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Law on Limited Liability Companies (LLC)

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Law No. 4 of 9 January 2009 which repealed the old rules , in force since 1966 .

Then, they highlight the salient features of the new law:

1. The LLC can participate in any type of activity in any civil or commercial part in the world.
2. It should be composed of a minimum of two (2 ) persons who may be Panamanian or foreign legal or natural , of Panama or abroad , either in person or by proxy. Subscribers to the Covenant does not have to be partners.
3.  The LLC must have a minimum of two ( 2) members. There is no maximum requirement of partners
4. The company has no minimum or maximum authorized capital.
5. The authorized stockholders’ equity may be represented in the currency of any country.
6. The authorized stockholders’ equity it should not be fully paid by shareholders when incorporating the company. The participation fees may be paid in labor or assets and money. The value of contributions in kind or service is set by the members of the assembly. The LLC can be formed with principal paid in part or full , but each member must pay the entire contribution to be entitled to vote in the deliberations of society. On the other hand , in relation to capital entitled to members in the event of a capital increase , they are entitled to subscribe for a proportionate share of their participation . Do not set a deadline for payment of capital.
7. The authorized stockholders’ equitys is divided into shares of participation , with a nominal value assigned to them in the social pact. The participation fees are nominal and are represented by certificates, which are not securities . The transfer of the participation shares is subject to approval by the partners , so the transfer of share certificates does not operate by endorsement and delivery of the document.
8. The property paid participation fees must be paid in full immediately .
9. The participation fees may be paid in labor or assets as well as money . The value of contributions in kind or service is set by the members of the assembly .
10. The responsability of members is limited to the amount of their contributions . So we proposed changes in terms of significant tax contributions which may be mentioned is the fact that taxes must be paid by each of the partners in proportion to their participation as partners sharing the profit and loss it is in proportion their participation , so that the financial responsibility of the partners for the obligations of the company is limited to the amount of their participation.
11. The participation fees may be given in usufruct or pledge. The letter may impose restrictions or limitations on this. They can also set restrictions on the transfer of shares of share of the inheritance.
12. The identity of the members should appear in the social pact, so that the incorporation of new members requires a modification of the articles of incorporation.
13. The members have preferential subscription rights for the new shares to issue participation by society and the right to acquire preferred shares that a shareholder will sell.
14. The company can be constituted for life or for a definite term.
15. The business of the partnership will be managed by one or more managers , which may be natural or legal , national or foreign, and not have to be partners.
16. The statute shall contain the following minimum information:
 a. Name of the Society.
 b. The identification of grantors and partners , along with their homes.
 c. Address of society.
 d. Duration of the Company. and Amount authorized share capital and the shares into which it is divided and the value of each.
 f. The designation of the person or persons responsible for the administration.
 g. The appointment of one or more officials or representatives and powers of the general or special.
 h. The appointment of a lawyer or law firm as resident agent of society.  The other provisions it deems appropriate .
17. Society will have legal life since registration of incorporation in the Public Registry .
18. Each member has paid all participation fees will be entitled to vote at meetings of members in proportion to the value of their participation in society.
19. Decisions of meetings of the members shall be approved by the vote of the members representing most of the paid capital. The statute may establish the requirement of a qualified majority vote.
20. There is no obligation to hold annual meetings or regular partners. The meetings shall be held when called by the administrator or requested by shareholders representing 5% of the paid capital .
21. Members may be represented at meetings by proxy, who need not be members.
22. Any member may withdraw from society and is forced to buy their shares in the event that approval of the extension of the duration of the company beyond the limit established in the social pact, changing its corporate purpose, increase or reduction of capital, the transformation of society to another type of legal entity or merger of the company and the partner would have voted against . To this end, the Member shall notify its decision to withdraw within 30 days from the date on which the respective resolution was adopted.
23. Members are prohibited from engaging in activities that are competitive with the business of the company.
24. members may be expelled from society by decision of the assembly of members and the loss of its share without compensation :
a. If you compete with society.
b. They pay their quotas of participation at the appropriate time.
c. They declare bankruptcy.
d. Cripple or hinder the development of the operations of the company .
e. Violated his duty of loyalty and due care to society.
25. Partners or the manager of the company may challenge before the courts the resolutions adopted by the shareholders when sin contrary to the articles of association or the law. The lawsuit must be filed within 30 days from the date of adoption of the resolution.
26. Administrators have the legal representation of the company and are the ones who will be responsible for carrying out the activities of the association .
27. Administrators can be reappointed indefinitely or for a specified period and may be removed at any time by decision of the shareholders’ meeting.
28. The Company may be dissolved at any time. Administrators are responsible for the liquidation and will be held accountable to shareholders for its management. There is no deadline to conclude the agreement.
29. The company can be combined with any legal entity, national or foreign; become another type of society and the change of address.
30. Foreign SRL can return to set back in Panama.
31. Taking into account the territorial base or the source of income that is our fiscal legislation, income or revenue, receiving operations SRL executed, consume or produce their effects outside of Panama and the benefits paid to the partners of that product, the income shall be exempt from taxs in Panama.