Using Promissory Notes for Capital Contributions and Dividends? Highest Administrative Court Says They Do Not Count as Payment
The shareholders of a Mexican company approved a capital stock increase and dividend distribution at a meeting. They signed the minutes. They endorsed promissory notes. The Federal Administrative Court (TFJA) held that those transactions had no legal effect. A company approved an increase in its capital stock to be paid through the endorsement of a […]
Timing Matters: Provisional Remedies and Foreign Jurisdiction under Mexican Law
A company leased a helicopter to an entity domiciled in Mexico. In the event of a dispute, the parties agreed that it would be resolved before courts in Louisiana. The lessor believed this would provide greater certainty and protection. It did not. The lessor filed a claim in the United States (US) due to the […]
Arbitration in Singapur, assets frozen in Mexico: what Mexico’s Supreme Court upheld (AR 557/2025)
A widely held assumption among companies with international operations is that agreeing to arbitration abroad “removes” the dispute from Mexican courts. A case recently decided by Mexico’s Supreme Court of Justice (the Court) shows that this assumption is incomplete and that the cost of not understanding it can be measured in frozen bank accounts. Two […]
Does your company grant credit without considering the interest rate? Be careful with the recent Mexican Supreme Court decision
A bank granted a loan to another company, which signed promissory notes with interest rates freely set by the lender and secured by a mortgage guarantee. The bank assumed that, because the borrower was another company, the rate would not be challenged. The Mexican Supreme Court has now confirmed that a judge may reduce it […]
The clause selecting jurisdiction in your contracts may be disregarded by a judge as of June 29
The contracts and purchase orders you use with your clients state that any dispute will be submitted to the courts you selected. As of June 29, that clause may not hold before a judge. As of that date, binding case law establishes that express submission clauses to courts in a specific territory cannot be used […]
Mexico’s Financial Intelligence Unit can freeze your trust without a court order. Your trustee is not liable for that
Many individuals and companies in Mexico use management trusts to protect assets and isolate risks. The rationale is straightforward: assets are transferred to a trustee institution and are placed outside the reach of creditors and corporate disputes. However, they are not outside the reach of the Financial Intelligence Unit (UIF). The Supreme Court of Justice […]
When Your Debtor Enters Commercial Insolvency Proceedings, the Clock Is Already Ticking
You are the administrator of a company that regularly extends credit. You document those receivables through promissory notes, invoices, and contracts. One of your clients has failed to pay you for several months, and one day you see in Mexico’s Federal Official Gazette (DOF) that it has initiated commercial insolvency proceedings. From that moment on, […]
The promissory note that looked bulletproof: what a recent Mexican Supreme Court of Justice decision means for your company
If you operate in Mexico or extend credit to Mexican counterparties, you will likely rely on promissory notes (pagarés). I see this structure used routinely in commercial practice. A recent decision from the Mexican Supreme Court changes how reliable those instruments are in litigation. A company filed a summary commercial action to collect on six […]
SA, SRL or SAPI? What your corporate structure defines before the investor arrives
When an investor appears on the horizon, most growing companies in Mexico face the same situation: they have been operating for years under a corporate structure that nobody reviewed since incorporation. What seemed like an administrative decision turns out to determine who can call a shareholders’ meeting, how shares are transferred, and what real protection […]
Merger Risk Management: The Role of Creditor Opposition
Recently, the Supreme Court of Justice of Mexico, upheld the right of creditors of companies seeking to merge to judicially oppose the process and to have the merger suspended until the opposition is resolved. The Court confirmed the constitutionality of Article 224 of the General Business Company Law (LGSM). However, the primary lesson this ruling […]
Your Shareholders’ Meeting May Be Annulled—And You Probably Don’t Know I
This is not an exaggeration, and it happens in practice more often than one might expect. All legal requirements may appear to have been met, yet someone failed to review the bylaws before issuing the call notice and was unaware of the latest applicable judicial criteria. A poorly drafted call notice or one published incorrectly […]
When Mexico’s Financial Intelligence Unit Freezes Accounts, There Is No Backup: What Directors Must Know Before It Happens
On April 6 of this year, the Supreme Court of Justice of Mexico upheld that the Financial Intelligence Unit (UIF) may freeze a company’s bank accounts without requiring a prior court order. It is sufficient for the authority to determine, based on reasonable indicia, that the company may be linked to offenses such as terrorist […]