Panama LLC or corporation?

• Members to form it: two or more for both. An LLC that falls below two partners is dissolved unless a new partner joins within 60 business days.
• Maximum number of members: the law sets none for either.
• Minimum capital: none for either, and it can be stated in any currency.
• Management: a corporation has a board of at least three directors and a president, secretary and treasurer. An LLC has a partners’ meeting and one or more managers, who need not be partners and can be companies.
• Resident agent: a lawyer or law firm in both.
• Liability: each LLC partner answers up to the amount of the contribution made or promised.

Source: Law 4 of 2009, articles 4, 5, 9, 25, 29 to 43 and 44; Law 32 of 1927, articles 1, 2, 49 and 65

LLC quotas are assigned by private document, and the assignment is recorded at the Public Registry. The buyer becomes a partner only if the other partners accept it, and the articles can give the partners a right of first refusal. Corporate shares are not recorded at the Registry: the transfer binds the company once it is entered in its own share register.

Source: Law 4 of 2009, articles 11 and 26; Law 32 of 1927, articles 29 and 36

For an LLC, the Registry shows the articles, their amendments, the quota assignments that change who the partners are, and any dissolution. For a corporation, it shows the articles with the subscribers, directors, agent and capital, but not who owns the shares later.

Source: Law 4 of 2009, articles 5 and 11; Law 32 of 1927, articles 2, 6 and 36

• The partners’ meeting alone amends the articles, approves the balance sheets, removes managers and decides a dissolution, merger or conversion.
• The quorum is a majority of the paid capital, and decisions are taken by a majority of the capital unless the articles ask for more.
• Partners can decide in writing without meeting.
• A partner can withdraw with three months’ notice, and the others or the company have 60 business days to buy the quota.
• Managers answer to the company, the partners and third parties for fault, fraud or negligence.

Source: Law 4 of 2009, articles 20, 33 to 36 and 43

A foreign LLC can continue its existence in Panama, and a Panamanian LLC can continue in another country.

Source: Law 4 of 2009, article 50

• How the US and other countries classify a Panama LLC for their own taxes.
• The taxes of an LLC in Panama compared with a corporation.
• The Public Registry fees for forming each one.

• How to start a company in Panama
• Private interest foundations
• Documents to form a company