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organizing a sociedad


Isabella is establishing Pharma Heal Corporation's first foreign manufacturing plant in Mexico. She wants the business there to be a partnership in which she and Akosua are general partners, and several U.S.-based institutions (which will invest in the enterprise) are limited partners. Isabella particularly wants the Mexico operation to have U.S. citizenship so that it enjoys special benefits and protections contained in treaties between the United States and Mexico including the North American Free Trade Act (NAFTA). Her local lawyer in Mexico has advised her that a limited partnership under Spanish civil law is called a sociedad en commandita, and that is how she proposes to organize the business.

As her international business consultant, Isabella e-mailed you for advice on whether or not the Mexican operation should be organized according to the advice of counsel in Mexico that she should establish a sociedad en commandita. Use course materials to assist you with this assignment.

Write an e-mail to Isabella answering Isabella's inquiry including an analysis of the consequences of organizing a sociedad and an evaluation of other forms of business organization in Mexico that may come closer to realizing Isabella's business objectives.

Solution Preview

Hello Isabella,

I am providing a brief overview on Sociedad en Commandita Simple, the business form that you wish to establish for your manufacturing plant in Mexico.

Sociedad en Commandita Simple has two types of partners: the active partners who have unlimited liability, and the silent partners who are liable only for their capital contribution. This corporate form is actually not frequently used in Mexico. This is a commercial company with at least one general partner and one or more limited partners. The liability of the general partner is unlimited with respect to the obligations of the entity, while that of the limited partners is limited to their capital contribution. Limited partners cannot participate in ...

Solution Summary

Email to Isabella: analysis of organizing a sociedad or other business forms in Mexico