Key Business & Legal Definitions: Companies, Intellectual Property, Franchises

De Facto Society

When is a Society Considered 'De Facto'?

• When not incorporated by public deed.

How Many Members in a De Facto Society?

• From two members onwards.

Who Liquidates a Partner's Share in a De Facto Society?

• The other members of the society.

Industrial Property & Patents

What Can Be Patented?

• Under industrial property law, patentable inventions must be new, result from inventive activity, and be susceptible to industrial application.

What is a Patent?

• A patent is a certification granted by the government to natural and legal persons, allowing them to exclusively exploit entirely new products or processes for a period of 20 years from the filing date.

Which Agency Grants Patents?

• The Mexican Institute of Industrial Property (IMPI) is a decentralized public agency responsible for receiving, reviewing, and granting patents in Mexico.

Sole Proprietorship

How to Name a Sole Proprietorship?

• Name or trade name followed by "EU" or "Empresa Unipersonal" (Sole Proprietorship).

How Does a Sole Proprietor Receive Economic Compensation?

• A sole proprietor cannot receive a salary; compensation is solely through profits.

When Must a Sole Proprietor Reimburse Invested Capital?

• In cases of fraud by the proprietor.
• Causing harm to third parties.
• Transferring the business to another person who then commits fraud.

Corporate Reserves & Operating Permits

What Are Corporate Reserves?

• Reserves and provisions applicable to commercial companies also apply to foreign companies.

What Triggers Suspension of Operating Permits?

• If a company ceases its operations for more than a year without just cause, the superintendent may suspend its operating permit.

What is Corporate Dissolution?

• Revocation of the operating permit by the superintendent leads to the company's liquidation.

Trademarks

What is a Trademark?

• It is a distinctive sign that differentiates goods or services offered by one company from those of competitors in the market.

Examples of Trademark Signs

• Words or combinations of words.
• Images, figures, symbols, graphics, labels, wrappers, portraits.
• Sounds and smells.
• Letters and numbers.
• Color schemes.
• Distinctive signs and non-generic names.

Trademark Registration Duration and Grace Period

A trademark registration is valid for 10 years. There is a 6-month period for registration before being recorded by a natural or legal person.

Limited Partnership (Comandita)

Types of Limited Partnerships?

• Simple and by shares.

Types of Partners in a Limited Partnership?

• General partners (Comanditados) or managing partners.
• Limited partners (Comanditarios).

Key Features of a Limited Partnership

• Social Capital.
• Administration.
• Inspection.
• Profits, transfer of shares, and partner names.

Franchising

What is Franchising?

A contract where a business owner grants rights to another merchant.

Who are the Parties in a Franchise Agreement?

The franchisor and the franchisee.

Types of Franchises

• Service Franchise
• Industrial Franchise
• Distribution Franchise