Directors and Officers of a Panama Corporation: Duties and Liability

Directors and Officers of a Panama Corporation: Duties and Liability

In collaboration with Legal Solutions Panama. Radar Panamá works with this company, and the analysis follows the same editorial standards. How we work

In short: Panama’s Law 32 of 1927 requires a Board of Directors of at least three adults and a president, a secretary and a treasurer elected by that board. Directors do not have to be shareholders, and the law sets no nationality or residence for them. One person can hold several officer posts if the articles of incorporation or bylaws allow it, but the three directors must be different people. Liability toward creditors appears in article 64 and is limited to specific cases.

Last verified: 19 October 2026. Every fact links to its official source.

Contents of this guide
  1. How many directors and officers the law requires
  2. What each post does and what is delegated
  3. Foreigners and one person in several posts
  4. Directors’ liability
  5. Nominees and the beneficial owner
  6. How they are changed
  7. Myths and facts
  8. Frequently asked questions
  9. Sources

How many directors and officers the law requires

Law 32 of February 26, 1927 (Gaceta Oficial 5067) governs Panamanian corporations. Article 2, item 9, requires the articles of incorporation to state the number of directors, no fewer than three, with names and addresses. Article 49 repeats that the Board of Directors has at least three adult members.

Article 65 adds that the corporation will have a president, a secretary and a treasurer, elected by the board, and any other officers, agents and representatives the board, the bylaws or the articles determine. The qualification manual of the Public Registry of Panama clarifies that the articles do not have to name officers, who can be appointed later. The company also needs an agent in the Republic (article 2, item 7), covered in the guide to the resident agent.

Key fact: Under Law 32 of 1927, a Panamanian corporation needs at least three adult directors and a president, a secretary and a treasurer elected by the Board of Directors.
Where to start: check that the draft articles name three directors with names and addresses, as the Legispan text requires. The guide on how to open a company places this step in the full process.

What each post does and what is delegated

The law does not describe each officer’s duties. What it says is spread across several articles.

PostWhat Law 32 providesArticle
DirectorsManage the corporation with full control and direction and exercise its powers, except those reserved to shareholders. They decide by majority of those present when there is a quorum.49 to 51, 53, 54
PresidentElected by the board. May call shareholder meetings and, with the treasurer, signs under oath the certificate for a capital reduction.65, 40, 14
SecretaryElected by the board. May call shareholder meetings and, with the president and treasurer, certifies the list of directors and officers when a dissolution is approved.65, 40, 81
TreasurerElected by the board. Takes part in the capital-reduction certificate and in the dissolution certification.65, 14, 81
Other officers and agentsMay exist (vice president, assistant secretary) if the board, the bylaws or the articles so determine.65, 19

For delegation, the board can appoint a committee of two or more of its members with all its powers, subject to the restrictions set (article 61). If the articles expressly authorize it, a director may be represented by a proxy (article 62). There is one limit: selling or disposing of all or part of the company’s assets also needs authorization from the shareholders entitled to vote (article 68), except placing assets in trust, pledge or mortgage to secure debts (article 70), if the articles say nothing else.

The law does not assign legal representation to a specific post. It is proven with the articles, the bylaws and the Public Registry certificate, as the guide to the online search explains.

Where to start: set in the bylaws who calls meetings, who signs and which acts need shareholders, and request a certificate from the Public Registry to confirm who is on record.

Foreigners and one person in several posts

Articles 49 to 55 and 65 to 67 do not require directors or officers to be Panamanian or to live in Panama. Directors only need to be adults, and article 1 lets subscribers of any nationality sign the articles even if not domiciled in the country. Under the text of the law, a foreigner can be a director. A practical case is on how a foreigner incorporates a company without traveling.

Being a shareholder is not required either: unless the articles say otherwise, directors need not hold shares (article 55), and an officer need not be a director unless the articles or bylaws demand it (article 67).

On one person in several posts, article 66 lets them hold two or more officer posts if the articles or bylaws provide for it. Directors, by contrast, must be at least three and different people, according to the Public Registry manual.

Where to start: review the articles and bylaws before naming one person to two posts. To choose a company type, see offshore company or operating company in Panama.

Directors’ liability

Article 64 regulates liability toward creditors: directors who consent to certain acts, knowing they affect the share capital or that a statement is false, are jointly and severally liable for the resulting damages. The acts are:

  • declaring or paying a dividend or distribution that leaves the company’s property below its liabilities, share capital included;
  • reducing the share capital;
  • making a false statement or report on a substantial point.

Shareholders, for their part, answer to creditors only up to what they owe on their shares (article 39), and that article does not mention directors. The cited articles do not show that directors answer for every debt or that they never do: they are liable in the article 64 cases, and other sources of liability outside Law 32 may exist and are reviewed case by case. Legal Solutions Panamá covers the topic in a blog post.

Where to start: before approving a dividend, a capital reduction or a report, compare assets and liabilities and record in the minutes how each director voted. The Judicial Branch text helps locate each article.

Nominees and the beneficial owner

A nominee director is registered without being the person who controls the company. Law 32 does not regulate that figure. What matters is Law 129 of 2020, whose article 2 defines the beneficial owner as the natural person who, directly or indirectly, owns, controls or exercises significant influence, including final effective control of a legal entity. The registered director does not replace that information. The resident agent must register the company and its beneficial owners (article 3 and the SSNF frequently asked questions), with name, ID or passport, birth date, nationality and address. The 2023 questions add that the agent must keep information on those who exercise final effective control. More in the guide to the beneficial owner.

Where to start: ask the resident agent what beneficial-owner data is on file and confirm it matches whoever controls the company.

How directors and officers are changed

Holders of a majority of the voting shares can remove directors at any time. Officers are replaced by resolution of a majority of the directors or as the articles and bylaws prescribe (article 63). Board vacancies are filled by a majority of its members, unless the articles say otherwise (article 59).

  1. Review the articles and bylaws to see how directors are elected (articles 57 and 58).
  2. Convene the competent body: shareholders remove directors and the board appoints officers. Notice follows articles 40 to 44.
  3. Record minutes. According to the Public Registry manual, they must show the type of meeting and who the new directors and officers are.
  4. Register the change. The second paragraph of article 63, in the Legispan text, requires registering first the authority of those who acted. For resignations, Executive Decree 809 of 2014, quoted in the manual, provides for notarizing them and filing them with the Registry.
  5. Tell the resident agent so the company’s data stays consistent.

The manual notes that almost all of these acts require the tasa única to be current, except resignations of directors and officers.

Where to start: read the “Cambio de Directores y Dignatarios” chapter of the Public Registry manual and confirm the exact document with the resident agent.

Myths and facts

  • Myth: one director is enough. Fact: the articles state no fewer than three and the board has at least three members (articles 2 and 49).
  • Myth: directors must be shareholders. Fact: unless the articles say otherwise, it is not mandatory (article 55).
  • Myth: president, secretary and treasurer must be three people. Fact: one person can hold several posts if the articles or bylaws allow it (article 66).
  • Myth: officers have to be directors. Fact: not unless the articles or bylaws require it (article 67).
  • Myth: a director must live in Panama. Fact: the articles on the board only require adulthood.
  • Myth: directors are never liable. Fact: article 64 provides joint and several liability in the cases described.
Where to start: check any doubt against the official text (in Spanish), because the article counts, not a third party’s summary.

To incorporate a corporation and define its board and officers, the company incorporation service of Legal Solutions Panamá, a law firm based in the country, is an option to consult.

See the company incorporation service

Frequently asked questions

How many directors and officers does a Panamanian S.A. need?

It needs at least three adult directors and a president, a secretary and a treasurer. Directors appear in the articles of incorporation (Law 32 of 1927, articles 2 and 49) and officers are elected by the Board (article 65).

Can they be the same person?

Officers can, if the articles or bylaws allow it (article 66). Directors cannot: there must be at least three and they must be different people, according to the Public Registry manual.

Can a foreigner be a director?

Yes under the Law 32 articles consulted, which require directors to be adults and set no nationality or residence. A company’s own articles or bylaws could add conditions.

Are directors liable for the company’s debts?

Not for its debts in general, but yes in the article 64 cases: dividends that leave assets below liabilities, capital reductions or false reports approved knowingly. In those cases they are jointly and severally liable to creditors.

How are directors changed?

Shareholders holding a majority of the voting shares can remove them at any time, and the board fills vacancies (articles 59 and 63). The change is documented and registered with the Public Registry, with the resident agent’s help. This guide is informational and does not replace advice from a qualified lawyer in Panama.

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Sources

All sources were checked on October 19, 2026. Official sources are in Spanish.

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By Daniela Bohórquez

Daniela Bohórquez is a writer at Radar Panamá. she writes about travel, tourism and business, with special attention to reviews of destinations, hotels and services. She lives between Panama, Italy and New York, which gives her a comparative view of how business is done in each market.