Regulatory Compliance Q1

Sociedad en Nombre Colectivo (S.N.C.)

The “Danger” Company: UNLIMITED LIABILITY. All partners respond jointly and subsidiarily with their personal assets for company debts.

Sociedad de Responsabilidad Limitada (S. de R.L.)

The “Safe & Solid” Choice (LLC): LIMITED LIABILITY. Best for small or medium-sized companies with a limited number of partners (max 50). Partners only risk their investment.

Sociedad Anónima (S.A.)

The “Giant Corporation”: LIMITED LIABILITY. Designed to raise large capital through the issuance of shares (acciones).

Sociedad por Acciones Simplificada (S.A.S.)

The “Solo/Micro-Start” Company (SSC): LIMITED LIABILITY for one or more partners

S.A.S. Revenue Cap (2025)

The Critical Money Limit: $7

Sociedad en Comandita Simple (S. en C.S.)

The “Mixed-Risk” Company: Includes general partners with unlimited liability and limited partners with liability only up to their contributions.

Sociedad en Comandita por Acciones (S. en C. por A.)

The “Hybrid Share Partnership”: Similar to S. en C.S. but with capital divided into shares.

Sociedad Cooperativa (S.C.)

The “Community Enterprise”: Association of individuals with common interests and equal voting rights. Profits distributed based on participation

Acta Constitutiva

The “Birth Certificate” of the company: The public deed that contains the company’s name

Contrato de Sociedad

The Foundation: The legal agreement celebrated by partners that establishes the company and its operational rights and obligations.

Persona Moral

Legal Identity: The company’s legal personality

Objeto Social

The Company’s Purpose: The specific activities for which the company was created. It defines the legal scope of its operations.

Domicilio Social

The Legal Home: The company’s official address registered in its constitutive act for legal and tax purposes.

Capital Social

The Company’s Backbone: The total amount of money or goods contributed by partners to form the company.

Asamblea de Socios/Accionistas

The Decision Body: The highest authority in the company

Administrador/Consejo de Administración

The Management Authority: Individuals or bodies in charge of executing the company’s decisions and managing daily operations.

Sujeto Activo (Tax)

The Collector: The State (government/SAT) that has the right to demand payment of taxes.

Sujeto Pasivo (Tax)

The Taxpayer: The individual or corporation obligated to pay taxes or comply with fiscal duties.

Obligación Tributaria

The “Duty to the State”: The legal duty to pay

Formal Obligations

The “Paperwork Duties”: Tax duties that do not involve payment (e.g.

Crédito Fiscal

The “State’s IOU”: The specific amount the government is legally owed

RFC (Registro Federal de Contribuyentes)

Tax ID: Unique code that identifies individuals and companies before the SAT for all fiscal purposes.

SAT (Servicio de Administración Tributaria)

Tax Authority: The federal body responsible for collecting taxes and enforcing compliance with fiscal laws.

ISR (Impuesto Sobre la Renta)

Income Tax: The tax charged on the income of individuals and legal entities in Mexico.

IVA (Impuesto al Valor Agregado)

Value Added Tax: An indirect tax applied to the sale of goods and services (16% standard rate in Mexico).

Declaración Anual

The Annual Tax Report: Statement where taxpayers report their yearly income

CFDI (Comprobante Fiscal Digital por Internet)

Electronic Invoice: The official digital tax receipt used to record all commercial transactions in Mexico.

Propiedad Intelectual

The “Mind’s Creations”: Umbrella term protecting creations like Copyright and Industrial Property (trademarks/patents).

Industrial Property (Propiedad Industrial)

Business Assets Protection: Protects trademarks

Trademark (Marca)

Distinctive Sign: A visible sign (name or logo) that distinguishes products or services in the market. Registered with IMPI.

Patent (Patente)

Industrial Property Right: Exclusive right for a new product or process offering a new technical solution. Granted by IMPI.

Copyright (Derecho de Autor)

Creative Protection: Legal right protecting creators of literary

IMPI

Industrial Property Agency: The Mexican Institute of Industrial Property (Instituto Mexicano de la Propiedad Industrial).

INDAUTOR

Copyright Agency: The National Institute of Copyright (Instituto Nacional del Derecho de Autor).

Licencia de Uso de Marca

Brand Permission: Legal authorization granted by the trademark owner to another person or company to use the brand.

Secreto Industrial

Confidential Advantage: Any confidential information that gives a company a competitive edge

Aviso de Privacidad

Privacy Notice: Document required by law informing individuals how their personal data will be used and protected.

IDS (Salario Diario Integrado)

The “Real Cost” of the Employee: The base daily salary plus the equivalent of benefits

Salary Cap (Tope Salarial)

The “Ceiling” on Big Salaries: Max IDS used for severance = 2 times the General Minimum Wage.

Unjustified Dismissal (Despido Injustificado)

The “Big Money Mistake”: Firing an employee without legal cause or proper documentation.

Accrued/Back-Salaries (Salarios Vencidos)

The “Debt Clock”: Salaries the company must pay for every day the lawsuit lasts (up to 12 months).

Constitutional Indemnification

The “Minimum Penalty”: The basic severance payment for unjustified dismissal: 90 days of the capped IDS.