In Mexico mercantile corporations are formed by groups of individuals or legal entities, that meet the objective of carrying out commercial acts. Each Company is a legal entity with its own personality and independent assets. In mercantile corporations, property titles are issued. Each property title or share has the same monetary value of each of the other ones of the company’s capital stock.

Each individual or legal entity with the possession of one or more shares within the company will be designated as a holder, the more shares they have, the more influence they will have in the voting of the company. The shareholders may be majority or minority holders. The shares are usually transferable to people inside and outside the companies. Likewise, the shares generate a return to their holder, in other words, an economic reward for the shares they own.

There are several types of actions which will be detailed below:

a)Ordinary shares: these give the holder a participation in the decisions of the company and vote in the ordinary and extraordinary shareholders’ meetings.

b) Preferred shares: they will have a fixed dividend rate and with payment preference over the ordinary ones.

c) Limited voting shares: the holder of said shares will not have the right to vote within it, they will only have distribution of profits or losses.

d) Treasury shares: they are not subscribed at the time of the incorporation of the company, but of the issued share capital, only the legal minimum is subscribed.

The shares serve to certify the quality and rights of the shareholders of mercantile corporations.

On the other hand, an investor may also be a natural or legal person who invests his capital in acquiring financial securities in order to obtain profits. The investor puts his money in the financial market where he can buy or sell stocks, bonds, futures contracts, currencies, raw materials, among others in order to capitalize it and generate income from his investment and/or accumulate capital.

The difference between an investor and a shareholder is the way in which they decide to invest their capital where the shareholder will have decisions about the company and the company is partially owned by the shareholder and the investor is not directly involved with the decisions of the company.

Brenda Gonzalez

Gloria Ponce de León & Hernández