Mexican terms, explained for US readers.
Plain-English explanations of the Mexican tax, corporate and anti-money laundering terms in your report. Where a Mexican term looks like an English word but means something else, we say so.
Active
The taxpayer is registered and operating, with tax obligations in force. Active status alone does not mean the taxpayer is up to date; check the tax compliance opinion for that.
Advanced electronic signature (e.firma, formerly FIEL)
A digital certificate SAT issues to each taxpayer after verifying identity in person. It is used to sign tax filings and other legal acts electronically and has the same legal effect as a handwritten signature.
Amparo (constitutional protection lawsuit)
A federal court action to protect constitutional rights against acts of authorities, including laws, tax assessments and court rulings. Companies file amparos routinely, so an amparo alone is not a negative finding.
Attachment or seizure of assets (embargo)
A court or tax authority order that freezes or seizes a debtor's assets or bank accounts to secure or collect a debt. In this context it does not mean a trade embargo.
Attorney-in-fact (apoderado)
The person who holds a power of attorney and can legally act for the company within its limits. The type and scope of the power determine which documents that person may sign.
Authorized certification provider (PAC)
A private company authorized by SAT to validate, stamp and forward electronic invoices (CFDI) to SAT. Every valid CFDI carries a PAC stamp and a unique folio number (UUID).
Board of directors (consejo de administración)
A body of two or more directors appointed by the shareholders to manage the company. Its chair, members and their powers appear in the company's registered deeds.
Business purpose (razón de negocios)
Under Article 5-A of the Federal Tax Code, SAT may recharacterize transactions that lack a business purpose, meaning their main expected benefit is a tax benefit rather than a reasonable economic benefit.
Cancelled (RFC closed)
The taxpayer's RFC registration was closed, for example after the company was liquidated or merged into another, or after an individual died. A cancelled taxpayer can no longer issue valid invoices.
Civil litigation
Disputes between private parties over non-commercial contracts, property, leases, damages or family matters, heard mainly by state civil courts.
Client identification file (expediente de identificación)
The file a business subject to the AML law must build and keep for each client, with ID, proof of address, RFC, incorporation deed, powers of attorney and beneficial owner information.
Commercial litigation
Disputes arising from business transactions, such as unpaid invoices, promissory notes, commercial contracts and debt collection, heard by state or federal courts under the Commercial Code.
Definitive
SAT concluded the taxpayer did not rebut the presumption and confirmed it as an issuer of invoices for nonexistent transactions. Its invoices are considered to have no tax effect.
Digital seal certificate (CSD)
A certificate SAT issues to a taxpayer, separate from the e.firma, used only to digitally seal its electronic invoices (CFDI). Without a valid CSD, a taxpayer cannot issue invoices.
Electronic commercial folio (FME)
The unique record number the Public Registry of Commerce assigns to each company. Every act registered for that company is filed under this folio.
Enforceable unpaid tax debt (crédito exigible)
A tax debt that is due and has been neither paid nor secured with a guarantee accepted by SAT. SAT may start collection, including seizure of assets.
Favorable court ruling
A court, usually the Federal Administrative Court (TFJA) or a federal court, annulled SAT's listing of the taxpayer, so SAT moved it to the list of taxpayers with a favorable judgment.
Federal Administrative Court (TFJA)
Mexico's federal court that hears lawsuits against tax assessments and other federal administrative acts, including challenges to SAT list inclusions. Its rulings can be reviewed by federal courts through amparo.
Federal Tax Code (CFF)
Mexico's main procedural tax law. It sets the rules for RFC registration, invoicing, audits, penalties, tax crimes and the SAT public lists under Articles 69, 69-B and 69-B Bis.
Final criminal tax conviction
A final, non-appealable criminal judgment convicting the taxpayer of a tax crime, such as tax fraud or issuing false invoices. SAT publishes these taxpayers on its Article 69 list.
Final tax liability (crédito fiscal firme)
A tax assessment that can no longer be challenged, because the appeal deadline passed or the courts upheld it. The taxpayer legally owes the amount and SAT can collect it.
Financial Intelligence Unit (UIF)
Mexico's financial intelligence unit within the Ministry of Finance. It receives AML reports, analyzes suspicious transactions, maintains the Blocked Persons List and can refer cases to prosecutors.
Forgiven tax debt (crédito condonado)
A tax debt or penalty that SAT forgave in whole or in part under a legal program. The taxpayer no longer owes the forgiven amount, but its name was published.
Improper transfer of tax losses list (Art. 69-B Bis)
Public list of taxpayers SAT determined used a restructuring, merger, spin-off or change of shareholders mainly to transfer tax losses improperly to another party to reduce its taxes.
Income tax (ISR)
Mexico's federal income tax on companies, generally at 30%, and on individuals, at progressive rates up to 35%. It is the main tax reviewed in SAT audits.
Incorporation deed (acta constitutiva)
The notarized public deed that creates a Mexican company. It contains the bylaws, initial shareholders and capital, and usually the first directors, statutory examiner and powers of attorney.
Individual (persona física)
A natural person, that is, a human being. It includes individuals who run a business or work as self-employed professionals under their own name and RFC.
Investment-promotion corporation (S.A.P.I.)
Sociedad Anónima Promotora de Inversión, a corporation governed partly by the Securities Market Law that allows venture-style terms such as drag-along, tag-along, share buybacks and transfer restrictions. Common for startups and private-equity-backed companies.
Invoicing certificate revoked (CSD sin efectos)
SAT rendered the taxpayer's digital seal certificate ineffective (Federal Tax Code art. 17-H), for example for failing to file returns or being not located. The taxpayer cannot issue valid invoices until it corrects the issue.
Issuer of invoices for simulated transactions (EFOS)
Spanish acronym for a company that invoices simulated operations: a taxpayer SAT places on the 69-B list because it presumes the taxpayer lacked the assets, staff or capacity to provide what it invoiced.
Know Your Customer (KYC)
The process of verifying the identity, ownership and risk profile of a client or counterparty before doing business. In Mexico it is mandatory for financial institutions and for businesses carrying out vulnerable activities.
Labor and employment litigation
Employment lawsuits, such as wrongful dismissal, unpaid wages or benefits claims, heard by federal or state labor courts. Repeated labor suits may point to labor contingencies.
Legal company name (denominación / razón social)
The exact legal name of a company as it appears in its incorporation deed and SAT records. Both Spanish terms mean the legal name. SAT shows the entity type (e.g., S.A. de C.V.) in a separate field.
Legal entity (persona moral)
Any company or organization with its own legal personality, such as a corporation (S.A. de C.V.), a limited liability company (S. de R.L.), a civil partnership or a nonprofit. It does not mean 'moral person'.
Legal representative registered with SAT
The individual a company has registered with SAT as its legal representative for tax matters, usually its director or an attorney-in-fact. SAT records include that person's RFC.
Litigation search (juicios)
A review of court records for lawsuits in which the company or individual appears as a party. Mexican court records are spread across federal and state courts, so coverage varies by state.
Mexican Anti-Money Laundering Law (LFPIORPI)
The Federal Law for the Prevention and Identification of Transactions with Resources of Illicit Origin. It requires businesses carrying out vulnerable activities to identify clients, keep records and file notices. Substantially amended in July 2025.
Mexican corporation (S.A. de C.V.)
Sociedad Anónima de Capital Variable, the most common Mexican company type. Shareholders' liability is limited to their contributions, and 'variable capital' means capital can change without amending the bylaws.
Mexican electronic invoice (CFDI)
The mandatory digital tax invoice, an XML file validated and stamped by an SAT-authorized provider (PAC) and reported to SAT in real time. Generally only CFDI support tax deductions and VAT credits. Commonly called 'factura'.
Mexican Institute of Industrial Property (IMPI)
Mexico's patent and trademark office. It registers trademarks, patents and industrial designs and decides infringement cases. Its public database, MARCia, lets anyone search Mexican trademark filings.
Mexican limited liability company (S. de R.L. de C.V.)
Sociedad de Responsabilidad Limitada, a company owned by up to 50 partners holding equity interests rather than shares. Often used by US groups because it can be treated as a pass-through for US tax purposes.
Mexican Ministry of Labor (STPS)
Mexico's federal Ministry of Labor and Social Welfare. It runs the REPSE registry, conducts labor inspections and enforces workplace safety and labor rules.
Mexican notary (notario público)
A lawyer appointed by the state after rigorous exams who drafts and authenticates deeds, verifies identity and legality, and keeps official records. Far more than a US notary public, who mainly witnesses signatures.
Mexican Social Security Institute (IMSS)
The federal agency that collects employer social security contributions and provides health care and pensions to private-sector employees. Unpaid IMSS contributions are a common labor contingency in due diligence.
Mexican Tax Administration Service (SAT)
Mexico's federal tax authority, part of the Ministry of Finance (SHCP). It issues RFCs, runs the electronic invoicing system, audits taxpayers and publishes the official lists of non-compliant taxpayers.
Mexican Tax ID (RFC)
The taxpayer identification code issued by Mexico's tax authority (SAT). Companies have 12 characters and individuals 13, built from the name and the incorporation or birth date plus a 3-character verification code.
Movable Collateral Registry (RUG)
Mexico's national online registry, run by the Ministry of Economy, where security interests and liens over movable assets such as equipment, inventory and receivables are filed. A search shows whether a company's assets are pledged.
National Registry of Foreign Investments (RNIE)
Ministry of Economy registry where Mexican companies with foreign shareholders, and foreign companies regularly doing business in Mexico, must register and file periodic updates.
Not located (no localizado)
SAT status for a taxpayer that could not be found at its registered tax domicile, or that left it without notice. It is commonly treated as a red flag for inactive or shell companies.
OFAC SDN List
The U.S. Treasury Department's Specially Designated Nationals and Blocked Persons List. US persons generally must block the property of listed persons and may not deal with them. It includes Mexican cartels and related companies.
Official Gazette (DOF)
The Mexican federal government's official journal, where laws, regulations, tax rules and SAT's definitive 69-B and 69-B Bis lists are published.
Politically Exposed Person (PEP)
An individual who holds or held a prominent public office in Mexico or abroad, plus close family and associates. Mexican AML rules require enhanced due diligence on PEPs. This report does not include PEP screening.
Power of attorney (poder)
Authority a company or individual grants, usually in a notarized deed, for someone to act on its behalf. Corporate powers typically cover lawsuits and collections, acts of administration, acts of ownership, and negotiable instruments.
Presumed
First stage of the 69-B procedure. SAT notified the taxpayer and published that it presumes its transactions were nonexistent. The taxpayer has a short legal period to submit evidence.
Proof that transactions actually occurred (materialidad)
Mexican tax concept requiring taxpayers to prove an invoiced transaction really took place, using evidence such as contracts, deliverables, correspondence and payment records. Often rendered as 'materiality', but unrelated to audit materiality.
Public deed (escritura pública)
A legal instrument executed before a Mexican notary and kept in the notary's official records. Incorporations, bylaw amendments, powers of attorney and real estate transfers are formalized this way.
Public Registry of Commerce
Mexico's official commercial registry, run by the Ministry of Economy through state offices. Incorporation deeds, bylaw amendments, powers of attorney and other corporate acts are recorded there.
Rebutted
The taxpayer proved to SAT that its transactions were real, so the presumption was dropped and SAT moved it to the list of taxpayers that rebutted the presumption.
Registry of Specialized Service Providers (REPSE)
Labor Ministry registry that, since the 2021 outsourcing reform (Federal Labor Law art. 15), providers of specialized services or works using their own staff must join. Clients of unregistered providers risk non-deductibility and joint labor liability.
Risk analysis
Sherlock's summary assessment of the findings in this report, assigning a risk level based on public-record sources. It is an informational tool, not a legal opinion or an official government determination.
SAT list of non-compliant taxpayers (Art. 69, Federal Tax Code)
Public list SAT publishes under Article 69 of the Federal Tax Code naming taxpayers with final or enforceable unpaid tax debts, not-located status, cancelled or forgiven tax debts, or a final criminal tax conviction.
SAT list of taxpayers with simulated transactions (Art. 69-B, EFOS)
Public list of taxpayers SAT presumes issued invoices for nonexistent or simulated transactions. Invoices from definitively listed issuers have no tax effect, so customers lose deductions and VAT credits unless they prove the transactions were real.
SAT tax mailbox (buzón tributario)
The taxpayer's official electronic inbox on the SAT portal. SAT uses it to serve notices, requests and audit findings, and taxpayers use it to respond. Notices count as legally served even if unread.
Security interest in movable assets (garantía mobiliaria)
A creditor's right over a debtor's movable property, such as equipment, inventory or receivables, often through a non-possessory pledge. It gains priority against third parties once filed in the RUG.
Sherlock certificate (constancia)
Sherlock's verifiable certificate summarizing the searches run on an RFC at a specific date and time, with a QR code to confirm its authenticity online. Results reflect the sources as of that moment.
SIGER (electronic commercial registry system)
The Ministry of Economy's Integrated Registry Management System, the electronic platform that connects all Public Registry of Commerce offices and holds the acts registered for each company.
Sole director (administrador único)
A single person appointed by the shareholders to manage and legally represent the company instead of a board of directors. Common in smaller and closely held Mexican companies.
Statutory examiner (comisario)
A person, often an accountant, appointed by the shareholders of a Mexican corporation (S.A.) to oversee management and report yearly to the shareholders' meeting. Sometimes called 'statutory auditor', but not an external auditor.
Suspended (no activity reported)
The taxpayer notified SAT that it stopped all business activities, so most filing obligations are paused. It still exists legally and can resume activities. A suspended supplier should not be issuing invoices.
Tax and administrative litigation
Lawsuits challenging tax assessments or other government acts, mainly before the Federal Administrative Court (TFJA). They show disputes with SAT or other agencies.
Tax compliance opinion (opinión de cumplimiento, Art. 32-D)
A SAT document, issued on request, stating whether a taxpayer is current with its tax registration, filings and payments. The main results are positive or negative. Required for government contracts and often requested by private counterparties.
Tax domicile (domicilio fiscal)
The address registered with SAT as the taxpayer's official location for audits and notices. For companies it is generally where the business is mainly managed. SAT may visit to verify it.
Tax regime (régimen fiscal)
The tax category under which SAT registers a taxpayer. It determines how the taxpayer is taxed and which invoices it can issue. Examples: General Regime for Legal Entities, Simplified Trust Regime (RESICO), Salaried Employees.
Tax status certificate (constancia de situación fiscal)
A SAT document showing a taxpayer's RFC, name, tax domicile, tax regimes, obligations and status. Mexican businesses routinely exchange it with clients and suppliers. It does not certify that the taxpayer is up to date.
Taxpayer status (situación del contribuyente)
A taxpayer's standing in the RFC registry as recorded by SAT: active, suspended or cancelled. It shows whether the taxpayer is currently operating for tax purposes.
Taxpayer that used simulated invoices (EDOS)
Spanish acronym for a company that deducts simulated operations: a taxpayer that received and used invoices from an EFOS. It must prove the transactions actually happened or correct its tax returns.
Trademarks (marcas)
Registered signs, such as names, logos or slogans, that identify goods or services. In Mexico, rights arise mainly from registration with IMPI, which lasts 10 years and is renewable.
Transaction substance file (expediente de materialidad)
The organized evidence a company keeps to show SAT that its transactions with a supplier were real: contracts, purchase orders, deliverables, photos, correspondence and proof of payment.
UIF Blocked Persons List
A list kept by Mexico's Financial Intelligence Unit. Mexican financial institutions must freeze accounts of listed persons. It is not public, so public-record searches cannot confirm whether someone is on it.
Ultimate beneficial owner (beneficiario controlador)
The individuals who ultimately own, control or benefit from a company, directly or indirectly. Mexican entities must identify them and keep that information under the Federal Tax Code (arts. 32-B Ter to 32-B Quinquies) and the AML law.
UN Security Council Consolidated List
The United Nations list of individuals and entities subject to Security Council sanctions, such as asset freezes and travel bans, mainly for terrorism and weapons proliferation. Mexico applies it domestically.
Unique Population Registry Code (CURP)
An 18-character personal ID code the Mexican government assigns to every citizen and resident. It identifies individuals only, never companies, and is separate from the tax ID (RFC).
Value added tax (IVA)
Mexico's VAT, generally 16%, with a reduced 8% for eligible taxpayers in border regions and 0% for exports and certain goods. Businesses charge it on CFDI invoices and credit the VAT they pay.
Vulnerable activities (actividades vulnerables)
Businesses the AML law treats as high risk for money laundering, such as real estate, vehicle and jewelry sales, non-bank lending, virtual assets, notaries and certain professional services, when transactions exceed legal thresholds.
Written-off tax debt (crédito cancelado)
A tax debt SAT removed from active collection, typically because it was uncollectible or too small to pursue. Cancellation does not forgive the debt; the taxpayer still legally owes it.
Sherlock Searches is an information tool by Argonaut Fleet, Inc. It compiles official and public sources as they stand on the date of each search and does not certify the accuracy of what those sources publish. The risk level and the risk analysis are automated assessments for informational purposes. This page, the use cases and the checklists are general guidance, not legal, tax or compliance advice. Argonaut Fleet, Inc. is not a law firm and does not provide legal services. What your file needs depends on your transaction, your industry and the rules that apply to you, so consult a qualified attorney or accountant in Mexico or the United States. Legal references are current as of October 2026.