Mexican Legal Framework of Business Insolvency - White & Case

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different policy considerations, but also considerations concerning social and other attitudes; and
secondly, the types of debtor, if any, that should be excluded from the application of the law. 11
In principle, only “merchants” are debtors subject to the Insolvency Law [LCM 9]. However,
some non-merchants are subject to the Insolvency Law, while some merchants are exempt
from its application.
a. Merchants
A natural person is a merchant if he has legal capacity to engage in acts of commerce
and does so as part of his ordinary and customary occupation [CCOM 3-I]. An entity is a
merchant if it is formed pursuant to commercial laws [CCOM 3-II]. Foreign entities, their
agencies and branches are merchants to the extent they perform acts of commerce
within Mexican territory [CCOM 3-III].
b. Non-Merchants
Non-merchants that are subject to the Insolvency Law include (1) former merchants;
(2) the estate of a deceased merchant; (3) unlimited partners of an insolvent entity; and
(4) the estate of a trust devoted to an entrepreneurial pursuit.
i. Former Merchants
A merchant who suspended or terminated the operation of his enterprise may be
declared en concurso upon the general default of the payment obligations assumed
by virtue of the operation of his enterprise [LCM 13].
ii. Estate of a Deceased Merchant
The estate of a deceased merchant may be declared en concurso if the enterprise
continued operating after the merchant’s death or, if the enterprise ceased operating
11
UNCITRAL (2005), p. 38 (footnotes omitted).