The limited liability company is a part of the Law that regulates businesses and protects their owners from the different responsibilities of said companies. People who own a business under a limited liability company can lose what they have invested in the industry: The money or capital contribute. It means that the creditors or the general meeting cannot use the partners’ assets or the owner to cover the company’s losses.

In this type of company, if a business is sued or goes into bankruptcy proceedings after reviewing the different annual accounts. A shareholder or partner may not force to take charge of his account or sell his assets to cover his part of the company’s debt. Businesses that qualify for limited liability include corporations (LLCs) and limited liability companies.

Limited liability allows you to raise capital for purposes that are consider too risky for investors, that they want to provide funds on an unlimited liability basis. If the shares are salaried in part, Means that the shareholders are liable only to the extent that they have not paid the par value of their claims.

If the shares are ultimately salary, the shareholders can not be require to pay any additional funds under limited liability.

Limited Liability

  • limitation of the firm’s liability, consisting in the fact that it promises to answer for the obligations it has assume, to compensate for the losses caused only within the amount of capital invest in the firm ;
  • limitation of payments of insurance indemnity and sums insured, provide for by the terms and conditions of the property and life insurance

Limited liability is inherent both in those organizational and legal forms, which in their name contain the words “limited liability, etc. And in those that are devoid of such verbal design. The former in different countries include a company.

The second group includes, among others, public corporation (PJSC), public corporation (Inc – public corporation) Limited Liability Company.

In this section, we present some characteristics that are typical of the company, in terms of its Constitution, organization, administration, and operation, So that whoever is interested in establishing a company.

Whether a natural person or a legal entity, consider the distinctive elements of this type of society.

It falls under the regulation of that Law and will be subject to the provisions of the Commercial Code and other commercial laws that may be applicable.

Applicable, and in what is not forecast, the Federal Civil Code will be applicable.

Constitution of The Limited Liability Company

limited liablity

Once the company’s social contract has remained sign, the partners must appear before a notary public for the Constitution and sign said contract before him.

The official legal public will register the company in the Public Registry of Commerce of the federal entity in question.

The Requirements for the Constitution of a Limited Liability Company are:

  • Carry out a meeting of partners where the social statute project is support.
  • Process before the Ministry of Economics the authorization to create the company.
  • Carry out the protocolization before a notary public of the company.

 The Advantages of a Limited Liability Company

One of the main advantages is the partners’ liability limit to the contribution made, so they do not commit their assets to the obligations of the limited company.

Other Advantages of this are:

Its minimum constitutional capital is 3,000.00 pesos, something significantly less than what is require to form other types of commercial companies, such as the corporation that is 50,000.00 pesos.

Its operation and regulations are more flexible than those of a public limited company.

The statutes of the company can adapt to the partners’ needs.

They are consider close commercial companies since for the shares to be sold or transfer to someone else or to invite. a new partner, and the other partners must authorize it.

It allows additional contributions to deliver money or other goods the partners undertake to give to the company once they have paid their contribution to its share capital.

Administrative Body of the Limited Liability Company

The administration of the limited company is in charge of one or several managers who may be partners or people outside the company. Managers appointed temporarily indefinite period may be revoke by the company unless otherwise agree in the articles of incorporation.

If administrators were not appoint the company’s administration would charge all the partners.

The administrative body shall empower grant general or special powers of attorney favor of partners or persons outside the company.

Before a notary public in the articles of incorporation or outside of it. Following the formalities of the articles of incorporation or articles of incorporation of the General Law of Commercial Companies and the Federal Civil Code.


Limited liability is a legal status where a person’s financial a fixed sum, most commonly the value of an investment in a corporation, company, or partnership.

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