Corporation Law of Panama - Consolidation

Panama - Company Law

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CHAPTER VIII CONSOLIDATION

Article 71. Subject to the provisions of their articles of incorporation, any two or more corporations organised under this law may consolidate into a single new corporation. The Directors, or a majority of them of each of such corporations desiring to consolidate may enter into an agreement signed by them describing the terms and conditions of consolidation, the mode of carrying the same into effect and stating such other facts as are necessary to be stated in articles of incorporation or in accordance with this law, as well as the manner of converting the shares of each of the old corporations into shares of the new corporation with such other details and provisions as are deemed necessary or desirable.

Article 72. The agreement may provide for the distribution of cash, notes or bonds in whole or in part, in lieu of stock, provided, however, that upon such distribution the liabilities of the new corporation including those derived by it from the constituent corporations and including the amount of capital to be issued by the consolidated corporation pursuant to the terms of the consolidation shall not exceed the value of the assets of the consolidated corporation.

Article 73. The agreement of dissolution shall be submitted to the stockholders of each constituent corporation at a meeting thereof called specially for the purpose of considering the same, in the manner required by Articles 40 to 43 of this law and at said meeting said agreement shall be considered and a vote taken for the adoption or rejection of the same.

Article 74. Unless the articles of incorporation otherwise provide, if the votes of stockholders of each corporation representing a majority of the shares entitled to vote thereon shall be for the adoption of said agreement, then that fact shall be certified on said agreement by the Secretary or Assistant Secretary of each corporation; and the agreements so adopted and certified shall be signed by the President or a Vice-President and Secretary or Assistant Secretary of each of said corporations in the manner and in accordance with the requirements specified in Article 2 of this law with reference to the execution of articles of incorporation.

Article 75. The agreement of consolidation so executed shall be filed for registration in the Mercantile Registry as required in the case of articles of incorporation and when so filed shall be the agreement and act of consolidation of said corporation.

Article 76. When such agreement of consolidation is executed and filed as required by the two preceding articles, the separate existence of the constituent corporations shall cease and the consolidating corporations shall become a single corporation in accordance with said agreement possessing all the properties, rights, privileges, powers and franchises and subject to the restrictions, obligations and duties of each of the consolidated corporations; provided that all rights of creditors and all liens upon the property of either of the consolidating corporations shall be preserved unimpaired, but such liens shall be limited to the property affected thereby at the time of consolidation; and all debts, liabilities and duties of the consolidating corporations shall pertain to the consolidated corporation and may be enforced against it to the same extent as if they had been incurred by it.

Article 77. The articles of incorporation of any corporation may provide and determine the conditions, in addition to the requirements of this law upon which such corporation may consolidate with any other corporation. Article 78. In any judicial or administrative proceeding pending by or against the corporations that have ceased to exist, or any of them, the new corporation may be substituted in their place.

Article 79. The liability of corporations or the stockholders or officers thereof, or the rights or remedies of the creditors thereof or of persons doing or transacting business with each corporation shall not in any way be lessened or impaired by the consolidation of two or more corporations under the provisions hereof.

CHAPTER IX DISSOLUTION

Article 80. If the Board of Directors deem it advisable that any corporation organised under this law should be dissolved, the Board within ten days after the adoption of a resolution to that effect by a majority of the whole Board at any meeting called for that purpose, shall cause notice of the adoption of that resolution to be given in the manner provided in Articles 40 to 43 thereof, in a notice of a meeting of the stockholders having voting power to take action upon the resolution so adopted by the Board of Directors.

Article 81. If at any such meeting the holders of a majority of the shares entitled to vote shall by resolution consent that the dissolution shall take place, copy of such resolution together with a list of the names and residences of the Directors and Officers of the company, certified by the President or a Vice-President, and the Secretary or an Assistant Secretary, and the Treasurer or an Assistant Treasurer, shall be executed, protocolised and filed for record in the Mercantile Registry as required in Article 6.

Article 82. Upon such filing at the Registry Office a copy thereof shall be published in one issue of a newspaper published in the place where the office of the dissolved corporation was situated within the Republic, or if there be no such newspaper then in the Official Gazette of the Republic.

Article 83. Whenever all the stockholders having voting power shall consent in writing to a dissolution, no meeting of the Directors or Stockholders shall be necessary for that purpose.

Article 84. The document setting forth such consent should be protocolised, registered in the Mercantile Registry and published in the manner provided in Article 82 hereof. Once these formalities have been complied with, such corporation shall be deemed to be dissolved.

Article 85. All corporations whether they expire by their own limitation or are otherwise dissolved, shall nevertheless be continued for the term of three years from such expiration or dissolution for the purpose of prosecuting or defending suits by or against them or enabling them to settle their business and dispose of and convey their property and to divide their capital stock, but not for the purpose of continuing their business for which said corporation shall have been established.

Article 86. When any corporation shall expire by its own limitation or shall be otherwise dissolved, the Directors shall be trustees of such corporation with full power to settle the affairs, collect the outstanding debts, sell and convey the property of all kind, and divide the monies and property among the stockholders, after paying the debts of the corporation; and they shall have authority to sue for, in the name of the corporation, and recover debts and property and to represent it in proceedings that may be initiated against it.

Article 87. In the case of the foregoing article the Directors shall be jointly and severally responsible for the debts of the corporation, but only up to the amount of the monies and properties which shall come into their hands.

Article 88. The Directors shall have power to apply monies and property of the corporation to the payment of a reasonable compensation to themselves for their services, and to fill any vacancies in their number.

Article 89. The Directors when acting as trustees pursuant to Articles 86, 87 and 88, shall act by majority vote.

CHAPTER X FOREIGN CORPORATIONS

Article 90. A foreign corporation may maintain offices or agencies and carry on business in the Republic provided it files in the Mercantile Registry the following documents for registration:

1. Deed of protocolization of its Articles of Incorporation;

2. Copy of its last balance sheet accompanied by a declaration of the amount of its capital utilised or to be utilised in business in the Republic;

3. A certificate setting forth that it is incorporated and organised under the laws of the country of its domicile certified by a Consular representative of the Republic in said country, or if there be no such representative then by that of a friendly nation.

Article 91. A foreign corporation (maintaining an office or carrying on business in the Republic) which has not complied with the requirements of this law may not bring judicial or any other proceedings before any court or authority in the Republic, but may be sued in any action before judicial or administrative authorities, and shall furthermore be liable to a fine not exceeding five thousand balboas to be imposed by the Secretary of the Treasury.

Article 92. A foreign corporation carrying on business in this Republic and which has registered its articles of incorporation in the Mercantile Registry as aforesaid, shall be required to register in such Registry all amendments of such articles of incorporation and the instruments of consolidation or dissolution.

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