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Societies in the Countryside: A Brief Guide to Agrarian Law

By Odilisa Gutiérrez - Odilisa Gutiérrez Mendoza & Asociados
Founding Partner and CEO


Odilisa Gutiérrez By Odilisa Gutiérrez | Founding Partner and CEO - Wed, 08/16/2023 - 14:00

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The land in Mexico, in its varied shades of green and brown, houses stories of generations, traditions, and struggles. These stories, beyond the specificities of civil and commercial law, also find their narrative within the framework of Agrarian Law. If you're thinking of venturing into this fascinating world, forming a society, and embarking on agricultural, livestock, or forestry projects, it's vital to understand the guidelines governing this sector.

Societies, at their most basic, are groups of individuals who come together to achieve a common goal. Though this definition is simple, it gains complexity when applied to agrarian activities. Regardless of whether the land for the project falls under civil or social rights, it's not just about joining forces and pooling resources. It's also about navigating a sea of regulations and provisions to ensure a fair and sustainable use of the land.

If you've ever dreamt of expanding your agricultural business or starting one from scratch, you might've thought of establishing a legal entity. These entities, whether they manifest as commercial or civil societies based on business activities, provide legal frameworks that streamline the management and operation of commercial undertakings.

But here's the nuance: not all land is viewed equally under the law. Land dedicated to agricultural, livestock, or forestry pursuits have their specific set of regulations. And it's worth noting that even if the land is private, the agrarian legislation still plays a role.

For instance, these societies must ensure that their land does not exceed the limits defined for individual small ownership. This means each member, in their individual capacity, mustn't own more than the law permits, with the base being a hundred hectares if it's irrigated land. Moreover, the society's primary objective should revolve around the production, transformation, or sale of agricultural, livestock, or forestry products.

Agrarian Law also introduces a compelling concept: the "T" series. These equate to shares that mirror the capital invested in land for agricultural, livestock, or forestry, reflecting the contributed land’s value. In essence, the T series serves as a measure for the society and regulatory bodies to oversee and regulate land ownership within the society, ensuring it doesn't surpass the allowable limits of individual small ownership. It's a strategy to strike a balance between commercial expansion and land ownership, thereby curbing the emergence of large estates within legal entities.

Regarding foreign individuals in these societies, the guidelines are transparent. Their involvement is restricted to owning no more than 49% of the shares, a provision set to champion and prioritize national interests in the agrarian arena.

A pivotal component in this intricate system is the National Agrarian Registry. Every society owning land intended for agricultural, livestock, or forestry purposes must be registered. But this isn't just a bureaucratic procedure. This enrollment empowers the state to monitor land parcels and their proprietors, ensuring they adhere to norms and rules regarding the surface area limits designated for individual land ownership.

In the vast expanse of Agrarian Law, it's crucial to highlight small property boundaries. In Mexico, these boundaries have meticulous specifications, which can vary depending on the type of cultivation or livestock activity. Notably, any enhancements made to a property won't influence its classification.

In summary, diving into the agricultural, livestock, or forestry sectors to establish a society and undertake earth-centric projects demands both preparation and profound knowledge. Mexico's land parcels aren't merely patches where crops grow and are harvested; they're spaces brimming with tales, birthing societies, and scripting the future. A solid grasp of Agrarian Law is the foundational step to ensure your venture in these societies prospers.

The inclusion of those in the agricultural sector in societal shares is noteworthy. It not only eases access to land but also contributes tools that favor a specific demographic, leading to enhanced living conditions for landholders and development prospects for those keen on founding such societies.

Another method of association in agrarian matters is forming ejido unions, aimed at coordinating productive activities, commercialization, mutual aid, and other legal endeavors. There are no constraints on the number of times an individual ejido can be part of one or more unions.

To initiate these unions, assembly consensus is required. This consensus can lead to the creation of independent specialized companies to support their main objective and facilitate the seamless integration of a production chain.

Companies sprouting from ejido unions can choose any of the associative structures that the law offers, be it in civil or commercial matters. However, Agrarian Law lays down essential criteria concerning name, domicile, lifespan, objectives, capital, liability mode, and other requirements. If one opts for a legal structure outlined in the Agrarian Law, they must meet these criteria to validate the association. Rules for its dissolution and liquidation are also defined.

This legal structure is particularly intriguing because, in addition to facilitating the union of two agrarian entities to forge a society, it also promotes the amalgamation of various associations to form rural production entities. Within this structure, both limited and unlimited liability societies can be included.

It's essential to advise those interested in venturing into investments via societies entailing social land (pertaining to ejidos or communities) to seek expert counsel in agrarian matters. This area is governed by unique rules, emphasizing the protection of ejido landowners.

Photo by:   Odilisa Gutiérrez

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