Countries › Mexico › Guide › 4. Entities and setup › Mergers, spin offs, transformations and capital changes in Mexico: company law steps, creditor periods and tax neutral conditions

Mergers, spin offs, transformations and capital changes in Mexico: company law steps, creditor periods and tax neutral conditions

Last verified: 2026-10-26 · Status: Stable

Mexican mergers take effect three months after registration unless debts are paid, deposited or consented to, spin offs need audited statements, a published extract and a 45 day opposition window, and partnerships, S. de R.L., S.A. and partnerships limited by shares may transform into any other type or into variable capital. Capital increases and reductions follow the bylaws and meeting rules of each type, with publication and a creditor opposition right on reductions that return capital. For tax, a merger or spin off is not a sale only if the CFF art. 14-B conditions are met, including notices, one year business continuity for mergers, a three year 51 percent shareholder continuity for spin offs and a business purpose that the SAT can test over a ten year window.

USD figures use MXN 18.5026 per US dollar, the Federal Reserve H.10 noon buying rate for 16 October 2026 (FRED series DEXMXUS), the latest official observation verified for this page. Conversions are for orientation only.

Key facts

Creditor opposition period before a merger takes effect	3 monthsLGSM art. 224, as of 2026-10-26 · in force
Opposition period after registration and publication of a spin off	45 calendar daysLGSM art. 228 Bis, fraction V, as of 2026-10-26 · in force
Capital share entitling partners to oppose a spin off in court	20 %LGSM art. 228 Bis, fraction VI, as of 2026-10-26 · in force
Joint liability period of spin off companies to non consenting creditors	3 yearsLGSM art. 228 Bis, fraction IV, letter d, as of 2026-10-26 · in force
Creditor opposition window after the last publication of a capital reduction	5 daysLGSM art. 9o., as of 2026-10-26 · in force
Years the surviving company must continue the merged businesses for tax neutrality	1 yearsCFF art. 14-B, fraction I, letter b, as of 2026-10-26 · in force
Voting shares that must stay with the same shareholders for three years after a spin off	51 %CFF art. 14-B, fraction II, letter a, as of 2026-10-26 · in force

The rule

1. Merger decision and publication. Each company decides the merger in the form its type requires (for an S.A., an extraordinary meeting). The merger resolutions are registered in the Public Registry of Commerce and published in the Ministry of Economy electronic system, together with each company's last balance sheet and, for the companies that disappear, the plan for extinguishing their liabilities.Ley General de Sociedades Mercantiles (General Law of Commercial Companies, LGSM), DOF 4 August 1934, last reform DOF 20 October 2023, Arts. 182, fraction VII, 222 and 223 (reformed DOF 13 June 2014), 1934-08-04 official text · verified 2026-10-26

2. The three month creditor window. A merger takes effect three months after registration; in that period any creditor of the merging companies may oppose it in court, suspending it until a final judgment rejects the opposition. After the period without opposition, the surviving or new company takes on the rights and obligations of the disappearing ones. The merger takes effect at registration instead if all debts are paid, their amount is deposited with a bank (term debts are treated as due), or all creditors consent; the deposit certificate must be published.
Example: Two subsidiaries merge on 1 March with no creditor deal: the merger takes effect on 1 June. If the absorbed company deposits its MXN 12,000,000 of debts with a bank, it takes effect at registration. / Depositing about USD 648,559 of debts lets the merger take effect at registration.Ley General de Sociedades Mercantiles (General Law of Commercial Companies, LGSM), DOF 4 August 1934, last reform DOF 20 October 2023, Arts. 224 and 225, 1934-08-04 official text · verified 2026-10-26

3. Spin off (escisión). A company may split all or part of its assets, liabilities and capital into new companies, either disappearing or surviving. The resolution needs the majority for bylaw amendments, shares must be fully paid, and each partner initially gets the same proportion in the new companies. The resolution must describe the transfer, identify the assets, liabilities and capital of each company, attach the splitting company's financial statements for at least the last year audited by an external auditor, set the obligations each new company assumes, and include the new bylaws. It is notarized, registered and an extract published in the Ministry of Economy system, with the full text available to partners and creditors for 45 calendar days. In that period partners with 20 percent of capital or interested creditors may oppose in court (giving a bond). If a new company defaults on a transferred obligation, the others are jointly liable to non consenting creditors for three years, up to the net assets they received. Dissenting partners may withdraw.Ley General de Sociedades Mercantiles (General Law of Commercial Companies, LGSM), DOF 4 August 1934, last reform DOF 20 October 2023, Art. 228 Bis (added DOF 11 June 1992; fraction V reformed DOF 13 June 2014), 1992-06-11 official text · verified 2026-10-26

4. Transformation. Companies of the types in LGSM art. 1o., fractions I to V (general and limited partnerships, S. de R.L., S.A. and partnership limited by shares) may adopt any other legal type and may become variable capital companies, following the merger rules on publication and creditor protection. An S.A.S. may change its organization only by transforming before a notary into another type. In an S.A., shareholders who vote against a transformation may withdraw within 15 days and be repaid per the last approved balance sheet.Ley General de Sociedades Mercantiles (General Law of Commercial Companies, LGSM), DOF 4 August 1934, last reform DOF 20 October 2023, Arts. 206, 227, 228 and 269, 1934-08-04 official text · verified 2026-10-26

5. Capital increases and reductions. Every company may increase or reduce capital following the rules for its type. A reduction by repayment to partners or by releasing them from unpaid calls must be published in the Ministry of Economy system, and creditors may oppose it in court from the resolution until five days after the last publication. In variable capital companies, changes above the fixed minimum follow the bylaws or extraordinary meeting terms and are entered in the capital variations book, and a partner's withdrawal takes effect at the end of the current year (or the next, if notified in the last quarter) and cannot cut capital below the minimum.Ley General de Sociedades Mercantiles (General Law of Commercial Companies, LGSM), DOF 4 August 1934, last reform DOF 20 October 2023, Arts. 9o., 216, 219, 220 and 221, 1934-08-04 official text · verified 2026-10-26

6. Fiscal year ends early on a merger. When a company merges or goes into liquidation, its fiscal year ends early on that date.Ley General de Sociedades Mercantiles (General Law of Commercial Companies, LGSM), DOF 4 August 1934, last reform DOF 20 October 2023, Art. 8o.-A (added DOF 28 December 1989), 1989-12-28 official text · verified 2026-10-26

7. Tax neutral merger conditions. For tax, a merger is not a sale of assets if: the merger notice in the CFF Regulation is filed; the surviving company continues the activities of all merging companies for at least one year after the merger takes effect (with exceptions for related leasing and for companies earning over 50 percent of income from each other, and not required if the survivor is liquidated within the year); and the survivor files the final year returns and information returns of the absorbed companies. Another merger within five years of a merger or spin off needs prior SAT authorization.Código Fiscal de la Federación (Federal Tax Code, CFF), DOF 31 December 1981, last reform DOF 9 April 2026, Art. 14-B, fraction I, and paragraph after fraction II, 1981-12-31 official text · verified 2026-10-26

8. Tax neutral spin off conditions. A spin off is not a sale if shareholders owning at least 51 percent of voting shares (or partes sociales carrying 51 percent of votes) of the splitting and new companies remain the same for three years counted from the year before the spin off and keep the same proportions, and, if the splitting company disappears, the extraordinary meeting designates the company that files its final returns. Transfers by death, liquidation, court award or qualifying gifts do not break continuity.Código Fiscal de la Federación (Federal Tax Code, CFF), DOF 31 December 1981, last reform DOF 9 April 2026, Art. 14-B, fraction II (letter a reformed DOF 12 November 2021), 2021-11-12 official text · verified 2026-10-26

9. Business purpose and the ten year window. Since 1 January 2022, if the SAT finds a merger or spin off lacks business purpose or misses any condition, it taxes the transfer as a sale. To test business purpose it may look at relevant transactions in the five years before and after, such as transfers of shares or voting or veto rights, changes over 30 percent in the book value of shares, capital changes, shifts in ownership percentages, changes of tax residence of shareholders, or transfers of business segments. A relevant transaction within five years after triggers an information return, and the financial statements used for the merger or spin off must be audited by a registered public accountant. Neutrality is also lost if a new equity item appears that was not in the statements approved by the meeting.Código Fiscal de la Federación (Federal Tax Code, CFF), DOF 31 December 1981, last reform DOF 9 April 2026, Art. 14-B, paragraphs added or reformed DOF 12 November 2021, 2021-11-12 official text · verified 2026-10-26 · changed: Business purpose test, relevant transactions list and audit requirement added by decree DOF 12 November 2021, in force 1 January 2022.

10. Foreign investment registry and notaries. In formations, amendments, transformations, mergers, spin offs, dissolutions and liquidations involving persons required to register in the RNIE, the notary must require proof of registration or report the omission to the Registry within ten business days.Ley de Inversión Extranjera (Foreign Investment Law, LIE), DOF 27 December 1993, last reform DOF 27 May 2024, Art. 34, 1993-12-27 official text · verified 2026-10-26

Transaction	Who decides	Publication	Creditor or partner window	Article
Merger	Each company per its type (S.A.: extraordinary meeting)	Registry plus Ministry of Economy system, with balance sheets	3 months, unless debts paid, deposited or consented	222 to 225
Spin off	Bylaw amendment majority	Registry plus extract in Ministry of Economy system	45 calendar days; 20% partners or creditors may oppose	228 Bis
Transformation	Bylaw amendment majority	As for mergers	As for mergers; S.A. dissenters may withdraw in 15 days	206, 227 and 228
Capital reduction with repayment	Per company type	Ministry of Economy system	Until 5 days after last publication	9o.
Variable capital change	Bylaws or extraordinary meeting	Capital variations book	Withdrawals effective at year end	216 to 221

Company law clocks for corporate changes (LGSM)

Worked example

A foreign group owns two Mexican subsidiaries, one manufacturing and one leasing equipment only to the first. It merges the leasing company into the manufacturer by extraordinary meetings of both (LGSM arts. 182 and 222).
It registers and publishes the resolutions and balance sheets (art. 223) and, to avoid the three month wait, the absorbed company obtains its creditors' written consent so the merger takes effect at registration (art. 225).
For tax, it files the merger notice, and the one year continuity rule does not bite because the absorbed company earned its income from leasing assets used in the survivor's business (CFF art. 14-B, fraction I). The survivor files the absorbed company's final returns.
Two years later the group plans to sell 40 percent of the survivor. Because that is a relevant transaction within five years of the merger, it files the information return and documents the business purpose of the merger (CFF art. 14-B).

Step by step

1. Map the structure and check the tax neutrality conditions (CFF art. 14-B) and any restructuring rules in the income tax law before approving anything.
2. Prepare financial statements; for a spin off, have the last year audited (LGSM art. 228 Bis), and for tax neutrality have the statements audited by a registered public accountant (CFF art. 14-B).
3. Hold the required meetings with the right majorities and, for an S.A., note dissenters' withdrawal rights (LGSM arts. 190 and 206).
4. Notarize, register in the Public Registry of Commerce and publish in the Ministry of Economy system (LGSM arts. 223 and 228 Bis).
5. Run the creditor windows or settle, deposit or obtain consents (LGSM arts. 224 and 225); file tax notices and RNIE updates.
6. Track relevant transactions for five years after closing (CFF art. 14-B).

Common traps

Merger effective date. Without paying, depositing or getting consent from creditors, the merger only takes effect three months after registration (LGSM art. 224).
Spin off joint liability. New companies stay jointly liable for three years for obligations transferred to a sister company, up to the net assets received (LGSM art. 228 Bis).
Second merger within five years. It needs prior SAT authorization (CFF art. 14-B).
Selling soon after a spin off. A change in the 51 percent shareholder base within three years makes the spin off a taxable sale (CFF art. 14-B, fraction II).
New equity items. An equity line that was not in the approved statements breaks neutrality (CFF art. 14-B).

Sources

← Incorporation checklist for Mexico: the legal clocks, government costs and filings from name approval to the first employeeAnnual compliance for Mexican companies and branches: the corporate, tax, investment registry and beneficial owner calendar →