Panama limited liability company (S. de R.L.)

What is a Panama limited liability company?

It is a company with its own legal personality whose capital is divided into quotas (participations) among its members. Each member is liable for the company's debts only up to the amount of their contribution, made or promised. Unlike a corporation, it does not issue shares: the quotas belong to identified members.

Requirements under Law 4 of 2009

• At least two members, who may be individuals or legal entities of any nationality and domicile. The law sets no maximum number.
• A name that includes "Sociedad de Responsabilidad Limitada" or "S. de R.L." and is not confusingly similar to an existing company.
• Articles of organization, granted by notarized private document or public deed, stating the members, their contributions, capital, purpose, duration and managers.
• One or more managers, who may be individuals or legal entities.
• A resident agent in Panama, who must be a lawyer or a law firm.
• Registration at the Public Registry of Panama, when it acquires legal personality.

How does it differ from a corporation?

• Capital: an S. de R.L. has quotas held by members; a corporation has shares held by shareholders.
• Transparency: the members of an S. de R.L. appear in the registered articles; shareholders of a corporation are generally not listed in the Public Registry.
• Management: an S. de R.L. is run by managers; a corporation needs a board of at least three directors and officers.
• New members: in an S. de R.L. admitting a member usually requires the other members' consent, as set in the articles; corporate shares are transferred more freely.

When does an S. de R.L. make sense?

It is often useful when a few members want to control who joins the company, when they prefer simpler management than a corporation, or when the country where the members live gives this type of company particular treatment. Since every case is different, we explain both options before you decide.

Steps to form it

1. We discuss your project and confirm whether an S. de R.L. is the right structure.
2. We check that the name is available at the Public Registry.
3. Each member provides the resident agent with the identification documents required by Law 23 of 2015.
4. We draft the articles with the contributions, quotas and rules for members joining and leaving.
5. The articles are notarized and registered at the Public Registry of Panama.
6. You receive the registered articles and the registration certificate.

Obligations after registration

• Paying the annual government fee that applies to companies.
• Keeping a resident agent in place.
• Keeping accounting records under Law 52 of 2016.
• Keeping beneficial owner information up to date (Law 129 of 2020).

Legal basis

• Law 4 of 2009, governing limited liability companies.
• Law 23 of 2015, on due diligence and anti-money laundering.
• Law 52 of 2016, on accounting records.
• Law 129 of 2020, on the beneficial owner registry.