Panama’s business and tax environment make it attractive for investors around the globe to establish corporations. However, for different reasons, it might be necessary to dissolve a company.
This process involves the following government authorities:
- Panama’s Public Registry
- The Ministry of Commerce and Industries (MICI), if the company had operations in the country
- The Social Security office, if the company managed employees in Panama
Conditions and steps to dissolve a company in Panama
According to Panama’s Commercial Code, a company can be dissolved due to:
- Unanimous agreement.
- Lack or loss of corporate purpose (pacto social).
- Merger with other companies.
- Court ruling.
The most common reason to dissolve a company in Panama is by shareholders’ agreement. Under these circumstances, the dissolution process includes 3 simple steps:
Step 1. In order to dissolve a company, it must not have any outstanding debts with the Government. This means the company must be up to date with any fiscal responsibilities including Social Security and the DGI (Panama Revenue Office).
Step 2. The Shareholders’ Board must approve a dissolution resolution accompanied by a certified copy including the names and addresses of the directors and officers of the corporation. This results in the dissolution covenant which must be drafted by a Panamanian lawyer and must be notarized.
Step 3. The dissolution covenant will be registered in the Panama Public Registry. This process cannot be completed if there are outstanding debts with the government.
Step 4. Once the Public registry confirms the dissolution, the company must publicly announce its dissolution in a local newspaper or in the government’s Gazette.
Step 5. The company must request the DGI to close its account for fiscal purposes.
It is highly recommended that a company closes any financial obligations with third parties prior to filing for dissolution in the Public Registry. However, it is not mandatory. Yet, the company remains liable for any financial obligations even after the dissolution.
The process to dissolve a company requires the assistance of a licensed Panamanian attorney. Our legal team with extensive experience in corporate law is ready to assist you with the dissolution of your Panamanian company.
Send us a note to firstname.lastname@example.org for further information and questions.