COMPANY DISSOLUTION PANAMA CORPORATION
Law 32 of February 26, 1927 on corporations provides in section IX the procedure to be carried out if the board of directors of any corporation deems it advisable for the company to be dissolved.
However, in addition to the dissolution process that a corporation must comply with before the Public Registry, there is an obligation to notify the different government entities in which the company is registered, namely: Directorate General of Revenue (DGI), Ministry of Commerce and Industries (MICI), Social Security Fund (CSS), the local Municipality, among others.
In order to have a better understanding of the process to be carried out, we would like to provide you with a guide to the different steps to follow in a process of dissolution and liquidation of a commercially active Panamanian corporation.
Step 1. Dissolution of a Panamanian corporation before the public Registry of Panama.
To start the process of dissolution of a Panamanian corporation, it is necessary for it to be up to date regarding the payment of the annual franchise tax (tasa única) before the DGI.
The shareholders’ meeting must authorize the dissolution agreement, which must comply with the formalities required by law. Once the dissolution agreement is approved, a copy will be issued, which must be protocolized and registered in the Public Registry of Panama.
Step 2. Liquidation of a Panamanian Corporation before the Public Registry of Panama.
Every dissolved Panamanian corporation, will continue for three (3) years for specific purposes such as defending its interests as a defendant, transferring assets, collecting credits, dividing its capital, but we reiterate that it will not be able to continue with the businesses for which it was incorporated. This period may be less than three (3) years, it will depend on each individual case.
Once the liquidation process is complete, shareholders must approve a resolution confirming that (i) the company has been liquidated; (ii) that all accounts receivable have been collected; (iii) that all debts have been paid and (iv) that the remaining assets have been distributed to the shareholders.
Step 3. Notification of dissolution before the Directorate General of Income (DGI).
Article 717 of the Tax Code of the Republic of Panama sets forth that “any natural or legal person who, due to the termination of business, is no longer subject to the Income Tax related thereto, must present, within thirty (30) days following said termination, the affidavit and the final balance, and must pay the corresponding tax at once until the moment of ceasing operations. This is not applicable to Non-Resident Panama companies (ones operating offshore the country).
For more information on how to dissolve a company, please contact:
Fidex Group SA, Tel:+507-227-1741, Email: firstname.lastname@example.org