Differences: Shareholders and Directors in Public Limited Companies in Panama 

When establishing a Public Limited Company (P.L.C.) in Panama, it is essential to understand the key differences between the main corporate roles and their respective responsibilities. Many clients often confuse the functions of shareholders and directors, but understanding these distinctions is crucial for making well-informed decisions when structuring a company.

At Panamá Legal Lab, we assist our clients in identifying how each role functions, how to maintain control, and how to protect confidentiality within their corporate structure.

Composition of a Public Limited Company

A Public Limited Company in Panama must have a minimum of three (3) directors, who may be of any nationality and must be of legal age. This requirement ensures that the company’s administration is diverse and formally established.

In contrast, there is no minimum number of shareholders required. A single individual or legal entity, of any nationality, may form the shareholders’ assembly, offering flexibility in the company’s organization.

Ownership and Management

It is vital to distinguish between those who own the company and those who manage it:

• Directors: They are not the owners but the administrators of the company, managing daily operations and ensuring compliance with corporate regulations. Unless otherwise stated in the Articles of Incorporation, directors do not have voting rights in the shareholders’ meetings.

• Shareholders: They are the actual owners of the company. As holders of common shares, they possess voting and decision-making power within shareholders’ assemblies, determining the strategic direction of the company.
  
  

Privacy and Public Disclosure

The level of privacy and public exposure varies significantly between the two roles:

• Directors: Their names and addresses are publicly disclosed in the Articles of Incorporation.

• Shareholders: Their identity remains fully confidential, as share certificates are not registered in any public institution. This provides a high level of privacy and asset protection.
  
  

Responsibilities and Control

Each role carries different levels of responsibility and control:

Shareholders:

• Are the legal owners of the company.

• Their liability is limited to the value of their shares.

• They are not personally liable for the company’s debts.
  
  

Directors:

• Oversee the company’s day-to-day management.

• Are not personally responsible for corporate debts.

• Execute decisions made by the shareholders.
  
  

Management and Control Options

For clients who value confidentiality or do not have trusted individuals to serve as directors, there is the option to appoint nominee directors.

Panamá Legal Lab can provide up to three (3) nominee directors, whose names will appear in the public deed but who will not participate in banking or management activities.
The actual shareholder or their designated representative must always remain the registered owner to maintain full control of the company.

Note: When clients appoint their own directors, these individuals must travel to Panama alongside the shareholder to open corporate bank accounts, providing all documents required by the bank.

Conclusion

Understanding the differences between shareholders and directors is key to structuring and managing a Public Limited Company effectively in Panama.
The privacy granted to shareholders and the public visibility of directors give investors flexibility in shaping corporate structures aligned with their strategic and confidentiality goals.

At Panamá Legal Lab, we empower our clients to make informed decisions that ensure control, privacy, and compliance, laying a strong foundation for long-term business success in Panama.