Shareholders’ agreements in Panama: conversations before signing
Before signing a shareholders’ agreement in Panama, clarify who decides, who has speaking and voting rights, what restrictions apply and how profits will be distributed. Also discuss management, appointments and situations that could affect business continuity.
At Carolina Solís Law, I believe these conversations should take place from the start. Trust between partners is valuable; supporting it with understandable rules helps everyone know their powers, responsibilities and the terms of their participation.
Who decides, and under what conditions
Saying “the partners will decide” is not enough. Distinguish the company’s governing bodies, each role’s powers and the rights attached to the shares. Ask who can participate, who votes, which majorities are required and which matters have restrictions or need special approval.
For example, discuss borrowing, sales of significant assets, new investments or commitments that change the business’s direction. Proposed rules must be coordinated with the articles of incorporation, bylaws and applicable law. Law 32 of 1927 is a reference for Panama’s corporate framework; it does not by itself determine the effectiveness of each clause.
Dividends, management and appointments
Profit distribution. Clarify expectations about dividends, reinvestment and liquidity needs. Decisions must reflect the financial position and legal requirements. A partner expecting regular income and another wanting to reinvest everything need to talk before that difference becomes a conflict.
Delegated management. If a shareholder will manage the business, define powers, limits, remuneration where applicable and reporting responsibilities. Being a shareholder and working in the company are distinct roles.
Senior management and sensitive positions. Agree how responsible individuals are proposed, appointed, evaluated and replaced, respecting the powers of the relevant governing bodies. Finance, bank signing authority and access controls deserve clear criteria, particularly when family members will participate.
Four additional conversations worth having
- Decision deadlocks. What happens when the necessary majority cannot be reached? Define a route for addressing disagreement and how operations will continue in the meantime. The specific mechanism needs legal review.
- Partners joining or leaving. What conditions should apply to share transfers, admitting another person or valuing a stake? Review restrictions and procedures that can validly be established.
- Conflicts of interest. How will a transaction with a shareholder, relative or related company be disclosed and handled? Agree who reviews it, how it is decided and what information is recorded.
- Incapacity or death. Who can continue managing, and what happens to the shareholding? Coordinate business continuity with estate planning; inheriting shares does not automatically mean taking over management.
Check which document should record each decision
The shareholders’ agreement must be reviewed alongside the other instruments. Some decisions may require resolutions, powers of attorney, amendments to corporate documents or additional contracts. Ask for an explanation of what the agreement governs, whom it binds and what needs to be formalized separately.
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Your next step
At Carolina Solís Law, we can begin by identifying outstanding decisions and the support you need. Explore governance, risk and compliance advice or book an initial conversation. Document review, drafting or negotiation is confirmed in the proposal and should not be assumed to be included automatically in a diagnostic assessment.