both national and foreign, who seek to formalize their business in a simple manner and with limited liability, but with certain restrictions that seek to protect its nature as an option for small and medium-sized businesses.

Are you interested in establishing a SAS? Contact us.