Law 52 states that any legal entity that does not appoint a Registered Agent within a period of ninety (90) calendar days counted as of the date of the resignation, removal or termination of the previous Registered Agent, will have its corporate rights suspended.
The non-compliance of these requirements by the legal entity will be sanctioned with a fine of US$1,000.00 plus US$100.00 (legal currency of the United States of America) daily, counted as of the moment this situation occurs until the moment it is corrected.
The accounting records and support documentation must be maintained by the Registered Agent or by the person/entity in charge of their custody in strict confidentiality and may not be considered as public information; that may solely be provided to a Panamanian competent authority following a formal request delivered to the entity's Registered Agent.
It is important to note that this requirement does not affect in any way the offshore operations of these legal entities nor the way in which they operate. This requirement is limited to comply with a formality that is characteristic to these legal entities due to their nature.
Kindly be advised that Law 52, states that the non-payment of the legal entity's annual tax within the corresponding period will cause the non-registration of any document in the Panama Public Registry and the non-issuance of any certification relating thereto.
Subsequently, the Panama Public Registry will suspend the legal entity's corporate rights when it has not completed the payment of its annual tax for a period of three (3) consecutive years or if it has not paid the fines or sanctions that have been applied.
The registration in the Panama Public Registry of the suspension of the legal entity's corporate rights entails that while this suspension is in place, the legal entity may not:
- Initiate legal processes, carry out businesses or dispose of its assets;
- Present claims or exercise any right;
- Execute any binding corporate act;
Not withstanding, when the legal entity's corporate rights have been suspended, it may:
- Present a request for its reactivation;
- Continue with its defense in those processes initiated against it; and
- Continue with the legal procedures initiated before the suspension date.
The suspension of the legal entity's corporate rights does not affect the responsibility of its directors, officers, administrators, shareholders, partners, quotaholders, members of the foundation council, agents nor of any other person of similar nature concerning their relation with said legal entity.
Once the suspension of the legal entity's corporate rights has been registered in the Panama Public Registry, the legal entity may be reactivated within a period of two (2) years.
During this period, any director, shareholder, partner, officer, administrator, member of the foundation council, registered agent or any other party interested in its reactivation may request that it be reactivated.
Upon the reactivation of the legal entity, it will recover its full capacity and it may carry out its activities.
If the aforementioned period of two (2) years expires without the legal entity's reactivation, the Panama Public Registry will cancel its registration definitively and thus this legal entity will be considered as dissolved definitively with all the legal effects relating thereto.
At the moment of dissolution, the legal entity's liquidation procedure will be initiated as established by Panamanian Law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
