Corporations in Panama and Law 32
August 26th, 2010
Law 32 of 1927 and its modifications establish the current rules governing corporations established in Panama. Understanding each of its articles provides greater clarity on the advantages and limitations in the management of a corporation in this country.
Art. 1 of Act 32 of 1927 states: “Two or more persons of legal age, of any nationality even though not domiciled in the Republic, may form a corporation for any lawful purpose, in accordance with the formalities prescribed in this Law.” As you see, local law requires two individuals to appear before the notary to create a corporation, regardless if they reside or not in Panama. The solution presented by lawyers, when the request comes from overseas, is to use two people from our team as subscribers, who once formed the company present their resignation to any rights they may have, including their rights to the shares of the company, making available the total share capital of the society to be delivered to the real shareholders.
If the client is located in Panama, as a resident or in transit, in just a few hours he may have all the documentation to be signed. The process of company registration takes only a few days. Also, article 249 of the Panamanian Commercial Code allows a corporation to be provided by other legal persons (other Panamanian corporations, foundations and foreign corporations or any other legal entity duly constituted).
In this first article of Law 32 we see its flexibility in allowing the creation of Corporation under Panama Laws, is open to the needs of every customers, by having minimized the necessary formalities on the subject of appearance before the notary, as first step.
This article does not make a distinction between one corporation or another, without describing them as offshore, family or individual; these qualifications come from the uses that the company will have and its corporate terms (administration, purpose , disposal of shares et. all.). Law 32 applies to all corporations alike without distinction.
Tags: corporations, law, law 32, panama
