The 4 'Mysterious' Books Your Startup Needs
Grow Your Business, Not Your Inbox
By Victoria Tejeida, commercial and institutional relations manager of Komenko
More and more entrepreneurs know that one of the first legal recommendations that their head attorneys will make is to establish a legal person, as this serves to separate the commitments that society acquires with theirs in a personal capacity thanks to the corporate veil. But for this protection to be effective, do you know what it entails?
Of course, it starts by setting up the company, but ( spoiler alert !) That is only the first step. Afterwards, different requirements have to be met (depending on the company), ranging from share titles, holding annual assemblies and ... bingo! The four mentioned and mysterious corporate books that I mentioned to you at the beginning.
I say mysterious because unfortunately the majority of entrepreneurs do not have them despite the fact that they are a fundamental requirement, of a probative nature, that allow businesses to have good administration and good internal control; These books are a record of the important events that occur within Mexican startups.
Next, I'm going to tell you some examples of each of them, so that you understand them a little better.
Imagine that your partners agree to request a loan from the company and some time later a partner regrets it and says that he did not agree to anything on this matter.
Let us remember that in each type of Assemblies different topics are seen. In an Ordinary Assembly, topics such as profit and loss balance, dividend payment, appointment or revocation of administrators, review and approval of the administrators' report, etc .; for its part, in an Extraordinary Assembly, specific issues are seen, such as reforms to the bylaws, a possible merger or dissolution, etc.
Whatever the case, you should make sure to keep the minutes and all the assemblies to file them in this book. In case of being an extraordinary assembly remember to carry out its protocolization
Council Session Book
Now imagine that you are the president of the Board of Directors of your startup, one day you arrive at the office and find out that a dissatisfied partner plans to take legal action against the administration of the company for not complying with its obligations agreed in the statutes.
This book compiles all the decisions that are made in a board session, such as the approval of a strategic plan, an investment, the allocation of some resources, approving in some cases transfers of shares, etc.
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Capital variations book
Suppose now that you, along with your two partners, need to convince an investor to enter the company with limited voting shares. Everything is going well until your lawyers ask you for the book of capital variations and all you want is to make a ball.
The capital stock represents the contributions of the partners and can be increased or decreased if so agreed in the meeting. The entries in this book mark the variations in capital of startups.
Shareholder registration book
At this point in the article you are probably fed up with so many hypothetical scenarios, but I promise you it is the last one.
Imagine that you have just bought your friend his 10 shares in the company “ABC SA de CV” and he gives you his share certificates. As time passes you realize that you have no news of the company, so you decide to go to the offices and they tell you that you are not a shareholder of the company, because they cannot find you in the stock registry book. At this point you may already have a microinfarction, but stop! Do not worry, this happens because when your friend sold you his shares, he forgot to notify the company so that due process was done in the share registry book, so at that precise moment your friend makes the request and everything is solved .
In article 129 of the General Law of Mercantile Societies it is mentioned that only those who are registered in the share registry book are considered owners of the shares. Therefore, the endorsement of the stock certificates does not necessarily mean that you are already a shareholder of a company, but, you must corroborate that indeed the transfer of said titles is registered in the stock registry book, this helps to create a relationship between the shareholder and the company, since there are occasions when a shareholder sells or transfers shares to another person and the company does not find out.
For all the above, having these books gives a plus to your venture, since with this, in the first place you comply with your legal obligations and secondly if in the future you want to raise more capital, having everything organized and in order It generates confidence in investors to be part of your project, or if you want to request a loan from a banking institution, on many occasions they usually ask you for these books to verify the status of your company's administration.
As you can see, the management and administration of a commercial company is not an easy task, that is why I recommend that you always have at hand the telephone number of a specialist lawyer you trust to help you with the legal administration of the company. herself.