Opening of Stock Companies in Panama

Stock Companies in J. Gavrilidis

Law Office of J. Gavrilidis provides its clients with the service of incorporating anonymous companies, limited liability companies (LLC), private interest foundations, and corporate services in the Republic of Panama.

Opening of Stock Companies in Panama

Law No. 32 of 1927 regulates anonymous societies in Panama. To establish a Panamanian Anonymous Society, a minimum of two adults of any nationality is required, and they do not necessarily need to be physically present in the Republic of Panama. An Anonymous Society can be formed for any lawful purpose, following the formalities prescribed in Law No. 32 of February 26, 1927, which governs Anonymous Societies.

The Stock Companies must include the following:

  1. The name and domicile of each of the subscribers to the articles of incorporation.
  2. The name of the company, which cannot be the same or similar to that of another pre-existing company in a way that could lead to confusion.
  3. The name of the company should include a word, phrase, or abbreviation that indicates it is an anonymous society and distinguishes it from a natural person or a company of another nature.
  4. The name of the anonymous society can be expressed in any language.
  5. The purpose of the society.
  6. The amount of the social capital and the number and nominal value of the shares into which it is divided.
  7. The amount of the social capital and the nominal value of the shares can be expressed in the currency of the Republic.
  8. If there are shares of various classes, the number of each class, their designations, preferences, privileges, voting rights, and any restrictions or requirements of the shares of each class.
  9. Alternatively, it can be stipulated that these designations, preferences, privileges, voting rights, restrictions, or other requirements may be determined by resolution of the majority of interested shareholders or by resolution of the majority of directors.
  10. The number of shares that each subscriber to the articles of incorporation agrees to take.
  11. The domicile of the society and the name and domicile of its Resident Agent in the Republic.
  12. The duration of the society.

  13. The number of directors, which must not be less than three, with specification of their names and domiciles.

  14. Any other lawful clauses agreed upon by the subscribers.
One of the most important characteristics of a Panamanian anonymous society is that it can have any purpose and engage in any activity, as long as it is a lawful activity. The board of directors’ meeting and the shareholders’ meeting can be held anywhere in the world.

The articles of incorporation can be verified anywhere, inside or outside the Republic of Panama, and in any language. An anonymous society formed in accordance with the law that regulates anonymous societies in the Republic of Panama may amend its articles of incorporation in any of its clauses, provided that the amendments comply with the provisions of the mentioned law.

Shares of Stock Companies

The Stock Companies may: vary the quantity of its shares or of any class of its subscribed shares at the time of the reform; vary the nominal value of the subscribed shares of any class; exchange subscribed shares of one class that have nominal value for the same or a different quantity of shares of the same class, or of another class of shares without nominal value; exchange subscribed shares of one class of shares without nominal value for the same or a different quantity of shares of the same class, or of another class of shares with nominal value; increase the quantity or number of shares of its authorized capital; divide its authorized capital into classes; increase the number of classes of its authorized capital; vary the denominations of the shares, the rights, privileges, preferences, voting rights, and restrictions or requirements.

Stock Companies formed in accordance with Law No. 32 of 1927 shall have the following powers:

  1. Of suing and being sued in legal proceedings;
  2. The power to acquire, purchase, hold, use, and transfer movable and immovable property of all kinds, and to establish and accept pledges, mortgages, leases, liens, and encumbrances of all kinds;
  3. The power to appoint officers and agents;
  4. The power to enter into contracts of all kinds;
  5. The power to issue, without contravening the applicable laws or the articles of incorporation, bylaws for the management, regulation, and governance of its affairs and assets, for the transfer of its shares, for the convening of meetings of shareholders and directors, and for any other lawful purpose;
  6. The power to transact business and exercise its powers in foreign countries;
  7. The power to resolve its dissolution in accordance with the law, either by its own will or for other reasons;
  8. The power to borrow money and incur debts in relation to its business or for any lawful purpose; the power to issue bonds, promissory notes, bills of exchange, and other obligations (which may or may not be convertible into shares of the corporation) payable at a specified date or dates or payable upon the occurrence of a specified event, whether secured by mortgage or pledge or unsecured, for money borrowed or in payment of property acquired, or for any other lawful purpose;
  9. The power to guarantee, acquire, purchase, hold, sell, transfer, mortgage, pledge, or otherwise dispose of or deal in shares, bonds, or other obligations issued by other corporations or by any municipality, province, state, or government;
  10. The power to do whatever is necessary in furtherance of the objects enumerated in the articles of incorporation or in amendments thereto, or as necessary or convenient for the protection and benefit of the corporation, and in general, the power to transact any lawful business, whether or not similar to any of the objects specified in the articles of incorporation or in any amendments thereto.
Panamanian companies cannot engage in business in the fields of banking, trust administration, insurance, or fund management, nor can they act as investment funds, collective investment entities, or perform any other activity that may imply an association with a business in the fields of banking, finance, securities, trust, or insurance without prior approval from the local regulator.

The business of the company will be managed and directed by a Board of Directors composed of no less than three members, who must be of legal age.

Dignitaries, Agents, and employees may be replaced at any time by a resolution adopted by the majority of the directors, or in any other manner prescribed by the social pact or the bylaws.

Corporations will have a President, a Secretary, and a Treasurer who will be elected by the Board of Directors; and they may also have all the dignitaries, agents, and representatives that the Board of Directors, the bylaws, or the social pact determine, and who will be elected in the manner established in them.

Foreign Corporations

A foreign corporation may have offices or agencies and conduct business within the Republic, after having submitted to the Commercial Registry for registration the required documents for its respective registration.

At Gavrilidis Law Firm, we stand out as experts in the creation and management of Corporations in Panama, providing comprehensive advice. Our lawyers have extensive knowledge in Panamanian legislation, ensuring legal compliance and the optimization of tax benefits for your company. With our experience and dedication, we ensure a solid and efficient structuring of your corporation, accompanying you at every step of the process. Trust us for the protection and success of your investments in Panama.

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