Executive answer
A family business may operate as one enterprise while being legally divided among property, operating, service, commercial and treasury companies. Coordination does not eliminate the arm’s-length principle. Loans without terms, rents based on available cash, shared personnel and payments without deliverables create risk even when every entity is Mexican.
The answer is not to fill the file with backdated agreements. Reconstruct the perimeter, inventory flows, understand their purpose, set pricing and responsibility, and prospectively execute a policy matching accounting and conduct.
A diagnostic should prioritize materiality and exposure. First find omitted operations and chronic balances; then correct agreements, prices, invoicing, taxes and evidence with owners.
Map the family perimeter
Identify shareholders, relatives, trusts, holdings, operating companies, property companies, service companies, associations and foreign entities. Do not rely only on the chart.
Record management, control, capital, arrangements, beneficiaries and common decisions. Document why each relationship falls inside or outside the perimeter.
Update after succession, divorce, gifts, sales, new entities or board changes. Relationships can change while the commercial brand remains.
Inventory from the trial balance
Extract receivables, payables, interest, rent, services, purchases, sales, royalties, dividends, contributions, reimbursements and assets.
Cross-check counterparties, tax IDs, electronic invoices, agreements, banks and subledgers. Search generic accounts, shareholder balances and manual entries.
Map each flow with entity, amount, frequency, currency, tax, agreement, method, evidence and owner.
Do not exclude domestic operations. The arm’s-length principle is not limited to foreign parties.
Loans and balances
Determine whether debt exists from purpose, amount, term, currency, repayment, interest, guarantees, subordination and capacity.
A “temporary” balance remaining for years may be debt, capital or distribution depending on facts. Document its evolution and conduct.
Assess capacity before the rate. Compare bank alternatives, risk, term and collateral. A generic group rate is insufficient.
Execute the agreement, schedule, interest, invoicing where applicable, withholding, payment and reconciliation. Review thin capitalization and interest limitations separately.
Common treasury
Map concentration accounts, payments on behalf, daily transfers and offsets. Identify decision-makers and beneficiaries.
Establish cash-pool or current-account terms with limits, settlement, interest and controls. Do not let balances accumulate ownerless.
Separate reimbursement, treasury service and financing. Each may have different treatment.
Reconcile monthly and confirm among entities.
Property rent
Identify owner, user, area, location, term, currency, maintenance, tax, insurance, improvements and options.
Compare local properties with similar terms. A price per square meter does not explain fit-out or exclusivity alone.
Document who funds improvements and retains value. Avoid rent varying with cash without an economic formula.
Reconcile the agreement, invoice, payment, asset and use. Review shareholder property comprehensively.
Machinery and vehicle leases
Record the asset, value, life, use, maintenance, insurance, risk and residual. Distinguish a lease from an operated service.
Compare rent or calculate a coherent return. A percentage of historical value can become obsolete.
Control mixed or personal use. The business must prove business purpose and allocation.
Analyze market value and tax effects upon transfer.
Shared services
Inventory accounting, HR, IT, procurement, legal, management, marketing and administration. Define activities, provider, beneficiary, output and cost.
Prove existence and benefit. Payroll in one company does not establish services to all.
Build cost pools and consumption-based keys such as payroll, tickets, hours, users or transactions. Separate shareholder activity.
Set markups from comparables and functions. Reconcile invoices, VAT, withholding, payment and evidence.
Zugzwang’s Family Group TP Scan turns companies, balances and accounts into a map of transaction, agreement, price, tax, evidence and action.
Management and boards
Separate shareholder governance, strategic management and operating services. Attending a board as owner differs from managing an entity.
Document agendas, decisions, time and beneficiaries. Avoid management fees based only on sales percentages.
Where an executive serves several companies, formalize employment or secondment and allocate cost with evidence.
Do not duplicate salary, professional fees and service fees for the same work.
Purchases and sales
Map products, terms, discounts, credit, inventory, warranty and logistics. Compare third-party sales where available.
A marketing company should perform real functions. Invoicing between plants does not create a margin automatically.
Define list price, discounts, cost plus or commission from facts. Monitor margin and true-up.
Reconcile inventory, electronic invoices, delivery and payment.
Brands, software and intangibles
Identify who owns and develops brands, recipes, processes, software, customer bases and know-how. Review rights.
A royalty needs a license, benefit, base, rate and tax treatment. Do not extract profit merely to move cash.
Where several entities contribute, document contributions. A family name used as brand may have specific rights and risk.
Avoid duplicating licenses and services already including use.
Guarantees
Record who guarantees debt, the amount, term, benefit and implicit support. A signature does not always produce a fee.
Measure improved rate or access. Compare fees and guarantor capacity.
Document corporate approval and exposure. Do not omit guarantees because no cash was paid.
Review recoveries if called.
Contributions, dividends and shareholder payments
Distinguish capital, debt, advances, dividends, business expenses and personal payments. Use documents and approvals.
Do not classify a cash transfer later according to convenience. Define purpose first.
Reconcile corporate books, banks and accounting. Review withholding and conditions.
Transfer pricing does not turn personal spending into a deductible service.
Payroll and shared people
Map employer, supervisor, location, functions, time and beneficiary. Identify labor and tax risk in addition to price.
Use timesheets or reasonable drivers. Direct charges may suit dedicated personnel.
Separate shareholder bonuses from employment remuneration and document policy.
Reconcile payroll, social security, invoices and services.
Reimbursements and expenses on behalf
Define when an entity acts as agent and when it receives the service. Retain the original invoice, beneficiary and payment.
Pass-through without markup requires no significant functions and is not automatic.
Avoid deducting the same expense in two entities or transferring it with incorrect VAT.
Settle reimbursements monthly before they become financing.
Method selection
Use CUPs for reliable rents, rates or comparable sales. Cost plus may suit routine services or production. Resale price or TNMM may suit distribution depending on data.
Explain tested party, base, comparables and adjustments. Do not use one median for every operation.
Prioritize internal comparables and local market evidence where available.
Document each operation rather than an abstract group.
Materiality and priorities
Classify by amount, recurrence, deduction, balance, missing agreement, cash, intangibles and risk. Use a traffic light.
Address first loans without capacity, services without evidence, anomalous rent, asset transfers and omitted transactions.
A small recurring operation may show weak control. Address it with proportionate documentation.
Give every gap an owner and deadline.
Operational TP
Monitor balances, interest, rent, services, margins, invoices and payments monthly. Set ageing and deviation alerts.
Bring each entity’s finance team, tax, legal and the responsible shareholder together. Approve exceptions.
Before close, simulate true-ups, VAT and withholding. Execute rather than merely calculate.
Maintain one group calendar.
Agreements, electronic invoices and legal execution
Prepare prospective agreements covering parties, purpose, deliverables, price, tax, term, termination, disputes and authorized signatures. A template should not hide differences among companies.
Reconcile each agreement to electronic invoices, accounts, payments and returns. The invoice description should identify the operation without replacing delivery evidence. For adjustments, document the period and calculation.
Verify powers and corporate approvals. An arrangement signed by the same individual for both entities needs a process demonstrating authority and managing conflicts.
Do not backdate documents. For historical periods, describe facts using existing evidence, quantify exposure and assess correction; prospectively change conduct and systems from a clear date.
Minority shareholders, conflicts and governance
Where minority shareholders or family branches exist, related pricing changes their economic distribution. Establish approval by the board, a committee or independent directors as appropriate.
Document abstentions, alternatives and business rationale. A benchmark helps but does not replace governance. Review shareholder transactions, not only subsidiary flows.
Define a dispute process for services, balances and rent. Unresolved differences can accumulate cash and family friction as well as tax risk.
Report material transactions, exceptions, expirations and payments to the board. Transparency protects continuity.
Data and system controls
Use consistent identifiers for entity, counterparty, agreement, invoice, transaction and currency. Configure specific intercompany accounts and mirror reconciliations.
Block recurring transactions with unclassified counterparties or expired agreements. Alert stale balances, unpaid invoices and entity mismatches.
Separate raw data, mappings and adjustments. Manual changes should record user, reason and approval.
Confirm balances monthly. Entities should recognize the same amount, period and nature; explain FX and tax differences.
Sample-based internal audit
Quarterly, select loans, rent, services, purchases and shareholder expenses. Trace request, approval, agreement, price, invoice, delivery, booking, tax and payment.
Ask which operation lacks a beneficiary, which balance has no repayment capacity, which rent changed without market evidence and which service duplicates local payroll. Record amount, year, cause and action.
An adversarial review should search for omissions rather than only validate the known catalog. Compare bank records and subledgers with the matrix.
Year-end decision process
At September or another suitable pre-close date, forecast each material operation and balance. Decide whether an adjustment, settlement, contract amendment or recharacterization is needed.
Coordinate income tax, VAT, withholding, electronic invoicing and cash. An accounting entry in one entity without counterparty recognition is not execution.
After filing, compare the forecast with final results, explain manual corrections and update thresholds. Carry unresolved items with a named owner, not as anonymous prior-year differences.
Succession and restructuring
Before moving shares, assets, functions or agreements, identify value, rights and effects. Family restructuring can transfer a business.
Document rationale, alternatives, valuation and approvals. Do not default to book value.
Update agreements and accounts from the effective date. Avoid hybrid periods.
Retain a narrative for heirs, boards and audits.
Defense file
Include the perimeter, matrix, agreements, trial balances, invoices, payments, deliverables, benchmarks, methods, returns and reconciliations.
Sample services, rent, loans and sales. Trace from origin to payment.
Preserve annual versions and do not manufacture retroactive evidence.
Prepare an index, RACI and calendar.
Ninety-day plan
Month one covers perimeter, balances and priorities. Month two addresses prospective agreements, benchmarks, pools and corrections. Month three executes invoices, reconciliation and the dashboard.
Do not wait for perfection before stopping balance accumulation. Apply rules to the next operation.
Document historical decisions from existing evidence and disclose limitations.
Report risks, cash and owners to the board.
Illustrative example
The family property company rents a plant to operations, the holding employs executives and another entity advances interest-free cash. Each flow seems logical but lacks agreements, pricing and execution. The diagnostic separates rent, services and debt, compares market terms and corrects systems.
One year-end invoice does not solve the model.
Conclusion
Family proximity facilitates business but may hide transactions. A common map turns informal trust into verifiable governance without losing agility.
Every movement should have a purpose, agreement, price, tax, evidence and payment, and the board should know the exceptions.
Request a Family Group TP Scan to turn trial balances, companies and balances into a prioritized plan for agreements, prices, evidence and control.
Verified official sources
- Mexican Chamber of Deputies, current Income Tax Law, Articles 76, 179 and 180.
- Mexican Chamber of Deputies, current Federal Fiscal Code.
- OECD, Transfer Pricing Guidelines 2022, Chapters I-III, VII and X.
Verification closed on August 2, 2026. Confirm relationships, facts, agreements and obligations for each entity and year.