When diving into the Mexican corporate world, it's important to familiarize yourself with specific terminologies and conventions. In particular, the concept of a company's name holds great significance. Here we will go over the two categories used for naming a company in Mexico.
The Basics:
In Mexico’s corporate legal system, legal entities, such as companies, can have one of two kinds of names: “denominación” or “razón social”.
“Denominación” vs. “Razón Social”:
Understanding the difference between razón social and denominación is crucial when naming your company in Mexico. Here's a breakdown:
Razón Social:
Primarily used for associations and civil societies, but also seen in certain commercial societies.
Common in specific types of companies such as the comandita simple (simple partnership) and the de responsabilidad limitada (limited liability).
As mentioned earlier, the concept of razón social is mostly associated with the name(s) of the partner(s) or member(s) of the company.
Example: Pérez, Pérez, S.C.
Denominación:
This aligns more with a brand or trade name rather than the names of the partners or owners.
It allows for more creativity, as it doesn't require the inclusion of any partners' names, making it more flexible for branding purposes.
Example: El Universo, S.A.
While both razón social and denominación serve as the official names for legal entities in Mexico, each business structure has its own set of laws that determine what kind of name the business entity is allowed to have. Be sure to consult with the Ley General de Sociedades Mercantiles when naming a business entity in Mexico.
In conclusion, whether you're starting a business in Mexico or rebranding an existing one, understanding the nuances between razón social and denominación not only ensures legal compliance but also aligns with your branding and business identity. Whatever name you choose, make sure it not only complies with the legal regulations dictated by your business structure resonates with your company's ethos and the value you aim to bring to the market.
As always, for more information regarding corporate law in Mexico, don’t hesitate to email us at Info@BlackSheepLaw.Co . Think outside the box!
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