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.
Step 2. Liquidation of a Panamanian Corporation before the Public Registry of Panama.
Step 3. Notification of dissolution before the Directorate General of Income (DGI).
Step 4. Notice of cessation of operations before the Social Security Fund (CSS).
Article 88 of Law 51 of December 27, 2005 provides that “all cessation of operations, whether temporary or permanent, of employers registered with the Social Security Fund, must be formally notified in writing to the Institution before or in a term of thirty (30) calendar days following the effective date of said cessation ”.
Step 5. Notification of Cessation of operation before The “Panama Emprende” System before The Ministry Of Commerce And Industries (MICI).
Step 6. Notice of cessation of operation before the corresponding Municipality.
Law 106 of October 8, 1973 and Municipal Agreement 40 of April 19, 2011 establish the obligation of all taxpayers to notify the cessation of operation of their activity, at least fifteen (15) days in advance.
Failure to comply with the required notifications, may result in administrative fines in different government entities.
Jose Agustin Preciado