Amendments (the "Reform") to the General Law of Mexican Companies (Ley General de Sociedades Mercantiles or "LGSM") require permanent public disclosure of equity owners in limited liability companies (sociedades de responsabilidad limitada) and stock corporations (sociedades anónimas).
On June 14, 2018, an amendment to the LGSM was published in the Official Federal Gazette. By means of said reform, the entries in the special ledger of partners (libro especial de los socios) of limited liability companies and the entries in the stock ledger (registro de acciones) of stock corporations – including information on any transfer of equity quotas or shares, as applicable – need to be published in the electronic system established by the Ministry of Economy (Secretaría de Economía). The amendment will become effective on December 15, 2018 (six months following the day after its publication).
Under the LGSM, both stock corporations and limited liability companies are required to maintain records of their shareholders or partners, as applicable, which information includes their name, domicile and nationality, federal taxpayers’ number (if applicable) and paid-in amount of each partner or shareholders’ shares. However, prior to the effectiveness of the Reform, these records were confidential in nature.
Regarding the publication of the entries in the stock ledger of stock corporations, the Reform indicates that the Ministry of Economy will make sure that the name, nationality and domicile of the shareholders remains confidential, except when judicial or administrative authorities request such information for the performance of their duties. We note that no administrative or judicial authority is excluded from this authority, including antitrust, electoral, and data protection and transparency agencies.
Concerning the special ledger of partners, the Reform does not include a confidentiality protection, and it does not set out the purpose of the publication or the use that the Ministry of Economy will give to the published information.
The Reform does not include any particular sanction for the failure to publish the required information in the electronic system. It is yet to be seen how the Ministry of Economy will enforce the new obligations under this Reform.
The Reform has the purpose of strengthening the anti-money laundering framework. Notwithstanding, the broadness of the revised provisions opens a number of different scenarios that companies in Mexico need to analyze.