Doing Business

Doing Business in Mexico 2015

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81 Doing Business in Mexico 2015 Sole proprietorship As in many Western countries, the sole proprietorship (comerciante/persona física) is a very popular form of organization for small businesses. However, the element of unlimited liability generally inhibits the use of this form of organization for large operations, particularly in view of the substantial amount of severance pay that may accrue in favor of employees. Moreover, resident aliens may engage in business activities only if their immigration status is that of a permanent resident (inmigrado). However, in some instances it has been concluded that non-resident individuals with a taxable permanent establishment might operate under the same principles applicable to branches of foreign entities. Non-profit organizations Charitable and other non-profit organizations take the form of a civil association (Asociación Civil–A.C.), whose charter prohibits the distribution of profits to its members. 9

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