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Panama General Commercial Partnerships - Incorporation Information
legislative source |
public information | private
information | incorporation |
taxes and duties | advantages & disadvantages
Commercial Code of Panama - "Sociedad Colectiva" (Book 1, Title VIII,
Chapter III).
| Status: |
Commercial
general partnerships
are registered at the Public Registry, as a legal entity, known as the
Sociedad Colectiva. They may include the word "limitada" in
the name, indicating that they are limited liability partnerships.
It is also necessary to publish the Articles of
Association in the local newspapers for 3 consecutive days.
|
| Available: |
All information contained in the
Articles of Association, which are filed in the Public Registry (as well
as any amendments thereto) are available to the Public. This
includes all of the details indicated below. |
| Name: |
The name of
the company must include the names of the partners of the sociedad
colectiva. It is not possible to include a name of a person
that is not a partner. If the name of the company does not include
all of the names of the partners, it must add "and partners", "and
sons", "and company", or the suchlike, which indicates that there are
others. |
| Authorised Capital: |
The Articles
of Association (or Partnership Agreement) should include the capital of
the partnership, specifying the subscribed and paid-in amounts by each
partner, and the time and nature of future capital amounts to be paid in
by the partners.
There is no
minimum or maximum capital requirement established in the law.
|
| Subscribers: |
The Articles
of Association must be signed by each of the Partners. It must
also include a description of how the partnership will be managed, such
as whether joint or individual decision-making, and whether partners may
sign individually or whether there must be joint signature. |
| Management |
The
Sociedad Colectiva is managed by administrators, which must be
partners. The Articles of Association (Partnership Agreement) may
establish that all, one or various partners are the managers of the
Sociedad Colectiva. If nothing is established in the
partnership agreement, then all partners are understood to have the
authority to sign on behalf of the Sociedad Colectiva. |
| Voting rights. |
The Articles
of Association should establish the voting rights of each partner,
otherwise it will be assumed that each partner has equal voting rights,
as opposed to voting according to capital participation. |
| Registered Agent: |
Does not appear to be required by the
law. But it is necessary to publish the Articles in the place
where the principal place of business of the company will take place.
|
| Financial records: |
In the
Sociedad Colectiva, basically all information is public. The
only information which remains private is the financial records.
|
| Bylaws: |
The Corporate Bylaws are not available
for the public to read, but anything which is not included in the public
record is not deemed to be binding on the company (for example, if a
different type of participation is agreed privately, the public document
will be deemed to prevail). |
| Minutes: |
All minutes from meetings are privately
held by the partners, and do not need to be filed at the Public
Registry, unless the Minutes include some amendment to the Articles of
Association, in which case an extract of the relevant part of the amendment
must be filed. |
| Time: |
The Articles of Association (Partnership Agreement)
must be filed in the Public Registry within 2 weeks of being signed, and
must furthermore be published 3 times in a local newspaper in order to
be valid before third parties. |
| Shelf Companies: |
It is obviously not possible to have shelf companies,
since all partners must sign the Articles of Association. |
| Tax Registration: |
After the Sociedad Colectiva has
been established and duly published, it is also necessary to register it
with the tax department. |
| Seal: |
The law is silent regarding the adoption
of a seal, although this in Commercial Law is deemed to mean that the
parties may adopt one if they so desire, as long as done by resolution
of the partners. |
| Travel to Panama: |
It would be necessary to either travel
to Panama to sign the partnership agreement, or to have the Partnership
Agreement duly authenticated (by the Panamanian Consulate or by
Apostille) in the country of residence of the partner, and then here in
Panama "protocolised" into a Public Deed, in order to be presented to
the Public Registry. |
| Capital Duty: |
There is no Capital Duty payable on the Sociedad
Colectiva,
although at incorporation the Public Registry Fees for incorporation are
established according to the amount of the authorised capital (which in
the case of this entity would be according to what the partners agreed
to pay in).
|
| ARF: |
There is no requirement to pay the annual renewal
fees of a Corporation, but the Sociedad Colectiva, if engaged in
commercial activity in Panama (which would be the purpose of
incorporation and publication in the local newspapers), is required to
pay an annual tax of $100.00 for its commercial license. |
| Tax Returns: |
Where the Sociedad Colectiva
earns income in Panama, it it required to prepare and present annual tax
returns in Panama. |
| Tax Treaties: |
Panama is not a member to any double tax
treaties, nor does it have any arrangements for the exchange of
information with other tax authorities internationally. This may
or may not be to the benefit of a beneficial owner. |
| Property Taxes: |
Where the Sociedad Colectiva owns real
estate in Panama, it will be subject to Property taxes, like any other
person in Panama. For more information regarding Panama's property
taxes, please see
our real
estate section. |
| Transfer Taxes: |
Where the
Sociedad Colectiva transfers land in Panama, this transfer is
not exempt from the land transfer tax (2%). While property in
Panama may be transferred to the Sociedad Colectiva in exchange for
participation in the partnership, this
transfer will still be subject to
the 2% land transfer tax.
Nevertheless,
any transfer made to the Sociedad Colectiva of other types of
assets (money, securities, etc.) are not subject to transfer taxes. |
| Exchange Controls: |
Panama has no
exchange controls, since the currency in circulation locally is the US
Dollar. Given the country's strategic location with respect to
shipping and trade, Panamanian banks generally accept wire transfers in
any currency, although it is not possible to have accounts in all
currencies. Major currencies are generally accepted in Panamanian
banks. |
| Joint & Severable Liability |
One of the
major disadvantages of the Sociedad Colectiva is that any one of
the partners can sign obligations on behalf of the partnership, and all
partners have unlimited liability with respect to these obligations.
|
| Perpetuity: |
It is necessary to establish in the Articles of
Association the duration of the Sociedad Colectiva. |
| Liability: |
These entities, as mentioned above, do not have
limited liability. Any of the partners can sign a contract for the
partnership, which all partners will be liable for.
However, the
law does provide that before a creditor is able to proceed after a
partner, it is first necessary to exhaust all collection avenues against
the Sociedad Colectiva. |
| Bearer Shares |
Bearer shares are not possible in this type of
entity, since it is necessary to indicate the partners in the Articles
of Association. So there is no "anonymity" or privacy provided in
this type of entity. |
For more information regarding Panamanian Corporations and our services,
please see Panamanian Corporations.
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Last modified
26-Sep-2007 17:38 -0400
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