The Cabinet Council has approved sending a bill that creates the obligation to maintain accounting records for legal entities that do not have operations in Panama.

The bill submitted days ago by the Executive establishes penalties ranging from suspension of corporate rights to the dissolution of the company in cases where there is failure to comply with the payment of taxes and presentation of accounting information. The project also obliges companies to keep accounting records for registered companies, even if they do not have operations in the country.

Companies registered in Panama that have foreign operations and that do not keep accounting records of their operations may be sanctioned with fines of up to $5,000, and $500 for each day that goes by without remedying the shortcoming.

Under the proposal, “… the Public Registry will suspend the corporate rights of companies that do not pay the single rate for a period of three years. The same fate will befall a company which is in arrears in the payment of an imposed fine or penalty. Once a suspension has been registered in the Public Registry, the company may not initiate legal proceedings, conduct business or dispose of its assets.

Prensa.com reports that “…When a suspension is ordered, a two year period of dissolution starts. During that time, representatives of the company can apply for its reactivation, for which they must pay a fine of $5,000 and remedy the cause of the suspension. If the end of the two-year period is reached without the company having been revived, the Public Registry will proceed with the definitive cancellation and its absolute dissolution.”

Source: Prensa.com