Lic. Paola García Galván – Associate of the Corporate Law Area at HGAbogados

In a context marked by the COVID-19 pandemic, a significant reform to the General Law of Commercial Companies has been enacted in Mexico. This reform seeks to take advantage of the benefits of technology to hold meeting and assemblies by telematic means. Below, we will analyze the main advantages, disadvantages, considerations and conclusions of this important update.

Advantages of the Reform:

1. Adaptation to Health Emergency: The reform becomes a necessary response to the health emergency, allowing companies to continue operating safely during crisis situations, such as the one caused by COVID-19.
2. Facilitation of Corporate Legal Acts: The reform simplifies and streamlines the performance of corporate legal acts, reducing the need for physical meeting and, at the same time, ensuring legal certainty for partners and shareholders.
3. Regulation of Digital Media: Establishes clear legal framework for the use of digital media in the execution of corporate legal acts, providing legal certainty and defining the necessary procedures.
4. Flexibility in Meetings: The reform promotes flexibility and dynamism in the holding of meetings, allowing participants to choose to attend in person or through telematic means, as long as functionally equivalent interaction is maintained.
5. Strengthening of the Reform: This update strengthens the previously approved reform, consolidating the modernization and adaptation of the General Law of Commercial Companies.

Disadvantages or points to consider:

1. In order for a company to be able to acquire these benefits, it is necessary that its bylaws so provide, therefore, either from its incorporation or through and extraordinary meeting, these rules must be adopted.
2. The reality is that various situations will arise throughout the use of electronic media, for example, network failure, failure of the necessary instruments (camera, microphone, etc.), among others, which may lead to possible nullities.
3. An important point (and one of the most significant from our point of view), is the form of legitimization of the partners and shareholders, both to show personality and to manifest their will, for which we hope that the electronic signature mechanisms currently available in the market will be used or reinforced.

In conclusion, this reform to the General Law of Commercial Companies represents a significant step towards the modernization and adaptation of companies to the changing realities of the 21st century. By allowing the use of telematic means in the holding of assemblies and meetings, it promotes business continuity and establishes clear standards for the security and validity of these processes. This reform not only responds to the health emergency, but also promotes agility and flexibility in business decision making, which will contribute to the development and growth of the business sector in Mexico.

Decree approved and published in the Official Gazette of the Federation on October 20, 2023.