Bearer and registered shares transfer

According to Law 32 regulated companies since 1927, corporations have the power to create, issue, and subscribe to different types of shares. In this regard, Panama is one of the few countries that still offers the possibility of issuing both bearer shares and registered ones. However, it is a difference between the two of them when we want to start a company in Panama.

In bearer shares, the shareholder’s name does not appear on the share certificate, and therefore who possesses these shares is considered its owner by mere possession. In other words, who possesses the share becomes its owner. Unlike these shares, the certificate of registered shares has to be the name of the shareholder offering greater security to the possessor.

The transfer of a bearer share is very simple since the document does not state the name of the owner and its transfer is only physical. Meanwhile, Panamanian law does not require shareholders to register with a government or commercial entity. This allows the name of the shareholder to remain anonymous, for which it is advisable to carry an internal register in which a proper follow-up is performed about who the current shareholder is and to determine if the shares have been paid and released.

Unlike bearer shares, the transfer of registered shares is made through their endorsement of them. When the company is established, the article of incorporation shall indicate whether the shares will be registered or bearer while the shares that are issued in registered form may be exchanged for bearer shares or vice versa.

When we decide whether bearer or registered shares, it’s necessary to know what we are creating the company for in order to be able to choose the type of share that suits it best. Our firm Delvalle & Delvalle offers comprehensive legal services for your company to develop taking advantage of Panama’s location as the main banking and financial center in Latin America.

Contact us to examine your case in further detail.