EpiphyCorp

Law 32 of 1927 establishes the powers that the Directors of the Panamanian Offshore Corporations will have in the performance of their duties:

1. Administration and management of the businesses of the Corporation (Art. 49).

2. Absolute control and complete management of the businesses of the Corporation (Art. 50).

3. Adopt, alter, or reform the incorporation regulations of the company (Art. 56).

4. Transfer goods in trust funds or burden them with pledge or mortgage in guarantee of the debts of the Corporation (Art. 70).

5. Determine the payment of utilities and dividends to shareholders (Art. 38).

6. Celebrate merging agreements, establishing the terms and conditions to be approved by the shareholders of the Corporation (Art. 71).

7. Propose to the shareholders the dissolution of the Corporation (Art. 80).

8. Act as trustee of the Corporation once it is dissolved, with authority to manage its final affairs, collect their credits, sale and transfer goods of all kinds, and to divide the corporation assets among the shareholders once all debts of the Corporation are paid and finally represent judicially the Corporation in lawsuits against them and to sue in its name for the payment of its credits (Art. 86).

9. Appoint funds and goods of the Corporation for payment of a reasonable compensation for his services arranging the dissolution of the Corporation.

Cabinet Decree 247 of July 16, 1970 also establishes the power of the Directors for:

10. The approval of the business or contracts that the Corporation celebrates with one or more of its Directors or Dignitaries or wherever they have participation in it (Art. 34).

We see then, that even though the Directors of the Offshore Corporations by principle have a particular autonomy regarding the management of the business of the company, they are limited in their actions by the civil responsibility that could generate abuse of the powers granted to them or by the non-fulfillment of the duties that the Law expressly points out toward the shareholders, or regarding third parties that contract with the Corporation.

So if shareholders or third parties maintain commercial relationships with an Offshore Corporation given the case, they could sue for damages suffered due to the actions of the Directors of the Offshore Corporation, who will respond before the Authorities of the Republic of Panama according to the extent of the personal responsibility established by the Panamanian laws.

Tags: corporations, directors, offshore