With the approval of the Law 52 on the 27 of October of 2016, societies and private interest foundations that do not make operations that are perfected, consummated or take effect within the Republic of Panama, are obliged to keep accounting records.
According to the normative, which will come into force the first (1) of January of 2017, they are also obliged to keep their back-up documentation in the offices of their residing agent within the Republic of Panama or in any other place inside or outside of the Republic of Panama, as determined by its organization.
The Law also commands that accounting records and back-up documents be kept or available for a period of no less than five years, counting from the last day of the calendar year, in which the transactions for which these records were completed or the last day of the calendar year in which the legal persons finish their operations.
If the legal person decides to keep accounting records and back-up documentations in a place different from the offices of the residing agent, they will be obliged to notify in writing to the residing agent the physical address of the place where the account records and back-up documentation are, as well as the name and contact information of the person keeping them under his care.
Legal persons must notify in writing to the residing agent, within fifteen (15) available days, any changes in the physical address or contact information kept in the records.
Likewise, it establishes the obligation for all traders to carry a Daily and a Major, as essential accounting records, and a Record of Minutes and a Record of Shareholders, in the case of societies.
In the case of societies that do not have these records, they will be sanctioned with daily fines, until they give said requirements to the competent authority.
In the case that a competent authority, in this case the General Direction of Incomes of the Economy and Finances Ministry of the Republic of Panama, requires through the society’s residing agent the accounting records or back-p documentation, the society will be obliged to present them in a set of time no larger than fifteen (15) available days, counting from the notification of said information requirement.
Disobedience implies severe sanctions. Societies that do not fulfill the competent authority’s requirement of presenting the accounting records and the back-up information will be sanctioned with a fine of a thousand (B/100,00) daily balboas for every day that passes without presenting the accounting records and the back-up documentation.
Not paying said fine will cause the suspension of corporative rights to the defaulter legal person, for which no legal procedures can be started, nor businesses done, nor dispose of its assets; make legal claims, exercise any rights nor make any corporative acting which obliges the legal person.
Expired the two (2) years after the suspension of a society’s corporative rights has been decreed, after being previously sanctioned, the Public Record of Panama will proceed to definitive cancellation and, as consequence, said legal person will be definitely dissolved. After the society has been declared as dissolved, its process of liquidation will start according to the law.
If the required accounting books and back-up documentations are not received by the Competent Authority, the residing agents are also obliged to present in no more than fifteen (15) days the resignation of the residing agent, in the Public Record. This will cause the Public Record to suspend the corporative rights of the legal person.
The Law also reduces the end of morosely time in the payment of a single rate (Tasa Unica) at three (3) years, which can motivate the suspension of the legal person’s corporative rights, with all mentioned consequences.
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