Mexican Legal Framework of Business Insolvency - White & Case

after his death, if the creditors’ claims have not expired. In such events, any
obligations attributed to the merchant shall be payable by his estate, limited to
the value of such estate [LCM 12].
iii. Unlimited Partners of an Insolvent Entity
The concurso of an entity results in the concurso of its unlimited shareholders or
partners. An unlimited shareholder or partner can be released
from the concurso if it pays the debts with its own assets [LCM 14].
In addition to special types of entities under specific laws, Mexico recognizes
five basic types of commercial companies: (1) general partnerships; (2) limited
partnerships; (3) limited liability partnerships; (4) limited liability corporations; and
(5) cooperatives [LGSM 2].
All the partners of a general partnership and the general shareholders or general
partners of a limited partnership are unlimited shareholders or partners and thus
subject to being declared en concurso together with the issuing company. The limited
shareholders or limited partners of a limited partnership, all the partners of the limited
liability partnership, all the shareholders of a limited liability corporation and all the
members of a cooperative are exempt from unlimited liability [LGSM 25, 51, 58, 87
and 207, and LGSC 14].
iv. Estate of Trust Devoted to Entrepreneurial Pursuit
The concept of merchant also includes “the estate of a trust when devoted to an
entrepreneurial pursuit” [LCM 4-II]. There is some criticism 12 on the manner in which
the Insolvency Law attempts to address the possibility of an insolvency of a trust
estate by declaring it a merchant rather than by stating that it is subject to being
declared en concurso (as it does with respect to the estate of a deceased merchant
(cfr. 10.b.ii)). In the author’s view, the most important legislative deficiency has been
12
Acosta (2001), pp. 191-195, and Quintana (2003), pp. 60-67.
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