Article 1 of the General Law on Commercial Companies (LGSM) establishes the seven types of commercial companies recognized in Mexico, which are the following:
- General Partnership: It operates with the joint and unlimited liability of the partners for the social obligations. The partners act under a corporate name.
- Simple Limited Partnership: Includes general partners (with unlimited liability) and limited partners (with liability limited to the amount of their contributions).
- Limited Liability Company (S. de RL): Its partners limit their liability to the amount of their contributions. It is ideal for small and medium-sized companies with a limited number of partners.
- Public Limited Company (SA): It is formed with a capital divided into shares. Shareholders have limited liability to the value of their shares.
- Limited Partnership by Shares (S. en C. por A.): It combines characteristics of a simple partnership and a public limited company, with general partners (unlimited liability) and limited partners (liability limited to their shares).
- Cooperative Society: It is based on principles of mutual aid and solidarity. Its main purpose is to satisfy the common economic and social needs of its members.
- Simplified Joint Stock Company (SAS): Introduced in 2016, it is a sole proprietorship that simplifies the incorporation requirements, ideal for small entrepreneurs.
Variable Capital Company
Any of the companies mentioned (except the cooperative) can be established as variable capital company, which allows its share capital to increase or decrease without the need for a statutory reform, under the provisions of the Chapter VIII of the LGSM.
This framework allows flexibility in the formation of companies according to the specific needs of the partners and the business.
The most popular business corporations in Mexico
In Mexico, the most popular companies for establishing businesses are: Limited Liability Company (S. de RL), the Public Limited Company (SA), and the Simplified Joint Stock Company (SAS). Each has advantages that suit different types of businesses and needs. Below is a comparison table of these companies:
| Type of Company | Characteristics | Advantages | Disadvantages |
| Public Limited Company (SA) | – Capital divided into shares. | – Ideal for medium and large companies. | – More costly and bureaucratic incorporation process. |
| – Minimum of 2 partners. | – Flexibility in the entry and exit of partners. | – Requires formality in administration. | |
| – Requires a articles of incorporation before a notary public. | – Allows issuing shares to attract investment. | ||
| Limited Liability Company (S. de RL) | – Capital divided into shares. | – Simplicity in administration. | – Less attractive for external investors. |
| – Limit of 50 partners. | – Protection of the personal assets of partners. | – Limit on the number of partners. | |
| – Non-negotiable contributions. | – It requires less paperwork than the SA | ||
| Simplified Joint Stock Company (SAS) | – It can be formed by a single partner. | – Low initial costs. | – Does not allow annual income greater than 6 million pesos. |
| – Digital 100% process. | – No notary public required. | – Limitations in attracting partners and external investment. | |
| – Ideal for small businesses. | – Facilitates the rapid start of operations. |
What is the best option for your business?
- Public limited company (SA): Ideal for companies seeking medium or long-term growth, especially if they require significant investments.
- Limited Liability Company (S. de RL): Recommended for family businesses or companies that prioritize simpler internal management.
- Simplified Joint Stock Company (SAS): Perfect for entrepreneurs and startups who want to establish themselves quickly and at low cost.
This table allows you to quickly view the main characteristics of each company and helps you choose the best option according to your business needs.
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