On June 13, 2014, numerous reforms to various business laws were published in the Official Journal of the Federation, which included, among others, the Commercial Code, the General Law of Business Associations, the Law of Investment Funds and the General Law of Instruments and Credit Transactions. The following highlights some of the most important changes included in such reforms: Creation of an Electronic Registry: An electronic Public Registry of Commerce has been created and shall operate with an information protocol by means of which the capture, storage, custody, security, consultation, reproduction, verification, administration and transmission of registry information will be maintained. The Department of Economy has one year from the publication of the reform to create the electronic system, which will handle the consultation, administration and publication of various legal actions and transmittals relating to business associations, such as their formation, transformation, merger, spin-off, dissolution and liquidation, so the corresponding procedures will be simplified.Single Registry of Personal Property Collateral (RUG): This reforms creates a new obligation to register certain legal acts regarding personal property, including non-possessory pledges, industrial mortgages, financing leases, financial factoring and the rescission and reservation of ownership clauses in commercial purchase and sale contracts, in order for such security interests to be effective against third parties and to have priority rights in the collateral listed in the RUG.Shareholder Choice Prevails in Corporations: A provision similar to that applicable to Investment Promotion Corporations (Sociedades Anónimas Promotoras de Inversión) was added for business corporations (S.A.s). Such is contained in the Stock Market Law and allows shareholders to agree in a corporation’s bylaws as they deem appropriate regarding their corporate and share ownership rights, being able to, among other things, establish transfer restrictions, series of stock with different rights or restrictions, causes for removing or excluding shareholders, deadlock provisions, options for the purchase or sale of stock (drag along/tag along provisions) and voting agreements.Minority Shareholder Rights: The corporate stock participation percentage required to exercise civil actions against a company’s administrators, to postpone a vote on any matter in a shareholders’ meeting in which it is believed that more information is required, and to judicially oppose shareholders’ meeting resolutions, has been reduced to from 33% to 25%.
