The Mexican Senate, on Sept. 12, 2023, unanimously approved the draft Decree reforming several provisions of the General Law of Commercial Companies (Ley General de Sociedades Mercantiles or LGSM). By virtue of this reform, it is intended to incorporate the legal figure of virtual Partners and Shareholders meetings and Board resolutions held through telematic (virtual) means, to facilitate, expedite and give full legal certainty to the convening of partners and shareholders meetings, as well as of the resolutions taken by the administrative and supervisory bodies of commercial companies.

The draft Decree amending the LGSM also intends to include the possibility for companies to choose to recognize the use of electronic, optical and other technologies to document the holding of meetings and sessions through minutes, resolutions and other related documents of the companies and to allow the use of electronic signatures to formalize them.

It should be noted that the foregoing will only be possible as long as the bylaws of the companies so prescribe it. All those companies incorporated prior to the entry into force of the aforementioned Decree may incorporate to their bylaws the amended provisions to allow the possibility of holding virtual meetings and board resolutions as well as to recognize the use of electronic, optical and other technologies to document the minutes, resolutions and other related documents of the company.

The draft Decree has been submitted to the Federal Executive, which once approved, would enter into force the day after its publication in the Official Gazette of the Federation.

This draft Decree reforming the LGSM represents a great legislative advance in line with the needs of our corporations to modernize their administration and corporate management.