Limited Liability Company in Mexico: Complete Guide 2025
What is a Limited Liability Company (S. de R.L.)?
A limited liability company in Mexico is one of the seven companies provided for by the General Law of Commercial Companies, where the partners do not compromise their personal assets and only respond for the payment of their capital contribution. Also known as S. de R.L. or SRL, this legal form responds only with the assets of the company, offering legal protection to entrepreneurs and businessmen.
What does limited liability mean?
Limited liability means that the partners of a company only risk the money they initially invested, without compromising their personal assets. In other words, what is limited liability refers to the protection that the partners of a commercial company have with respect to the debts and obligations of the company.
Practical example of limited liability: If an S. de R.L. company has debts of $100,000 pesos but only has $50,000 in share capital, the creditors will not be able to claim the missing $50,000 from the personal assets of the partners (houses, cars, bank accounts). This is the main difference with unlimited liability companies, where the partners do respond with all their personal assets.
What does S. de R.L. de C.V. mean?
Many companies use the acronym S. de R.L. de C.V., which means “Limited Liability Company of Variable Capital”. The main difference is that variable capital allows the share capital to be increased or decreased without the need to modify the articles of association before a notary public.
Common abbreviations:
• S. de R.L. = Limited Liability Company
• S. de R.L. de C.V. = Limited Liability Company of Variable Capital
• SRL = Abbreviated form of Limited Liability Company
Advantages of an S. de R.L.
Asset Protection, S. de R.L.
• Limited liability: Protection of the personal assets of the partners
• Separation of assets: Personal assets are protected from business debts
• Access control: Restriction on the entry of new partners
Operational Flexibility
• Adaptable administration: Can be administered by partners or external parties
• Flexible statutes: They adapt to the specific needs of the partners
• Special privileges: Special rights can be granted according to the contributions
• Inheritance: The social parts can be inherited to relatives
Tax and Legal Advantages of an S. de R.L.
• Recognized structure: Fully recognized legal entity in Mexico
• Agile process: Relatively easy to establish without excessive bureaucracy
• Ideal for SMEs: Perfect for small and medium-sized companies
• Family control: Ideal for family businesses and foreign entrepreneurs
These are just some advantages... There are many more! Learn all the benefits of constituting an S de RL
Differences between S. de R.L. and S. de R.L. de C.V.:
S. de R.L.
Capital
Fixed
Capital Modification
Requires modifying statutes
Flexibility
Lower
Procedures
More complex for changes
S. de R.L. de C.V.
Capital
Variable
Capital Modification
Does not require modifying statutes
Flexibility
Greater
Procedures
More agile for changes
Partners Structure S. de R. L.
• Number of partners: Minimum 2 partners and maximum 50 partners
• Responsibility: The partners are obligated only by the amount of their contribution
• Types of partners: Can be both natural and legal persons
• Social parts: The share capital is divided into social parts with nominal value assigned according to the contribution
Organization and Administration
• Flexible administration: In charge of one or several managers (can be partners or external)
• Supreme body: The partners’ meeting is the highest authority
• Company name: Must include “Sociedad de Responsabilidad Limitada” or “S. de R.L.”
• Legal personality: It is a legal entity independent of its partners
Characteristics of the Social Parts
• Cannot be represented by negotiable instruments
• Each partner can only have one social part (they are indivisible)
• They are only transferable with the requirements established by law
• Amortization is only allowed according to the social contract
• Approval of the other partners is required to sell participations
Share Capital and Contributions
Capital Requirements
• Minimum capital: $3,000.00 Mexican pesos per partner
• Total minimum share capital: According to the number of participating partners
• Initial payment: At least 50% of each social part must be paid at the time of constitution
• Types of contribution: Not necessarily monetary (may include equipment, machinery, real estate)
• Variable capital: Variable capital can be managed according to needs
How much capital is needed to create an S. de R.L.?
The minimum capital to constitute a limited company is $3,000 pesos per partner, with no maximum limit. For example, a company with 3 partners would need a minimum share capital of $9,000 Mexican pesos.
Reserve Fund
• Mandatory: 5% of income must be saved annually
• Purpose: Protect the financial stability of the company
• Administration: Supervised by the managers or administrators
Examples of Limited Liability Companies in Mexico
10 Examples of S. de R.L. Companies in Mexico:
Family restaurants – «Tacos Don Juan S. de R.L.»
Specialized consultancies – «Servicios Contables Modernos S. de R.L.»
Mechanical workshops – «Autoservicio Premium S. de R.L.»
Retail stores – «Boutique Fashion México S. de R.L.»
Construction companies – «Constructora Hermanos López S. de R.L.»
Marketing agencies – «Digital Solutions México S. de R.L.»
Local pharmacies – «Farmacia San Miguel S. de R.L.»
Specialized transports – «Logística Express S. de R.L.»
Software companies – «TechDev Solutions S. de R.L.»
Medical clinics – «Centro Médico Integral S. de R.L.»
Examples of limited liability companies by sector
Services sector:
• Accounting and legal offices
• Advertising agencies
• Specialized consultancies
• Cleaning companies
Commercial sector:
• Specialized stores
• Regional distributors
• Small and medium importers
• Family e-commerce
Industrial sector:
• Small manufacturers
• Specialized workshops
• Artisan food companies
• Family factories
Disadvantages and Limitations of an S. de R.L.
Growth Restrictions
• Limit of partners: Maximum 50 partners can limit growth
• Difficulty in attracting investment: Less attractive for large investors
• Restrictions on contributions: Contributions for the provision of services are not allowed
Tax Aspects
• High taxes: High taxes if the minimum amount of benefits is not reached
• Tax obligations: Specific tax responsibilities
Steps to create a Limited Company: Requirements and Procedures
Requirements to constitute a limited company:
For Mexicans:
• Full name and general information (date of birth, marital status, occupation)
• Two official identity documents (INE, passport, military card, driver’s license)
• CURP (Unique Population Registry Code)
• RFC (Federal Taxpayers Registry)
• Recent proof of address (no more than 3 months)
For Foreigners:
• All applicable previous documents
• Proof of legal stay in Mexico
• Apostilled documents as appropriate
How to create a limited company? - Step by step process
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Documents to create an S de RL
📋 Company Documents:
- Constitutive act protocolized before a notary public
- Proof of company name (SRE)
- Proof of registration in the Public Registry of Commerce
- RFC of the company
- Proof of fiscal address of the company
👥 Partner Documents:
- Valid official identification of each partner (INE/passport)
- Individual RFC of each partner
- CURP of each partner (natural persons)
- Proof of address of each partner (no more than 3 months)
- Birth certificate of each natural person partner
- In case of being a foreigner:
- Valid passport.
- Immigration form (FM2/FM3 or resident).
- Official translation of documents if they are in another language.
- Notice to the Ministry of Foreign Affairs (SRE) that they become foreign partners.
Bodies of the Company
Partners’ Meeting
Main powers:
• Approval and modification of the balance sheet
• Distribution of profits
• Appointment and removal of managers
• Modifications to the social contract
• Decisions on increases and reductions of capital
• Authorization for assignment of social parts
• Dissolution of the company
Operation:
• Mandatory minimum annual meeting
• Quorum required according to statutes
• Decisions by majority (except for legal exceptions)
Administration Body (Administrators)
Characteristics:
Can be partners or external persons
Temporary or indefinite designation
Legally represent the company
Respond to the company for acts contrary to the Law or the statutes
Responsibilities:
Daily operations of the company
Compliance with legal obligations
Management of the reserve fund approved by the assembly
Call for meetings
Tax obligations S. de R.L. de C.V.:
• Monthly declarations: ISR, IVA, withholdings
• Annual declaration: Complete tax information
• Electronic accounting: Digital record of operations
• Electronic invoicing: CFDI for all operations
• DIOT: Informative VAT declaration (when applicable)
Conclusion
The limited liability company is formed by a minimum of two and a maximum of 50 partners, exists under the name or title of a company, and the obligations or responsibilities of the partners are limited to the payment of a capital contribution, which constitutes the share capital of the company and, consequently, the share capital.
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We have a team of experts that will guide you in each step of the process. Contact us today and ensure the success of your investment!
Frequently Asked Questions about S. de R.L.
What is an S de RL company?
- It is a commercial company where the partners only respond for the debts up to the amount of their contributions, with a maximum of 50 partners and a minimum capital of $3,000 pesos per partner.
Benefits of S de RL?
- Protection of personal assets
- Simple and flexible structure
- Ideal for small and medium-sized companies
- Fewer formalities than S.A.
How does an S de RL work?
It is administered by one or several administrators designated by the Partners’ Meeting, which makes the important decisions. The partners participate in profits according to their contributions.
What does "S de RL" mean?
S de RL = Limited Liability Company. It is the official abbreviation of this type of Mexican commercial company.
What does "de RL" mean?
“de RL” = “de Responsabilidad Limitada”. Indicates that the partners have limited liability only up to the amount of their contributions to the share capital.
