by Liliana Moreira [email protected]
Liliana Moreira is a Legal Counsel of the Moneris Group, specialising in Corporate, Mergers & Acquisitions
This article intends to provide a brief summary on the main legal characteristics of a limited liability company (“Sociedade por Quotas”) in Portugal.
Minimum share capital requirement
The share capital of a Sociedade por Quotas is divided into quotas. A quota represents a stake of the share capital and is a form of registered share always nominative and where no certificates are issued.
Under the recent Decree-Law No. 33/2011 – adopting measures to simplify the procedures for incorporation of private limited companies and individual firms by quotas – published on March 7, it allows the capital of the abovementioned companies to be freely set by their partners, in the respective articles of association, abolishing the minimum capital requirements of €5,000. The share capital shall therefore correspond to the sum of the amounts of quotas subscribed by the partners.
This new legal framework allows the incorporation of individual firms by quotas with a share capital of €1 and private limited companies with a share capital of €2. The Decree-Law No. 33/2011 also allows that partners of private limited companies undertake the payment of their initial capital contribution by the end of the first financial year of the company.
Please note that the rules set forth in the abovementioned decree-law are not applicable to those companies governed by special laws and to the companies which incorporation depends on a special permit.
Share capital deposited
The total amount of share capital paid up in cash must be deposited at an authorised credit institution, in an account held in the name of the future company.
Shareholders
As a general rule, a Sociedade por Quotas is required to have at least two shareholders. However, Portuguese Law allows the incorporation of a limited liability company by a sole shareholder (“Sociedade Unipessoal por Quotas”). In this case, the Portuguese Companies Code provides specific rules which apply to this type of company.
Quotas
A quota is a form of registered share. No certificates are issued but the identity of the initial shareholders, as well as the transfers of quotas and their owners, are registered at the relevant Commercial Registry Office (“Conservatória do Registo Comercial”).
Most parts of the acts in relation to quotas, such as transfers, divisions and charges must be made by private contract or public deed and registered with the Commercial Registry.
The transfer of quotas requires the consent of the corporate entity with capacity to represent the company for this purpose, unless the transfer is carried out between two shareholders.
Corporate Bodies
The bodies of a Limited Liability Company are:
• The General Shareholders Meeting.
• The Directors, who shall be individuals with full legal capacity.
The articles of association may determine the company to have a supervisory board.
However, this appointment is not mandatory. In the event that no supervisory board is appointed in the articles of association, the Companies Code provides that an audit shall be appointed whenever, during two consecutive years, two of the following limits are exceeded:
• Total amount of the balance sheet: €1,500,000
• Total turnover and other revenue in excess of €3,000,000
• Yearly average number of employees: 50.
But as I referred in the beginning of the article, it is only a brief summary on the main legal characteristics of a limited liability company in Portugal because there exist several other significant aspects under Portuguese Law.
Article written by Liliana Moreira: [email protected].
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