A ready-made company is a business entity that has already been registered but hasn’t had any economic or business activities. These legal entities are also called shelf companies and can be a suitable option for those foreign investors in Mexico who want to start their business activities as fast as possible.
In order to buy a ready-made company in Mexico, investors need to follow a few steps and perform a verification before acquiring the legal entity. One of our Mexico company formation agents can help you buy a shelf company and start your activities in the country.
Table of Contents
The advantages of ready-made companies
The ready-made company in Mexico is a business entity, typically a limited liability company, that has been incorporated according to the Mexican corporate laws and standards but has not been used for trading or any type of business activity.
| Quick Facts | |
|---|---|
| Legal entities available for shelf companies | Investors who want to buy a ready made company in Mexico will usually find available entities for sale incorporated as limited liability companies. |
|
Time required to purchase the shelf company |
The time necessary for the sale of a ready made company is 1 business day. |
|
Types of features it includes (corporate bank account, VAT number, etc.) |
– corporate documents (bylaws, certificate of incorporation); – registered trading name; – registered address; – tax identification number; – bank account, etc. |
| The advantages of a shelf company |
It is recommended to buy a ready made company in Mexico when you want to start your business operations as soon as possible. It is also useful for those who want to demostrate corporate longevity (for bank-related services, establishing business partnerships, etc.). |
| Appointing new directors |
The new owner can appoint new directors. |
| Capital increase allowed (yes/no) |
Yes |
| Certificate of no commercial activities |
Shelf companies that were dormant are sold with a certificate of no commercial activities, which attests that the company has been incorporated and that no operations were conducted through it. |
| Modify the objects of activity (yes/no) |
Yes |
| Participants in the purchase procedure |
The seller, the investor buying the company, the notary public, the Mexican institutions (the new owner must report the new changes), company formation specialists and/or lawyers. |
| The costs of buying a shelf company |
The sale price varies based on the age and the feature the company has. You can address our consultants for a price estimate. |
| Shelf company – definition |
A shelf company (or a ready made company) refers to a legal entity that has been incorporated for the sole purpose of being sold to a third party. This is an alternative for those who do not want or know how to complete the registration of a company in Mexico (it also represents a time-saving solution to the standard registration process). |
| Transfer of ownership |
Those who buy a ready made company in Mexico will become the new owners of the company through the sale agreement. |
| Capital requirements |
Not applicable (the company is incorporated with the minimum capital required by law). |
| Institution in charge with the registration of the new owner |
The Ministry of Economy, the Central Mercantile Register. |
| Due diligence |
Even though a shelf company is sold without any prior operations, it is highly recommended to address our team for professional corporate due diligence services. Through these, you can rest assured that the company is sold without any hidden legal issues. |
The fact that the company has been “left on the shelf” and has aged means that the legal entity doesn’t have debts or any negative credit history. It can be a newly registered legal entity or it can be a type of company that has been registered for some years (which may represent an advantage for gaining credibility).
This is known as an aged shelf company and the main advantage investors can obtain is that the company can have a better credit score when dealing with financial institutions. This is due to the date of incorporation (older companies can obtain loans following simpler procedures, compared to newly incorporated businesses).
Therefore, besides the fact that investors will not have to waste time with the process of company formation in Mexico, they will also have a better credibility on the Mexican market.
Our team that specializes in company formation Mexico can give you detailed information on the transactions needed to purchase a ready-made company. The process is straightforward and the company, once transferred onto the name of the new owner, can start trading right away.
However, investors are advised to be cautious when purchasing Mexican legal entities and, in most cases, perform a company due diligence to ensure that the company is indeed debt-free and hasn’t had a business history.
How long does it take to buy a ready-made company in Mexico?
The procedure can be completed in a very short amount of time, of around 24 hours. Once the sale agreement is signed, the company can actually start trading, provided that the new owner is not interested in modifying the features with which the company was sold.
What are the features of a shelf company in Mexico?
Investors who will buy a ready-made company in Mexico can receive, when the transaction is finalized, all the basic characteristics of any legal entity that has completed the incorporation process. Shelf companies are sold with the following features:
- a trading name;
- statutory documents;
- registered address;
- established objects of activity;
- corporate bank account;
- registration certificates.
Buy a limited liability company in Mexico
The type of company most often employed by local and foreign investors in Mexico is the limited liability company (LLC). Entrepreneurs willing to buy a shelf company in Mexico will find numerous options when looking to purchase this type of company, with different ages (from a few months to a few years) and with variable capital.
Our Mexico company registration experts can help you during the company purchase if you prefer to buy a ready-made company. We can help you follow steps needed for setting up a company in Mexico. Address us for more information on the investment options in the country and for personalized company incorporation assistance.
Ready-made companies incorporated as LLCs in Mexico
It is simple to open a company in Mexico registered as a limited liability company. This is a corporate structure, separate from the shareholders, who benefit from limited liability against the debts of the company. It is ideally suited for small and medium companies and it can be set up for almost all business operations.
This is the most common way to start a business for both local and foreign investors and this is why most of the ready-made companies available for sale are incorporated as LLCs. The LLC has the following characteristics:
- it can be set up with 100% foreign capital;
- the company must be founded by minimum 2 investors (known as shareholders);
- however, there is a maximum number of shareholders, limited to 50;
- the process of company incorporation in Mexico can take up to 4 weeks (this is because the formalities for opening a bank account take a longer period of time here) – however, this timeframe can be avoided by buying a ready-made company.
Below, you can watch a short video presenting how to buy a Mexican shelf company:
Obligations after the purchase of the shelf company in Mexico
The sale of the ready-made company is completed through a sale agreement. Once the company belongs to the new owner, he or she needs to report all the changes to the Mexican company registration authorities (trade register, tax authorities, employment agencies, etc.).
The same institutions that are involved when an investor will set up a company in Mexico must be informed and/or contacted for a variety of procedures after the sale, such as for taxation purposes.
What changes can be made after the purchase of a shelf company?
After investors will buy a ready-made company in Mexico, they can modify many of the basic characteristics of the legal entity. They can change the objects of activity initially stated in the company’s incorporation documents, appoint new directors, change the company’s address and many others.
It is also allowed to increase the company’s capital. However, it is not possible to change the legal entity under which the company was established. Provided that, at a later time, investors will consider that they should operate under a different structure that can offer more advantages, it will be required to close down the company and begin the process of company incorporation in Mexico.
Cities where clients can buy a ready-made company in Mexico
Shelf companies are available for sale on the entirety of the Mexican territory. However, this service is more common in Mexican large cities, given that these are the places with the most developed economic and financial activity. Foreign investors can buy shelf companies in cities such as:
- Mexico City (Ciudad de Mexico);
- Acapulco;
- Guadalajara;
- Tijuana;
- Leon;
- Monterrey.
Shelf companies are also available in Cancun, Durango, Morelia, Culiacan, Guadalupe, etc. There are many other locations, and if you are interested in investing in a certain Mexican city or town, we invite you to address our team of consultants in company formation in Mexico. Our specialists can offer you the necessary information on the availability of shelf companies in the regions of interest.
Our consultants can also advise if you can purchase aged shelf companies in any of the cities mentioned above, provided that you want to buy a legal entity that has been incorporated for many years. You can also rely on us for advice on the best investment sectors you can choose from when investing in any these regions.
Accounting services for your ready-made company in Mexico
After you purchase the ready-made company, you will start the business activity and this implies that you will need the services of an accountant. You can hire our CPA in Mexico, who can handle any type of accounting procedure.
The CPA is a type of accountant with a higher education and expertise compared to a basic accountant and this can be of help in numerous ways for a businessman, including in tax advice. If you want to start a small business, you can use the services of any types of accountants in Mexico. We invite you to contact us for more details on the process of buying a ready-made company in Mexico.