Find out the Key Aspects of Law 32 of Public Limited Companies
Panama is known worldwide not only because of its fiscal benefits but also because of its legal stability. Law 32, which regulates Public Limited Companies in Panama, is a clear example of the country's stability, since the law was passed in 1927 and it's still valid to this day. Understanding law 32 is key to establish a company properly and legally. Following are the most important aspects of this regulation:
- A Public Limited Company may be formed by two or more people of any age, nationality or gender.
- The company shall consist of a President, a Secretary and a Treasurer who shall be elected by the Board. The same person may hold two or more positions if that possibility is registered in the Corporate Agreement.
- A Corporate Agreement must be signed stating the names and addresses of each of the subscribers to the agreement, the name and address of the Company, the corporate purpose, the capital stock, the par value of the shares, its duration, the name and address of the agent in Panama and name and address of the directors.
- All the documents within the Corporate Agreement must be filed with the Commercial Registry. This agreement may be amended at any of its terms.
- Foreign Public Limited Companies may have offices and undertake commercial and economic activities in Panama after having presented in the commercial registry a copy of the Corporate Agreement, the copy of the last balance sheet with the issued capital stock to be used in the country and the certificate of incorporation issued and authenticated by the Consul of Panama in that country.
- Every Public Limited Company may acquire, purchase, hold, use and transfer chattel and real estate. It may also accept and get pledges, mortgages, leases and taxes.
- The Public Limited Company may create and issue one or more classes of shares, with or without par value. Bearer shares may be issued only when they have been fully paid.
- The company must have an office in Panama or elsewhere the Corporate Agreement determines. It must also have a Stock Registry with the names of the shareholders of the company and their personal data. If bearer shares were issued, the Stock Registry must indicate the number of shares, the date of issue and clarify whether they have been fully paid.
- The board meeting of shareholders shall be convened in writing and on behalf of the President, Vice President or a person authorized by the Corporate Agreement. It will record the reason for the meeting and the place and time it was held.
- Except that the Corporate Agreement states otherwise, all shareholders are entitled to vote at shareholders meetings and may even be represented by an agent appointed by a public or private document.
- The Board of Directors must be made up of at least three members of age who will have control over the affairs of the company. In order to make business decisions, the majority of the board members must be present.
- Two or more companies may merge to form a new company by signing an agreement which shall contain the terms of the merger. This agreement shall be submitted to the shareholders of each of the constituent corporations to vote their approval and then enroll the new company in the Registry.
- The Board of Directors may dissolve the company only if the majority of the votes is obtained. The shareholders board must approve the dissolution agreement and its copy shall be published at least once in a newspaper of the location of the company's office.
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