On December 26, an Official Notice was published in Mexico’s Federal Official Gazette announcing the adjustment factor applicable to the total annual gross revenues of a Simplified Stock Company (SAS), in accordance with the provisions of Article 260 of the General Business and Company Law (LGSM).
Pursuant to such publication, the adjustment factor applicable for the fiscal year 2026 is 1.0379, which results in a maximum threshold of total annual gross revenues of MXN $7,678,849.94 that an SAS may obtain. This amount constitutes the maximum legal limit for a company to retain its status as an SAS.
The SAS is a corporate vehicle designed to facilitate entrepreneurship and the formalization of small businesses, allowing for expedited incorporation through electronic means, without the need to formalize its bylaws before a notary public, even when incorporated by a single individual, and subject to a simplified corporate governance regime.
Nevertheless, its operation is subject to express statutory limitations, including the annual revenue cap established under Article 260 of the LGSM. Mexican lawmakers sought to encourage small merchants to enter into formality by providing an alternative through which they may incorporate as a legally recognized company; however, as the business grows and once certain financial thresholds are met, such entities are required to adopt another type of corporate form recognized under the LGSM, through a corporate conversion process.
Indeed, when an SAS exceeds the maximum annual revenue threshold permitted by law, it no longer complies with the legal requirements to operate under such a regime. In such an event, the company must be transformed into another type of business company, without implying its dissolution or liquidation, nor the loss of its separate legal personality distinct from that of its founding shareholder, but rather solely the adoption of a different corporate regime. In such a case, and where applicable, the participation of at least one additional shareholder will be required to carry out the aforementioned conversion.
Among the types of companies into which an SAS may be transformed are, primarily, the following:
Business corporation (S.A.). This type of company is among the most commonly used and is suitable for businesses whose operations require greater control, implementing a broader and more clearly defined corporate structure, with a degree of protection for shareholders, who are liable only up to the amount of their shareholdings. In this company, there is no maximum number of shareholders, nor a minimum capital requirement for its incorporation. Day-to-day operations are carried out by a management body, whether individual or collegial, which may be composed of shareholders or third parties. The management body is overseen by one or more statutory auditors.
Limited Liability Company (S. de R.L.). This is likewise one of the most commonly used forms, characterized by a limited number of partners, a stronger personal relationship among them, and restrictions on the transfer of equity interests. As its name indicates, partners have limited liability, being liable only up to the amount of their capital contributions. As with the stock corporation, the management of the company’s business is entrusted to one or more managers; however, the appointment of a supervisory body is optional for the partners. Although there is no minimum capital requirement for incorporation, it differs from the stock corporation in that the maximum number of partners is fifty (50).
General Partnership (S. en N.C.). This type of company is not commonly used today, as the partners are subsidiarily, jointly and severally, and unlimitedly liable for the company’s obligations, which may affect their personal assets.
Limited Partnership (S. en C.) or Limited Liability Stock Partnership (S. en C. por A.). Under these forms, the LGSM clearly distinguishes between general partners, who manage the company and are subject to unlimited liability, potentially affecting their personal assets, and limited partners, who are liable only up to the amount of their contributions or shares, as applicable, and who may not perform acts of management.
In this context, the newly updated revenue threshold not only defines the maximum operational scope of SAS entities but also constitutes a relevant element of corporate planning, insofar as revenue growth may trigger the need for a timely and legally structured corporate transformation.
To access the referenced Official Notice, please visit:
https://www.dof.gob.mx/nota_detalle.php?codigo=5777134&fecha=26/12/2025#gsc.tab=0
Should you have any questions or comments regarding the published Official Notice, please do not hesitate to contact us at: info@ceglegal.com
