# Panama LLC or corporation?

Panama’s limited liability company, the sociedad de responsabilidad limitada or S. de R.L., is governed by Law 4 of 2009, which is in force. Like the corporation, it needs at least two members, has no minimum capital and must have a resident agent who is a lawyer. The big difference is ownership: a transfer of LLC quotas is recorded at the Public Registry and needs the other partners’ consent, while corporate shares change hands in the company’s own share register.

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## Side by side

- 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

## How ownership changes hands

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

## What the public can see

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.

[Photo: RB Photo](https://commons.wikimedia.org/wiki/File:Casco_Viejo,_Panama_City,_Panama_-_54300325876.jpg)· [CC BY 2.0](https://creativecommons.org/licenses/by/2.0) Source: Law 4 of 2009, articles 5 and 11; Law 32 of 1927, articles 2, 6 and 36

## How an LLC is run

- 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

## Moving a company to or from Panama

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

## Questions people ask

### Is Law 4 of 2009 still in force?

Yes. Only its article 28 was repealed, by Law 49 of 2009, and a 2020 law on startup companies still applies it.

### Does a Panama LLC need a resident agent?

Yes, and it must be a lawyer or a law firm, as with a corporation.

### Can a company be a partner of a Panama LLC?

Yes. Partners can be individuals or companies.

### Which one should I choose?

It depends on how you plan to hold and transfer ownership and on how your home country treats each form. Ask us and we will compare them for your case.

## What the law does not say

- 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.

## Official sources

- [Public Registry of Panama](https://www.rp.gob.pa/)
- [Official Gazette of Panama](https://www.gacetaoficial.gob.pa/)

Last verified: October 28, 2026

## Keep reading

- [How to start a company in Panama](/)
- [Private interest foundations](/private-interest-foundation/)
- [Documents to form a company](/documents/)

## Thinking of forming a company in Panama?

Book a free 15-minute call with a Panamanian lawyer. We will tell you what your company needs and what to prepare.

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