Panama Private Interest Foundation Guidelines

Article 19.
The foundation charter or its regulations may provide that the members of the Foundation Council may only exercise their powers by obtaining previous authorization of a protector, a committee or any other supervisory body, appointed by the founder or by the majority of the founders. The members of the Foundation Council shall not held liable for the 1088 or deterioration of the assets of the foundation, nor for any damages or prejudice caused, when said authorization has been duly obtained.

Article 20.
Unless otherwise provided for in the foundation charter or its regulations, the Foundation Council must render an accounting of its activities to the beneficiaries and, when applicable, to the supervisory body. If the foundation charter or its regulations stipulate nothing in this regards, the rendering of accounts must be done annually. If the accounts 90 rendered are not objected within the term established in the foundation charter or its regulations, in lack of it, it shall be deemed as having been approved within ninety (90) days from the day it was received, for which purpose, record of this term shall be made in the report rendering the accounts. Such period having lapsed or the account approved, the members of the Foundation Council shall be exempted from liability for their administration, unless they had failed to act with the diligence of a bonus paterfamilias. Such approval does not exonerate them before the beneficiaries or third parties having an interest in the foundation, for damages caused due to gross negligence or fraud in the administration of the foundation.

Article 21.
In the foundation charter the founder may reserve for himself/herself or for other persons, the right to remove the members of the foundation Council, as well as to appoint or add new members.

Article 22.
When the foundation charter or its regulations do not establish anything in respect to the right to and the causes for removal of the members of the Foundation Council, these may be judicially removed, through summary proceedings, for the following causes:

  1. When their interests are incompatible with the interests of the beneficiaries or the founder.
  2. If the administration of the assets of the foundation lacked the diligence of a bonus paterfamilias.
  3. If they are convicted for a crime against private property or public faith. In this case, while the criminal proceedings are in progress, the temporary suspension of the member on trial may be decreed.
  4. For incapacity or impossibility to carry out the objectives of the foundation, from the time such causes may arise.
  5. For insolvency or bankruptcy proceedings.

Article 23.
The founder and beneficiary or beneficiaries may request the judicial removal of the members of the Foundation Council. Should the beneficiaries be disabled or under age they may be represented by whoever exercise upon them the "patria potestas" or guardianship, as the case may be.

The judgement of the court decreeing the removal, shall appoint new members in replacement of the previous ones, who shall be persons with sufficient capacity, competence and good moral standing to administer the assets of the foundation, in accordance with the purposes established by the founder.

Article 24.
The foundation charter or its regulations may provide for the constitution of supervisory bodies, that may be constituted by natural or juridical persons, such as auditors, protectors of the foundation or others. The duties of the supervisory bodies shall be established in the foundation charter or its regulations and may include, among others, the following:

  1. To ensure the fulfillment of the purposes of the foundation by the Foundation Council and (to protect) the rights and interests of the beneficiaries;
  2. To demand from the Foundation Council, the rendering of accounts;
  3. To modify the purposes and objectives of the foundation, if and when they become too costly or impossible to fulfil.
  4. To appoint new members of the Foundation Council due to temporary or permanent absence or for expiration of the period of anyone of them.
  5. To appoint new members of the Foundation Council in cases of temporary or accidental absence of anyone of them.
  6. To increase the number of members of the Foundation Council.
  7. To approve the acts adopted by the Foundation Council, as indicated in the foundation charter or its regulations.
  8. To guard the assets of the foundation and observe their application to the uses or purposes stated in the foundation charter.
  9. To exclude beneficiaries of the foundation and to add others in accordance with the provisions of the foundation charter or its regulations.


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