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Insolvent exit: concurso liquidation under Ley 12 de 2016

Last verified: 2026-10-29 · Status: Stable

A company that cannot pay may ask a circuit insolvency court to declare its liquidation, filing a shareholder resolution, asset and debt lists, a payroll list and audited and interim financial statements; the court rules within five days. The order removes management from the assets, suspends individual enforcement and is communicated to the Registro Público, MICI, CSS, DGI and the municipality; a court appointed liquidator realizes and distributes the estate. Acts in the prior year that harmed creditors can be voided, directors' assets can be attached where negligence or fraud is likely, and the process ends with approval of the liquidator's final report.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates freely as legal tender; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Deposit for a creditor's liquidation petition	1000 PABLey 12 de 2016 art. 84, as of 2026-10-29 · in force
Cap on provisional liquidator fees	3000 PAB per monthLey 12 de 2016 art. 158, as of 2026-10-29 · in force
Look back for voidable acts	1 yearsLey 12 de 2016 art. 118, as of 2026-10-29 · in force
Days for the court to declare a voluntary liquidation	5 daysLey 12 de 2016 art. 83, as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos), as of 2026-10-29 · in force

The rule

1. Concurso liquidation applies when the debtor stops paying an obligation in an executive title arising from commercial acts, has three or more executions against it without sufficient assets, or hides, abandons its business or closes its establishment without an empowered agent.Ley 12 de 2016, art. 80, 2016-03-19 official text · verified 2026-10-29

2. A debtor's voluntary filing must include a certified copy of the shareholder resolution to seek liquidation, a list of assets with liens, pending proceedings, debts and credits with creditor details, a payroll or list of collaborators with labour benefits owed, the reasons for insolvency, audited financial statements for the last fiscal year, interim statements for the last quarter certified by an independent public accountant, details of shareholders or officers, and accounting records. The court declares liquidation within five days if requirements are met.
Cost to do it: Audit and accounting costs for the required statements.Ley 12 de 2016, arts. 82 and 83, 2016-03-19 official text · verified 2026-10-29

3. A creditor's petition must include proof of the cause and a court deposit certificate for B/.1,000 in cash at the Banco Nacional de Panamá for initial costs; the debtor has 20 days to answer.
Cost to do it: B/.1,000 deposit.
Example: B/.1,000 deposit. / US$1,000 deposit.Ley 12 de 2016, art. 84, 2016-03-19 official text · verified 2026-10-29

4. The liquidation order is communicated to the Registro Público to stop registering titles from the debtor, to MICI for annotation on the Aviso de Operación, and to the Caja de Seguro Social, the DGI and the municipality so they participate. It cannot be backdated more than four years. The debtor is removed from administering or disposing of its assets.Ley 12 de 2016, arts. 96, 97 and 99, 2016-03-19 official text · verified 2026-10-29

5. Acts executed after the order or in the prior year are void for the estate if gratuitous or undervalued, if they secure earlier debts, pay debts not yet due or give assets in payment of due debts, or are registered amendments of the pacto social that reduce equity. Gratuitous acts in favour of shareholders, directors, officers, managers, liquidators or relatives are void if made within four years.Ley 12 de 2016, arts. 118 and 119, 2016-03-19 official text · verified 2026-10-29

6. The concurso liquidator may bring liability actions against directors, officers, managers, auditors and liquidators without a shareholder resolution, and from the liquidation order the court may attach assets of present directors and those in office in the prior two years where negligent or fraudulent conduct against creditors is likely.Ley 12 de 2016, art. 139, 2016-03-19 official text · verified 2026-10-29

7. Provisional liquidator fees are set by the court at no more than B/.3,000 a month and deposited by the applicant within five days; final fees are set by the first creditors' meeting or by the judge.
Cost to do it: Up to B/.3,000 a month of provisional liquidator fees.
Example: Six months: up to B/.18,000. / Up to US$18,000.Ley 12 de 2016, art. 158, 2016-03-19 official text · verified 2026-10-29

8. If there are no assets to pay costs and claims, the judge may end the liquidation with the creditors' consent, or if creditors refuse but do not fund the costs. Otherwise the concurso ends with approval of the liquidator's final report after final distribution, and the closing order is sent to the registrar.Ley 12 de 2016, arts. 205, 208 and 209, 2016-03-19 official text · verified 2026-10-29

Step by step

Board and shareholders resolve to seek liquidation.
Prepare the art. 82 file, including audited and interim financial statements and the payroll list.
File with the circuit insolvency court; expect the order within five days if complete.
Hand assets and records to the liquidator; cooperate with inventory and claims verification.
After final distribution and approval of the final report, the court sends the closing order to the registrar.

Common traps

Paying a related creditor or granting new security in the year before the order can be voided.
Directors in office during the prior two years can have assets attached.
If the company can pay its debts, use the solvent dissolution route instead.

Sources

← Closing down and employees: closure dismissals, prior authorisation, indemnity and seniority premiumWho pays after exit: director, liquidator and shareholder liability in Panama →

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