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Panama Company Incorporation. Panama Offshore Corporation Registration

Welcome to Coddan online Panamanian companies formation agent. The corporation law of the Republic of Panama provides that any two natural persons acting as the organizers and the subscribers may appear before a Notary Public to organize and constitute a corporation (In Panama Public Notaries govern most entities under the direction of a government institution). It is the usual practice for natural or juridical persons outside of Panama to accomplish the formation of a Panama corporation through a local Panamanian law office, a trust company, or a professional management services firm. We recommend reviewing this site in its entirety, so that you are knowledgeable of Panama jurisdiction and the powers granted to Panama corporations. We will guide you through the process of registering your Panamanian corporations and establishing your registered identity. Complete and submit application form. Adequate completion and submission of this form, along with the provision of payment, will enable Coddan to incorporate your proposed Panamanian corporation within three business days. We will express mail your corporate documents to the mailing address you specify in your incorporation order. If you want to become familiar with the description and the contents of Panamanian corporation incorporation packages, offered by Coddan and to find above, what kind of service is included in this or that Panama companies registration package, to get an idea about the price of annual renewal of the service, and about the general legal requirements to the corporation incorporation within Panama, please, select the package you need from the list, situated below the banner. The information in the banner will be renewed according to the package you've chosen.

With the exception of the "annual franchise tax", which is not an income tax, Panama corporations with no income arising from operations within the territory of the Republic of Panama are not subject to taxation in Panama. We recommend that the advice of a professional tax consultant be sought before the purchase of an offshore company. The term 'offshore' is not used in Panama legislation; since taxation is on a 'territorial' basis, i.e. only Panama-sourced income is taxed, an entity which has its activities or assets outside Panama will automatically escape taxation. There are more than 120,000 corporate entities in Panama, of which the majority are 'offshore'.

The structure that we generally recommend to our clients is a dual entity structure consisting of a Private Interest Foundation holding ownership of an International Business Corporation. We recommend the dual entity structure because it provides the utmost in asset protection, anonymity, privacy, and convenience. The corporation holds all major assets, such as commercial businesses, real estate, etc. and the foundation acts as a holding company to the corporation, receiving profits into the foundation’s corporate bank accounts and brokerage accounts. Part of my day-to-day practice involves the incorporation of Panamanian companies for clients. Clients use corporations for a number of purposes, for example:

  • Holding company for real estate in Panama or elsewhere;
  • Holding assets internationally on a favourable tax basis whereby assets can be transferred between persons in a private transaction through the delivery of shares rather than an exchange of the underlying assets themselves;
  • Business start-up in Panama, such as a consulting service internationally or a hotel in the tourism industry;
  • Conduct business in any jurisdiction in which a local or domestic corporation may conduct business;
  • Investment and banking; and
  • Borrow or lend money.

Please note

The prices payable for the items that you order are clearly set out in the web site. There will be no contract of any kind between you and us unless and until we receive payment from you. We act as your agent in the incorporation of offshore companies. We are not able to guarantee that any such filing will be acceptable to Companies Registrar , nor are there any contractual obligation upon us to do so. If Companies Registrar rejects incorporation or other filing, we will credit your account with a full refund and the contract between us will be made void. Companies Registrar does not offer a cancellation facility for the incorporation of companies or the filing of documents. We will be unable to cancel any such submission on your behalf and will not refund any payment you have made. All prices shown at Coddan Web Site are in Great British pounds. Credit cards are the preferred method of payment; we accept VISA, MasterCard and Delta. We can accept payment in UK Pounds Sterling, US Dollars, Euros, Australian Dollars and Canadian Dollars.

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Live Help is a real time "chat" feature which enables you to interact with a customer service representative without a phone call. Get answers to your questions while using our website. Clicking the "Live Help" button will start an on-line session with one of our representatives. Live Help is currently available during normal business hours. Outside of the above opening hours our business center will be closed. When you click on the button you will see an e-mail form that will allow you to send us a mail with your questions. Live Help is absolutely free! There are no hidden fees. We offer the service as a courtesy to our website visitors. Dear visitors, while having a chat session with a customer, we are frequently requested to give a piece of advice on tax planning or business structuring. We would like to inform you that it is against our principles to provide online advice pertaining to these issues. The points that may be covered during a session include service description, package or service price, navigation at our website, ways of making an order, methods of payment etc. Yet, if you wish us to provide you with advice on tax or business structuring, you should be aware that this service is chargeable. If you have any questions please E-Mail or call us: 033 0808-0089 or +44 (0) 207.935.5171, fax: +44 207.504.3531.

The Limited Liability Companies General Provisions

The limited liability companies must use a trade name, denominate itself by its purpose, or bear the name that the partners agree to denominate it, but in all cases the words "Sociedad de Responsabilidad Limitada", or initials S. de R.L." or the abbreviation "Sdad", "Ltda." must be added or placed before the name. (Initials "Ltd." are acceptable). The omission of such requirement in the company charter or any subsequent act of the company shall hold all its administrators and its partners personally and severally responsible, without any limitation whatsoever, over obligations contracted by the company. No trade name or denomination shall be the same as, or similar to that of another entity previously registered, whether or not of limited liability, that may be lend to cause confusion.

Any person that without being a partner, allows that his name appear within the trade name, shall respond solidarity for the amount of the social obligations up to the total amount of the contributions made or promised by the partners.

The limited liability companies shall always be considered as mercantile entities, therefore being ruled, whatever their purposes may be, by the laws and uses of commerce. They may carry on any kind of lawful operations, civil or commercial, which are not reserved by law to other kind of entities. In the limited liability companies, the minimum number of partners shall be two (2) and the maximum twenty (20). However, if two partners are to be spouses, the minimum number of founding partners shall be three (3), the company not being able to operate with less than such number while such circumstance subsist.

The paid-in capital shall be integrated by the contributions of the partners. It shall not be less than two thousand dollars ($2,000.00) nor more than five hundred thousand dollars ($500,000.00), and it shall be represented in social participation or non-negotiable quotas, accruable and divisible. The participation or quotas may be of different value but, in any case, they shall be of one hundred dollars ($100.00) or of a multiple of one hundred. Upon constitution of the limited liability company the capital must be fully subscribed, and paid, at least, 50% of the value of the contributions in money, that must be completed in the maximum term of five (5) years. The contributions in specie must be made in its totality and should the value of the contribution would not reach the quotas assigned, the difference shall be completed with money. The sums of the contributions made at the time of the constitution of the company cannot be less than two thousand dollars ($2,000.00).

Whenever, by any circumstance the limited liability company may deem convenient that the number of partners be more than twenty (20), or its paid-in capital be more than five hundred thousand dollars ($500,000.00), it must adopt the necessary resolutions to be transformed into a corporation. To carry out the mentioned change, the partners that do not wish to make use of the power granted to them, shall place on record their intent by way of a public deed, which shall contain the corresponding corporate charter and the express declaration that the corporation created shall assume all charges and obligations of the (Limited Liability) company that is being transformed.

Constitution Of The Company

The limited liability company shall be constituted by means of a public deed, that must be registered in the Public Registry and published. All its partners shall subscribe such deed personally or through special attorney-in-fact, and by the administrator, or the administrators designated in the same, should they not be partners.

The mentioned deed shall state: The names, surnames, nationalities, civil status, occupation (profession), identity card or of any other document of identification of each one of the executing partners. The denomination of the company, or the trade name. The domicile of the company, stating its complete address and the place or places where it is proposed to be established, or may already have established its main operations office, as well as its branches or agencies, should the latter has already been decided. The duration of the company, as well as the manner in which such term is computed, and how to extend it, should the partners deem it convenient. Explicit indication of the activity or activities that shall constitute the purpose of the company. It cannot, on a permanent basis, carry out operations that are not included in the objectives of the constitution charter, nor change to others without proceeding, in any case, to an amendment of the constitution charter. The amount of the capital stock expressed in balboas, the contributions or quotas in which it is divided, and the value of each one. The money, the assets or rights that each partner contributes, indicating in these latter cases, the concept in which it is made; the value attributed to the contributions which are not in cash, as well as the reasons to justify such estimation; the exact period and the manner in which the contributions in money not yet totally satisfied shall be completed, and the contributions or quotas assigned to them. Appointment of the person or persons that shall be in charge of the administration and representation of the company, which may be partners, or not, indicating if desired, the term for which they are appointed. Lacking such indication, it is understood that they have been appointed for an indefinite period. The manner in which the General Assembly of partners deliberates and adopt resolutions, as well as the manner of organizing it and the date, or dates in which it shall meet. Should the number of partners be five (5), or less, it will not be necessary to hold general assemblies; but in such case, it must be clearly stated in the constitution charter, the manner in which the partners shall be consulted and the manner in which they shall express their opinion, in writing, concerning the matters submitted to them. The other lawful agreements and the conditions that the partners may esteem convenient to establish, provided that they shall not be opposed to the dispositions of Corporation Law. It is prohibited to stipulate in the constitution charter additional benefit consisting of work or personal services of the partners. It may be specified in the constitution charter that the partners or some of them, shall have the right to receive an annual interest of 7% on contributions made, even if there are no earnings; but only for the period of time necessary for the execution of the works that, in accordance with the mentioned deed, must precede the outset of its operations, but in no case such period must exceed three (3) years. Such interest shall be charged to general expenses.

The deed of constitution of the company must be registered in the Public Registry within thirty (30) days following the date of execution. In a like term the transfer of real estates that the partners, or some of them, may have contributed to the company, must also be registered, evidencing the same by means of the corresponding marginal note on the previous registration. Within thirty (30) days following the date of the last above-mentioned registrations, an excerpt of the corporate charter must be published in three (3) consecutive issues of a newspaper of ample circulation. The administrators shall be personally and severally responsibly, without any limitation whatsoever, before the persons with whom they could have contracted with in the name of the limited liability company, prior to the registrations and publications aforementioned.

Whoever subscribed the deed of constitution of the company and whoever organized it, or formed part of it, shall respond in a personal and solidary manner, before third parties for that part of the capital that has not been fully paid with money, and for the value attributed to the contributions made in specie. The limited liability company may vary the content of the constitution charter, abiding by the same rules that have been indicated for its constitution. Unless the constitution charter provides otherwise. The amendment to the same shall require the consent of two third of the partners that may represent, at least, two third of the paid-in capital. However, the unanimous consent of the partners will be necessary for any amendment to the constitution charter that may imply for them compulsory additional contributions, or any form of extension of their responsibility.

The paid-in capital of the limited liability company may be increased or reduced by means of an amendment to the constitution charter. Nevertheless, the reduction of the paid-in capital cannot be carried out in the following cases: should there be well-founded opposition of any creditor or any interested person, which shall be legalized before the respective Circuit Judge within the term of thirty (30) days from the date of the last publication. Such opposition shall stop all effects of the projected reduction until it is withdrawn, or resolved by the Court. If on account of the reduction, the assets of the company would be less than twice the liabilities, not including the paid-in capital. If after the reduction the paid-in capital would be less than two thousand dollars ($2,000.00). The following must be registered at the Public Registry in a term of thirty (30) days: All transfers of capital contributions that may imply variation in the persons (holding) of the partners. The changes that the company may agree in respect to its administrators, special attorneys-in-fact, representatives and liquidators. The establishment or closure of branches and agencies. The change of address of the company, even if it is within the same town (location). The other agreements adopted by the partners in general assemblies or in writing.

Rights And Duties Of The Partners

Unless the constitution charter provides otherwise, in case of an increase in the paid-in capital each partner shall have the right to subscribe a proportional share as to the quotas held. Each partner shall have the right to receive from the company, a certificate signed by the administrator, or any of the administrators, which shall certify: The name of the company. The paid-in capital. Precise indication of the registration (data) of the constitution charter in the Public Registry. Name of the partner. Value of the partner's participation, expressed in balboas, with indication, if such is the case, of the sums paid and the date in which the (balance of the) contribution must be completed. Date and place in which the certificate is issued.

Each partner shall have at least the right to one vote in the deliberations of the company, provided not being in default in the total payment of its contribution. Should the partnerґs quota be for a multiple of one hundred dollars ($100.00), it shall have the right to one vote for each one hundred dollars ($100.00), unless the constitution charter may have provisions restricting in any manner the number of votes. The right to vote, however, will not be exercised by the partner in the cases in which the partner has an interest opposed to that of the company. Neither are able to vote the administrators that are partners, whenever it is tried to reach agreements that may be related with his administration, or otherwise may affect them.

Unless otherwise provided in the constitution charter in the cases where the assembly must meet, any partner may be represented by and attorney-in-fact freely designated through a public or private document, with or without a clause of substitution. The partners shall have the right to participate in the earnings that the company agree to distribute and in the part corresponding to the liquidation when the company is dissolved, in the proportion that may have been established in the constitution charter, or otherwise, in proportion to the contributions made, bearing in mind the provisions of Articles 266 and 267 of the Commercial Code. Whenever a capital participation which cannot be divided may be owned by various persons, these shall designate, through communication in writing, addressed to the company, who shall exercise the rights inherent to such participation, without prejudice that all participants in solidum will meet the obligations of the partner towards the company.

In case of usufruct of capital contributions, the category of partner corresponds to the owner (partner) subject to usufruct. The usufructuary shall have the right to participate in the net earnings obtained by the company during the period of the usufruct and to sue before the Judge the nullity of all agreements adopted that may damage its interest. The exercise of the other rights correspond to the owner (partner) subject to usufruct, unless otherwise provided in the constitution charter or agreed upon between the interested parties. Any agreement between the owner (partner) subject to usufruct and the usufructuary that may confer to the latter more rights than those that are herein recognized, must be communicated to the company in writing so that the corresponding annotation be made in its register of partners.

In case of pledge of capital contributions, it shall correspond the owner of same to exercise the owner's rights, unless otherwise provided in the constitution charter or by agreement between the parties. The constitution of pledge on capital contribution must be evidenced through a public deed that must be registered in the Public Registry. The content of the aforementioned public deed and any agreement between the parties that may confer special rights to the holder of the pledge must also be communicated to the company. Should the company agree to extend its duration beyond the limit determined in the constitution charter, or in a subsequent agreement; to vary its social purposes; to increase or reduce its paid-in capital; to change into a different company, or to merge with another company or companies, any partner that did not contribute with its vote to the aforementioned agreement, shall have the right to withdraw from the company demanding the corresponding payment due on the net worth of the company. Likewise, any partner not performing the office of administrator of the company may use this right, if during three (3) consecutive years the earnings distributed by the company would not reach to represent 4% of the real value of its quotas.

The exercise of the rights mentioned in the previous article must be attempted (made) by the partners dissenting on the amendments indicated within thirty (30) days following the date on which the corresponding agreement had been registered at the Public Registry, or within sixty (60) days following the date in which the last balance sheet had been presented, communicating in writing, their determination to the company. The company will have, in both cases, a term of six (6) months from the date on which notification is received from the partner, or partners, to satisfy their petition. Should this not be done within the term indicated or, in another instance, within the term agreed by the company with the claimant partner or partners, the Judge, at their request, must decree the dissolution of the company and appoint a liquidator. The quotas reimbursed to the partners that made use of the rights that are recognized to them in the two previous articles, shall be offered to the other partners at the price settled (paid) by the company. The partners, whose contribution does not consist of money, are obliged to the eviction and disencumbrance of those things object of the contribution, in accordance with provisions in the Civil Code, in respect to the seller. Should the contributions consist of credits, the contributor shall respond, in any case, to the legality of same and of the solvency of the debtor.

No partner may carry out, on his own, or for others, similar businesses to that of the company or any that, in any manner, may hinder the development of its operations, nor be a part of other companies that are in the same business. The partners that infringe this provision, those that do not make timely payments on the balance due of their contributions and those that, in any form paralyze or try to hinder the development of the business operations, may be excluded from the company, withholding the latter all portions that may correspond to them in the net worth of the company, without prejudice to initiate against the same the necessary actions to obtain the proper indemnization of the case.

In the suppositions that are mentioned in the previous article, the exclusion of partners may be agreed upon by decision of a general assembly especially convened to consider the case. But if the company is made of (2) partners, the Judge, at the admissible petition of the other must decide the on exclusion of any of them. The same rule shall be followed when the partners (subject) of the intended exclusions have an aggregated economical participation, higher than that of the soliciting partners. The partners excluded by the company, that may consider such decision unjust, may appeal to the Judge within a term of thirty (30) days from the date the agreement was communicated to them, filing the claims deemed in order.

Incorporation

Two or more persons of lawful age, of any nationality even though not domiciled in the Republic of Panama, may, in accordance with the formalities hereinafter provided, form a corporation for any lawful purpose or purposes. Such persons desiring to form such a corporation shall sign articles of incorporation which shall set forth: the names and domiciles of each of the subscribers of the articles; the name of the proposed corporation which shall not be the same as, nor so similar as to cause confusion with, the name of any other existing corporation. The name shall include a word, phrase or abbreviation, which indicates that it is a corporation to distinguish it from a natural person or company of any other nature. The name of the corporation may be expressed in any language. The general purpose or purposes of the corporation. The amount of the capital stock and the number and par value of the shares of which it is to consist; and if the corporation is to issue shares without par value. The capital stock and par value of shares of any corporation may be expressed in terms of the legal currency of the Republic or of gold units of the legal currency of any other country, or of both. If the shares are to be classified, the number of shares to be included in each class and the designations, preferences, privileges and voting powers or restrictions or qualifications of the shares of each class; or that such designations, preferences, privileges and voting powers or restrictions or qualifications shall be determined by resolution of the majority in interest of the Stockholders or of the majority of the Directors. The number of shares of stock which each subscriber of the articles of incorporation agrees to take. The domicile of the corporation and the name and domicile of its resident agent in the Republic, who may be a juridical person. Its duration. The number, names and addresses of its Directors, not less than three. Any other lawful provisions which the subscribers of the articles of incorporation may desire to include.

The articles of incorporation may be executed in any place, within or outside the Republic, and in any language. The articles of incorporation shall be in the form of a public deed, or in any other form, provided that said articles be acknowledged before a Notary Public or before any other officer authorised to take acknowledgements at the place of the execution thereof. If the articles of incorporation are not in the form of a public deed, they must be protocolized in a Notary Office of the Republic. If the said document has been executed outside of the Republic, it must, before it is protocolized, be authenticated by a Panamanian Consul, or, if there should be no such Consul, by the Consul of a country friendly to Panama; and if it should be in a foreign language it must be protocolized together with an authenticated translation subscribed by an official or public interpreter of the Republic.

The public deed or the protocolized document containing the articles of incorporation must be presented for registration in the Mercantile Registry. The incorporation of a corporation shall have no effect with respect to third parties until the articles of incorporation have been recorded. Any corporation formed under General Corporation Law may from time to time amend its articles of incorporation in any respect; provided such articles of incorporation, when so amended, shall conform to the provisions of General Corporation Law. Therefore, the corporation may by such amendment change the number of its shares or of any class of its outstanding shares at the time of such amendment, change the par value of the outstanding shares of any class, change the outstanding shares of any class having par value into the same or different number of shares of the same or a different class without par value, or the outstanding shares of a class without par value into the same or different number of shares of the same or different class having par value, or increase the amount or the number of shares of its authorised capital stock or divide its authorised capital stock into classes or increase the number of classes of its authorised capital stock, or change their designations, rights, privileges, preferences, voting powers, restrictions or qualifications. But the capital stock of a corporation shall not be reduced.

The amendments shall be made by the persons hereinafter mentioned and in the manner provided in General Corporation Law with respect to the execution of the articles of incorporation. In case no share has been issued, the articles of amendment shall be signed by every subscriber of the articles of incorporation and by every subscriber to the stock of the corporation. In case share has been issued, such articles of amendment shall be signed: in person or by proxy by the holders of all the outstanding shares of the corporation entitled to vote thereon and shall be accompanied by a certificate of the Secretary or an Assistant Secretary of the corporation that the persons who have executed the articles of amendment, in person or by proxy, constitute the holders of all the outstanding shares of the corporation entitled to vote thereon; or by the President or a Vice-President and the Secretary or Assistant Secretary of the corporation, who shall sign and annex thereto a certificate stating that they have been authorised to execute such articles of amendment by the votes, cast in person or by proxy, of the holders of a majority of such shares and that such votes were cast at a stockholders meeting held on the date specified in the notice or waiver of notice.

In case that the articles of amendment alter the preferences of outstanding shares of any class or authorise the issuance of shares having preferences which are in any respect superior to those of the outstanding shares of any class, the certificate shall state that the officers signing the same have been authorised to execute such articles of amendment by the vote cast in person or by proxy of the holders of a majority of the outstanding shares of each class entitled to vote thereon, cast at a stockholders' meeting held on a date specified upon notice or waiver of notice. If the articles of incorporation provide that the votes of the holders of more than a majority of the outstanding shares of any class or classes shall be required in order to effect any amendment of any provision of the articles of incorporation, the certificate shall state that such amendment has been authorised in that manner.

Unless the articles of incorporation or any amendment thereof otherwise provide, in the event of an increase of stock, each stockholder shall be entitled to a preferential right to subscribe for shares of stock, issued pursuant to such increase, in proportion to the number of shares then held by him. Any corporation may reduce its authorised capital stock by an amendment of its articles of incorporation; but no distribution of assets may be made pursuant to any such reduction, which will reduce the actual value of its remaining assets to an amount less than the total amount of its debts and liabilities plus the amount as reduced of its issued capital stock. There shall be annexed to the articles of amendment a certificate issued under oath by the President or a Vice-President and of the Treasurer or an Assistant Treasurer stating that no distribution of assets made or to be made pursuant thereto will violate the provision contained in this article. The judgement of the Directors as to the value of the assets and their determination of debts and liabilities shall be conclusive, except in the case of fraud.

Any corporation, unless its articles of incorporation otherwise provide, may acquire shares of its own stock. If such acquisition is made out of funds or properties other than surplus or net profits, the shares of stock so acquired shall be cancelled by the reduction of the amount of issued stock: but such shares may be reissued if the authorised capital stock shall not have been reduced by such cancellation. Shares of its own stock acquired by a corporation with funds taken from surplus of its assets over its liabilities or from net earnings, may be held by such corporation or sold by it from time to time for its corporate purposes and may be cancelled or reissued from time to time by the Board of Directors. The shares of stock in the corporation held by the corporation shall not be voted upon, directly or indirectly, at any meeting of stockholders. No corporation shall purchase or otherwise acquire its own stock out of funds or property other than its surplus or net profits, if such purchase or acquisition will reduce the actual value of its assets to an amount less than the total amount of its debts and liabilities plus the amount as reduced of its issued capital stock. The judgement of the Directors as to the value of the assets, and their determination of the debts and liabilities shall be conclusive, except in the case of fraud.

Faculties Of The Corporation

Every corporation organised under General Corporation Law shall have the following powers, in addition to other powers specified in General Corporation Law: To sue and be sued in any court; To adopt and use a corporate seal and alter the same at convenience; To acquire, purchase, hold, use and convey real and personal property of all kinds and make and accept pledges, leases, mortgages, liens, and encumbrances of all kinds; To appoint officers and agents; To make contracts of all kinds; To make by-laws not inconsistent with any existing laws of the Republic or its articles of incorporation, for the management, regulation and government of its affairs and property, the transfer of its stock and the calling and holding of meetings of its stockholders and directors, and for all other lawful matters; To carry on business and to exercise its powers in the Republic and in foreign countries; To dissolve itself or to be dissolved in accordance with law, voluntarily or for other cause. To borrow money and contract debts in connection with its business or for any lawful purpose; to issue bonds, notes, bills or exchange, debentures and other obligations and evidences of indebtedness (which may or may not be convertible into stock of the corporation) payable at a specified time or times payable upon the happening of a specified event or events whether secured by mortgage, pledge or otherwise, or unsecured, for money borrowed or in payment for property purchased or acquired or for any other lawful objects. To guarantee, acquire, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of or deal in shares of the capital stock of, or bonds, securities or other evidences of indebtedness created by other corporations, or of any municipality, province, state or government. To do all things necessary for the accomplishment of the objects enumerated in its articles of incorporation or any amendment thereof or necessary or incidental to the protection and benefit of the corporation, and in general to carry on any lawful business whether or not such business is similar in nature to the objects set forth in its articles of incorporation or any amendment thereof.

Stock

Every corporation shall have power to create and issue one or more classes of shares of stock with such designations, preferences, privileges, voting powers or restrictions or qualifications thereof and other rights as its articles of incorporation provide and subject to such rights of redemption as shall have been reserved to the corporation in such articles of incorporation. The articles of incorporation may provide that shares of stock of any class shall be convertible into shares of one or more other classes.

Shares of stock may have a nominal or par value. Such shares may be issued as fully paid and non-assessable or as partly paid or without any payment having been made thereon. Unless the articles of incorporation otherwise provide, full paid and non-assessable shares having a par value, or securities or shares convertible into such shares, shall not be issued for a consideration which, in the judgment of the Board of Directors, is less in value than the par value of such shares or of the shares into which such securities or shares are convertible, nor shall certificates for partly paid shares state that there has been paid thereon an amount greater than the value, in the judgement of the Board of Directors, of the consideration actually paid thereon. Such consideration may be money, labour, services or property of any kind. The judgement of the Board of Directors as to the value of any such consideration shall be conclusive, except in case of fraud.

Shares of stock may be created and issued without par value provided there be included in the articles of incorporation the following statements: The total number of shares that may be issued by the corporation. The number of shares, if any, which are to have a par value and the par value of each. The number of shares which are to be without par value. Either one of the following statements: the stated capital of the corporation shall be at least equal to the sum of the aggregate par value of all issued shares having par value plus a certain amount in respect to every issued share without par value plus such amounts as from time to time by resolution of the Board of Directors may be transferred thereto; or the stated capital of the corporation shall be at least equal to the whole of the aggregate par value of all issued shares having par value plus the aggregate amount of consideration received by the corporation for the issuance of shares without par value, plus such amounts as from time to time by resolution or resolutions of the Board of Directors may be transferred thereto. There may also be included in such articles of incorporation an additional statement that the stated capital shall not be less than the amount therein specified.

Subject to the designations, preferences, privileges and voting powers or restrictions or qualifications granted or imposed in respect to any class of shares, each share with or without par value shall be equal to every other share of the same class. Any corporation may issue and may sell its authorised shares without par value for such consideration as may be prescribed in its articles of incorporation; or for such consideration which, in the judgment of the Board of Directors, shall be the fair value of such shares; or for such consideration as from time to time may be fixed by the Board of Directors pursuant to authority conferred in such articles of incorporation; or for such consideration as shall be determined by the holders of a majority of the shares entitled to vote.

Any and all shares issued shall be deemed fully paid and non-assessable. The holders of such shares shall not be liable to the corporation or to its creditors in respect thereto.

The shares of a corporation shall be paid at such times and in such a manner as the Board of Directors may determine. If default shall be made in the payment, the Board of Directors may either proceed against the debtor to enforce payment of the amounts due and unpaid and to collect such damages as the corporation may have suffered, or rescind the contract in respect to the shareholder in default, having the right in this last instance to retain for the corporation such amounts as the defaulting shareholder may be entitled to receive from the funds of the corporation. In the event that the corporation should proceed to rescind the contract in respect to the stockholder in default and to retain the amounts to which he may be entitled, the Board of Directors shall give at least six days advance notice to such shareholder. Shares acquired by the corporation by virtue of the provisions of this article may be reissued or re-offered for subscription.

Every share certificate shall contain the following statements: The reference to the inscription of the corporation in the Mercantile Registry. The amount of its capital stock. The number of shares owned by the holder thereof. The class of share, if there be more than one class, as well as the special conditions, designations, preferences, privileges, premiums, advantages and restrictions or qualifications which some classes of shares may have over the others. If the shares which it represents are fully paid and non-assessable, the share certificate shall so state; and if such shares are not fully paid and are assessable the certificate shall state the amount or amounts which have been paid thereon. If the shares are represented by a certificate issued in the name of the owner, it should contain the name of said owner.

Shares may be issued to bearer only if fully paid and non-assessable. Shares represented by a certificate issued in the name of the owner shall be transferable on the books of the corporation in such manner and under such regulations as may be provided in the articles of incorporation or in the by-laws. But in no case shall the transfer of stock be binding on the corporation unless it shall have been registered upon the corporation books. If the stockholder shall be indebted to the corporation it may refuse to permit the transfer of his stock until such indebtedness is paid. But in all cases the transferor and the transferee shall be jointly liable for the payment of the amounts owed to the corporation by virtue of the shares so transferred.

The transfer of shares issued to bearer requires only delivery of the certificate. If so provided in the articles of incorporation, any holder of a certificate of shares issued to bearer may exchange such certificate for a certificate for a like number of shares issued in his name; and the holder of a certificate of shares issued in the name of the owner may exchange it for a certificate for a like number of shares issued to bearer.

The articles of incorporation may provide that in case a stockholder desires to dispose of his shares of stock, the corporation or any other stockholder thereof shall have a preferential right to purchase such shares. It may also impose other restrictions upon the transfer of the shares; but no restriction which shall absolutely prevent a stockholder from disposing of his shares of stock shall be valid.

Every corporation may issue a new share certificate in the place of any certificate theretofore issued by it alleged to have been destroyed, lost or stolen. The Directors authorising such issue of a new certificate may require the owner of the destroyed lost or stolen certificate to give the corporation such security or indemnity as they may direct against any claim that may be made against the corporation.

The articles of incorporation may provide that the holders of any designated class or classes of shares shall not be entitled to vote, or may otherwise limit or define the respective voting powers of the several classes of shares. The provisions of this article shall prevail in accordance with their terms in all elections and in all proceedings in which the law requires the vote or the written consent of the holders of all of the shares or of a specified proportion of the shares of the corporation. The articles of incorporation may also provide that for specified purposes the vote of more than a majority of the holders of any class of shares shall be required.

One or more stockholders by agreement in writing may transfer their shares to a voting trustee or trustees for the purpose of conferring upon it or them the right to vote thereon for the period and upon the terms and conditions therein stated. Every other stockholder may transfer his shares to the same trustee or trustees and thereupon shall be a party to such agreement. The certificates of shares so transferred shall be surrendered and cancelled and new certificates therefore issued to such trustee or trustees, in which it shall appear that they are issued pursuant to such agreement, and in the stock register of the corporation that fact shall also be noted. In order that the provision contained in this article be carried into effect it will be necessary that a certified copy of such agreement be filed with the corporation.

Every corporation organised under General Corporation Law shall keep at its office in the Republic, or at such other place or places as the articles of incorporation or the by-laws provide, a book to be known as the stock register, containing (except in the case of shares issued to bearer) the names alphabetically arranged of all persons who are stockholders of the corporation, showing their places of residence, the number of shares held by them respectively, the time when they respectively became the owners thereof and the amount paid thereon or that they are fully paid and non-assessable. In the case of shares issued to bearer such stock register shall state the number of shares so issued, and the date of issue and that such shares are fully paid and non-assessable.

Dividends may be paid to the stockholders from the net earnings or profits of a corporation or from the surplus of its assets over its liabilities, but not otherwise. The corporation may declare and may pay dividends upon the basis of the amount actually paid upon partly paid shares of stock.

When the directors shall so determine, dividends may be paid in shares of the corporation; provided that the shares issued for such purpose shall be authorised and provided, if such shares have not heretobefore been issued, there shall be transferred from surplus to the capital of the corporation an amount at least equal to that for which such shares could be lawfully issued.

Every stockholder shall be personally liable to the creditors of the corporation only to an amount equal to the amount unpaid on his shares; but no action shall be brought against a stockholder for any debt of the corporation until judgment therefore has been recovered against the corporation and an execution against the assets thereon has been returned unsatisfied in whole or in part.

Stockholders' Meetings

Whenever under the provisions of General Corporation Law the approval or authorisation of the stockholders is required, the notice of the meeting shall be in writing and in the name of the President or a Vice-President or the Secretary or an Assistant-Secretary or of such other person or persons as the by-laws or articles of incorporation may prescribe or permit. Such notice shall state the purpose or purposes for which the meeting is called and the time and place at which it is to be held.

All meetings of stockholders shall be held within the Republic, unless otherwise provided in the articles of incorporation or by-laws.

Such notice shall be given at such time prior to any such meeting and in such manner as the articles of incorporation or by-laws of the corporation provide; but unless they otherwise provide, such notice shall be given personally or by mail upon each stockholder of record entitled to vote at such meeting not less than ten or more than sixty days before such meeting. If the corporation has issued shares to bearer, notice of stockholders' meetings shall be published in such manner, as the articles of incorporation or by-laws provide.

Any stockholder may waive notice of any meeting in writing signed by him or his representative either before or after the meeting. The resolutions taken in any meeting at which all stockholders are present in person or by proxy shall be valid for all purposes and the resolutions taken in any meeting at which a quorum is so present and notice of which shall have been so waived by all absent stockholders, shall be valid for all purposes stated in each waiver, notwithstanding that in either case the notice required by General Corporation Law or by the articles of incorporation or the by-laws shall not have been given.

Unless otherwise provided in the articles of incorporation, every stockholder of a corporation shall be entitled at each meeting of stockholders thereof to one vote for each share of stock of any class and whether with or without par value standing in his name on the books of the corporation. It is hereby understood, however, that unless contrary provision should be made in the articles of incorporation, the directors may prescribe a period not exceeding forty days prior to any meeting of the stockholders during which no transfer of stock on the books of the corporation may be made, or may fix a day not more than forty days prior to the holding of any such meeting as the day as of which stockholders (other than the holders of shares issued to bearer) entitled to notice of and to vote at such meeting shall be determined, in which event, only stockholders of record on such day shall be entitled to notice or to vote at such meeting.

In the case of shares issued to bearer, the bearer shall be entitled to one vote at any meeting of the stockholders for each share of stock entitled to vote, upon presentation at such meeting of such certificate or certificates, or upon presentation of such other evidence of ownership as may be prescribed by the articles of incorporation or by-laws.

At any meeting of the stockholders of any corporation any stockholder may be represented and vote by proxy or proxies (who need not be stockholders) appointed by an instrument in writing public or private, with or without power of substitution.

The articles of incorporation of any corporation may provide that at all elections of directors of such corporation each holder of stock possessing the right to vote for directors shall be entitled to as many votes as shall equal the number of his shares of stock multiplied by the number of directors to be elected, and that he may cast all of such votes for a single director or may distribute them among the number to be voted for or any two or more of them as he may see fit.

Directors

The business of every corporation shall be managed by a board of not less than three directors, all of whom shall be male or female persons of full age.

Subject to the provisions of General Corporation Law and of the articles of incorporation, the board of directors of every corporation shall have full control over the affairs of the corporation. The Board of Directors may exercise all of the powers of the corporation except those that the law or the articles of incorporation or the by-laws confer upon or reserve to the stockholders. Subject to the provisions of General Corporation Law and of its articles of incorporation, the number of directors shall be fixed by the by-laws of the corporation.

A majority of the board of directors of a corporation at a meeting duly assembled shall be necessary to constitute a quorum for the transaction of business provided, however, that the articles or incorporation may provide that a certain number of the directors, whether more or less, than a majority, shall be necessary to constitute a quorum. The act of a majority of the directors present at a meeting at which a quorum is present shall be the act of the board of directors. Unless otherwise provided in the articles of incorporation no director need be a stockholder.

The directors may make, alter, amend and repeal the by-laws of the corporation, unless otherwise provided by the articles of incorporation, or in the by-laws adopted by the stockholders. The directors of every corporation shall be chosen at the time and place and in the manner provided for by the articles of incorporation or by-laws. Vacancies in the board of directors shall be filled in the manner prescribed by the articles of incorporation or by-laws.

Subject to the provisions contained in the two foregoing articles, vacancies, whether resulting from an increase in the authorised number of directors or otherwise, may be filled by the vote of a majority of the directors then in office. If the directors shall not be elected on the day designated for the purpose, the directors then in office shall continue to hold their offices and discharge their duties until their respective successors shall have been elected.

Unless otherwise provided in the articles of incorporation or in the by-laws, the board of directors may appoint two or more of their members to constitute a committee or committees, who shall have and exercise the powers of the board of directors in the management of the business and affairs of the corporation to the extent and subject to the restrictions expressed in the articles of incorporation, the by-laws, or the resolutions appointing such committee or committees.

If the articles of incorporation so provide, at any meeting of the directors, any director may be represented and vote by proxy or proxies (who need not be directors), appointed by an instrument in writing, public or private, with or without power of substitution.

Directors may be removed at any time by the vote of the holders of a majority of the outstanding shares entitled to vote for directors. Officers, agents and employees may be removed at any time by the vote of a majority of the directors, or in such other manner as the articles of incorporation or the by-laws.

If any dividend or distribution of assets be declared or paid which shall reduce the value of the assets of the corporation to less than the aggregate amount of its debts and liabilities, including capital stock, or if a reduction of capital stock be made, or if any report or statement be made which shall be false in any material representation, the directors of the corporation who assent thereto with knowledge of the impairment of the capital stock, or falsity as the case may be, shall be jointly and severally liable to the creditors of the corporation for any loss or damage arising therefrom.

Officers

Every corporation shall have a President, a Secretary and a Treasurer, who shall be chosen by the Board of Directors, and may also have such other officers, agents and representatives as the Board of Directors or the by-laws or the articles of incorporation may determine and who shall be chosen in the manner provided thereby. Any person may hold two or more offices, if so provided by the articles of incorporation or the by-laws. No officer need be a director of the corporation unless the articles of incorporation or by-laws so provide.

Sale Of Assets And Franchises

Every corporation may, by action taken at any meeting of its Board of Directors, sell, lease, exchange or otherwise dispose of all or part of its assets, including its goodwill and its corporate franchise, upon such terms and conditions as its Board of Directors deem expedient, if authorised by the affirmative vote of stockholders holding a majority of the shares entitled to voting power and given at a stockholders' meeting called for that purpose in the manner provided in Articles 40 and 44 of General Corporation Law or if authorised by the written consent of such stockholders. Notwithstanding the provisions contained in the preceding article, the articles of incorporation may require the consent of some particular class of stockholders in order to grant the authority referred to in said article. Unless the articles of incorporation provide otherwise no vote or consent of stockholders shall be necessary for a transfer of assets in trust, or a pledge or mortgage thereof to secure indebtedness of the corporation.