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CORPORATE
MANAGEMENT STRUCTURE |
A. Shareholders
Generally
speaking, the management of the affairs of a corporation is vested in
the board of directors, and shareholders are attributed few
administrative functions per se.
However,
under Panamanian Law, the shareholders constitute the supreme power
of the corporation, and shareholder action is required in connection
with (a) amendments to the Articles of Incorporation; (b) removal of
directors; (c) if so provided by the Articles of Incorporation or
by-laws adopted by the shareholders, the adoption, amendment and
repeal of By-Laws; (d) extraordinary corporate matters such as the
sale, lease, exchange or disposal of capital assets, including its
clientele and privileges, franchises and rights; (e) if so provided
by the Articles of Incorporation, the transfer of assets in trust or
to pledge or mortgage them to guarantee the liabilities of the
corporation or third parties; (f) agreements for the merger or
dissolution of the corporation.
However,
other than the above and in absence of provisions to that effect in
the Articles of Incorporation or the By-Laws, there are no particular
requirements for the holding of a shareholders' meeting.
In absence of
a provision in the Articles of Incorporation or By-Laws,
shareholders' meetings must be held within the Republic of Panama.
Written notice of time, place and purpose is required to be given to
call a meeting of the shareholders of a corporation. Said notice is
given in the name of the President, Vice-President, Secretary or
Assistant Secretary, or of any person or persons authorized for this
purpose by the Articles of Incorporation or By-Laws. Notice of the
meeting must be given in the manner contemplated by the Articles of
Incorporation or By-Laws, and in default thereof, notice must be
given personally or mailed not less than 10 days nor more than 60
days prior to the date of the meeting to the shareholders' registered
address; and in the case of bearer shares, by publication in
accordance with the provisions of the Articles of Incorporation or
the By-Laws. 
Shareholders,
or their legal representatives, may waive notice of any meeting in
writing, and the attendance of all the shareholders at a meeting
thereof will operate as an automatic waiver of notice of the meeting.
Under
Panamanian Law, resolutions adopted in any meeting in which all
shareholders are present, whether personally or by proxy, are valid;
and resolutions adopted in a meeting in which there is a quorum,
having those shareholders who are absent waived notice, will be valid
for all purposes enumerated in the waiver. The quorum requirements
for shareholder meetings may be determined by the Articles of
Incorporation, and in default thereof, the presence of the majority
of the shareholders will constitute a quorum. If a quorum is present,
the majority vote of the shares represented will be sufficient to
constitute a valid resolution of the shareholders, unless otherwise
provided by law or a provision to that effect in the Articles of Incorporation.
Furthermore,
unless restricted by the Articles of Incorporation shareholders have
the right to be represented by a proxy holder at all shareholders'
meetings, who may be appointed by private or public instrument, with
or without power to substitute, and who need not be a shareholder of
the corporation.
Lastly, the
Articles of Incorporation may provide for cumulative voting for the
elections of members to the board of directors.
B. Board
of directors
Under
Panamanian Law, the management and administration of a corporation is
vested in a board of directors, composed of at least three natural
persons of full age, and subject to that which is prescribed by law
and provisions to that effect in the Articles of Incorporation. The
board of directors has absolute control and management of corporate
affairs, including the adoption, amendment and repeal of By-Laws.
A quorum for
board of directors' meetings, in absence of a provision to that
effect in the Articles of Incorporation, is constituted by the
presence of a majority of the members of the board of directors and
the resolutions of the majority of directors present at a meeting in
which there is the required quorum, are considered as resolutions of
the board of directors.
In addition,
directors may be removed at any time by the votes, given to that
effect, of the holders of the majority of the subscribed shares with
voting rights in the election of directors.
In absence of
a provision to the contrary in the Articles of Incorporation, it is
not necessary that the members of the board of directors be
shareholders. Additionally, if expressly authorized by the Articles
of Incorporation, it is possible for directors to be represented at
meetings of the board of directors through proxy holders, who need
not be directors, and who must be appointed by public or private
instrument, with or without power to substitute.
C. Officers
Under
Panamanian Law, corporations must have at least a President, a
Secretary and a Treasurer, who are elected by the board of directors,
and in addition, may have all the officers, agents and
representatives determined by the board of directors, the Articles of
Incorporation or the By-Laws, and who are to be elected in the manner
established therein, and all of whom may be replaced at any time by
resolution adopted by the majority of the members of the Board of
Directors at a meeting thereof, or in any other manner set forth in
the Articles of Incorporation or the By-Laws.
If so
provided by the Articles of Incorporation or the By-Laws, the same
person may hold two or more offices, although it is recommended that
the President and Secretary be two different persons. Furthermore, in
absence of a provision to the contrary in the Articles of
Incorporation or the By-Laws, it is not necessary that a person be a
member of the Board of Directors or Shareholder to be an officer of
the corporation. |
