The Public Registry is ordered to create the “suspended” status for legal entities in their electronic registration system

By Executive Decree number 905 of September 20, 2019, the President of the Republic ordered the Public Registry of Panama to create in their Electronic Registration System, the “suspended” status to identify the legal entities on whom the suspension of their corporate rights may fall.

This “suspended” status will be applicable to all the following legal entities:

1. Those who have not designated a resident agent for a period greater than ninety (90) calendar days, after the resignation, removal or termination of the existence of their previous resident agent.

2. Those who fall on the late payment of their Annual Rate for a period of three (3) consecutive years, previous communication from the General Revenue Directorate (DGI).

3. Those who have not pay a penalty or fine, upon order of a competent authority.

The legal entities who have such condition indicated in their corresponding Mercantile Folio will have the following limitations:

– Impossibility to initiate legal proceedings, conduct business or dispose of their assets.

– Impossibility to make claims or exercise any right.

– Inability to carry out any corporate action that is binding on the legal entity.

However, despite such suspension, the legal entities still may do the following:

– Make reactivation requests.

– Manage their defense on any lawsuit filed against them.

– Continue with the legal proceedings instituted prior to the date of suspension of their corporate rights.

Failure to pay the Single Annual Fee of a legal entity will result in the non-registration in the Public Registry of its corporate acts, as well as the non-issuance of certificates of existence. Except for the registration of unilateral resignations of any member of its administrative organs or its resident agent, which may be registered despite the status of suspension.