judicial

Limited liability law debated

Controversy erupted over a new law concerning limited liability companies following several 11th hour changes.

A recently approved bill concerning tougher regulations on limited liability companies continues to be a source of political controversy because of several last minute changes.

Though the law was approved in second reading on Wednesday, it was then modified significantly after many of the legislators had left the debate.

Opposition leader Mireya Lasso commented that that the secretary general’s failure to read the modifications reflected the rush to adopt them.

Jorge Hernán Rubio, a proponent of the bill, explained that the changes were needed to give greater flexibility to companies with limited liability, given that current policies that he felt condemned the sector to obscurity and disuse.

Rubio commented that the updated text does not set limitations on the contributions made by partners or to the shares or quotas of the contributions, leaving open the maximum number of members that can belong to the company and not merely the interest that partners can earn on those contributions.

Under its original draft, the bill had limited companies to 20 partners and capital that doesn’t exceed $500,000.

Another attraction of the new law is that it reduces the registration requirements charged by the Public Registry for services such as the changing staff or the opening or closing of branches.

Nevertheless, Partido Panameñista member Alcibiades Vásquez warned that the adoption of this law will invite conflicts to the cooperative sector, which already feels they were excluded from discussions during the bill’s drafting.

Rubio dismissed the notion that that the modifications will affect cooperatives.

The bill seeks to repeals in totality a 1996 law allowing the creation of limited liability companies with the idea of modernizing the business sector.