Portugal    Global Business Entities Guide     Portugal     Corporation - Sociedade Anónima (S.A.)

Corporation - Sociedad Anónima (SA)

Private Limited Company – Sociedade por Quotas (Lda) and Sole Shareholder Private Limited Company - Sociedade Unipessoal por Quotas


What is the main source of law authorising this entity form?

Companies Code (Código das Sociedades Comerciais)

Securities Code (Código dos Valores Mobiliários)


Give a brief summary of the entity form:

Does the entity possess separate legal personality?

The Company has legal personality.

(Maximum) period of existence

There is no maximum period of existence unless otherwise stated under the Company’s Articles of Association (Estatutos da Sociedade).

Governing document(s)

The Company is governed by its Articles of Association (contained in the Company’s incorporation documentation or subsequent amendment through Shareholders’ resolution (Deliberação dos Acionistas);

Liability of incorporators / shareholders

Shareholders are not personally liable for the debts of the Company, except for the subscription amount related to their own shares;

(Governing) bodies

Generally, there are alternative governing structures:

  • Board of Directors (Conselho de Administração) (or sole director (Administrador Único) if the share capital does not exceed €200,000) + Audit Board (Conselho Fiscal) (or Sole Auditor) (Fiscal Unico);
  • Board of Directors (including an Audit Commission) + Auditor (Revisor Oficial de Contas – ROC);
  • Executive Board of Directors (or sole director if the share capital does not exceed €200,000) + General and Supervisory Board + Auditor.
Other particularities

N/A.


Can this type of entity be involved in international transactions and restructurings (e.g. cross border mergers, asset acquisitions, equity acquisitions, etc.)?

Under Portuguese Law, Private Limited Companies may enter into legal mergers (whereby the Company ceases to exist by operation of Law and its assets are acquired under universal succession of title), legal spin-off of all or part of its assets (with universal succession of title of the relevant assets) and conversions (changing into another form of legal entity without ceasing to exist).

International mergers are possible pursuant to EU legislation.


Can this type of entity be publicly listed or held?

Yes.


Can this type of entity be used for a non-profit or charitable organization?

Generally no, given its nature of a commercial entity, with the ability and purpose to generate and distribute profit to its shareholders, and being subject to corporate income tax.



Give a brief summary of the process of incorporation, formation, or organization, including:

Main documents required

Company’s name certificate issued by the Companies Registry (Conservatória de Registo Comercial); Articles of Association.

Incorporation Agreement (Contrato de Sociedade).

Documents for the registration of corporate bodies’ members and ultimate beneficiary

Involvement of notary, company register, governmental authorities

The Incorporation agreement is signed by the founder shareholders whose signatures shall be certified by a notary or lawyer and all incorporation documents filed with the Commercial Registry (Registo Comercial) for due registration as well as before Tax Department and Social Security Office (Autoridade Tributária e Aduaneira e Segurança Social).

Timing (estimate)

The Company must be registered within 60 days from the date of execution of the Incorporation Agreement before the Commercial Registry.

Main costs, including registration and similar fees (excluding legal fees)

Main costs are the registration costs and Lawyers’ fees;

Is a description of the anticipated business or purpose of the entity required for incorporation, formation or organization?

Yes, the business purpose must be specified under the Company’s Articles of Association.


Minimum number of incorporators / shareholders and residency requirements

There must be at least five shareholders (local residents or not) or just one Shareholder if the Corporation is initially incorporated by a company as sole shareholder.


Minimum number of directors (or other applicable officers) and residency requirements

There must be at least two appointed members of the Board of Directors at the time of incorporation or a Sole Director, when permitted by Law.

Portuguese law does not establish any residency requirements but residency is relevant for tax purposes.


Minimum share capital, or equivalent, and payment requirements (including opening a bank account)

The minimum share capital of a private limited company is €50,000. The payment of 70% of share capital paid in cash may be postponed for a five year’s period.


Is the physical presence of incorporators / directors required in the jurisdiction for incorporation, formation or organization?

Incorporation may be undertaken by representatives appointed under Power of Attorney.


Is a tax identification number, or equivalent, required? If so, how is it obtained?

The Company will be provided with a company number at the time of application for the Company’s name certificate. Such number will identify the Company before all authorities, including the tax department (Autoridade Tributária e Aduaneira).



What is the title of the applicable company registry?

Commercial Registration Department (Conservatória do Registo Comercial).


What types of information must be filed at the (company) register, and which of them will it be publicly available, e.g.:

The following information must be provided and is publically available at the Commercial Registry:

  • Articles of Association and incorporation documents;
  • Beneficial owner(s);
  • Date of incorporation;
  • Business purpose,
  • Share capital;
  • Corporate Bodies’ (Órgãos Sociais) members and respective addresses;
  • Binding arrangements;
  • Annual Accounts;
  • Insolvency and liquidation;
  • Court procedures subject to registration;



 


What is the title of the executive body and its members? What are their main duties, tasks and responsibilities?

Board of Directors and Directors.

The Board of Directors represents the company and must carry out the management of the Company and its commercial activity and follow the Shareholders’ resolutions, and the Audit Board’s (Conselho Fiscal) or Audit Commission (Comissão de Auditoria) interventions whenever provided by Law.

The Board of Directors has exclusive and full powers to represent the Company.


How are the members of executive body appointed, dismissed and replaced?

Initially, the members of the Board of Directors are appointed at incorporation of the Company or founding Shareholders General Meeting and afterwards may be appointed by way of resolution by the Shareholders General Meeting (Assembleia Geral de Acionistas). Generally, members of the Board of Directors are dismissed and replaced by way of resolution by the Shareholders General Meeting or termination of their mandate.

Members of the Executive Board of Directors (Conselho de Administração Executivo), if not appointed under the Company’s Articles of Associations, are appointed by the General and Supervisory Board (Conselho Geral e de Supervisão) or by the Shareholders General Meeting, if so provided by the Company’s Articles of Association.

Generally, the members of the Executive Board of Directors are dismissed by the appointing corporate body.


Is it possible to appoint corporate directors or must all directors be natural persons?

Yes.


Is there a requirement to have non-executive directors? How are they appointed, dismissed and replaced? Do non-executive directors serve on a separate body (two-tier structure) or can a one-tier board (with executive and non-executives) be appointed, or is some alternate structure used?

Generally no.

There are alternative governing structures:

  • Board of Directors (or sole director if the Company’s share capital does not exceed €200,000);
  • Board of Directors (including an Audit Commission);
  • Executive Board of Directors (or sole director if the Company’s share capital does not exceed €200,000) + General and Supervisory Board.

The Company’s Articles of Association may provide for the appointment of an Executive Commission () by the Board of Directors, establishing delegated powers in compliance with legal restrictions.


What is the title of the body of owners / shareholders / members, and what are the main tasks / responsibilities / powers of that body?

The Shareholders General Meeting (consisting of shareholders or other parties holding equivalent rights) with capacity to resolve on certain matters provided by law and by the Company’s Articles of Association. Generally, the main rights are those regarding amending the Company’s Articles of Association, the appointment, replacement and dismissal of members of the Board of Directors, mergers, liquidation.


What are the majority and quorum requirements for decisions by the shareholders? Can they be varied or changed?

The Shareholders General Meeting may adopt resolutions with the presence of any number of shareholders except when deciding on specific matters requiring a qualified majority (by Law or by the Company’s Articles of Association), in which case at least one third of the share capital must be present or represented.

If not provided otherwise under the Company’s Articles of Association, each share represents one vote.

Unless provided otherwise by Law or by the Company’s Articles of Association, shareholders’ resolutions are passed by an absolute majority of the votes.


Any special governance regimes (e.g. depending on size, being listed at a stock exchange, or other criteria)?

The appointment of an Audit Board and an external Auditor is mandatory for (i) Corporations listed under a stock exchange, and (ii) for Corporations (without a sole shareholder which adopts this same audit structure) if two of the following limits are exceeded (for two consecutive years): total balance sheet € 20,000,000; / Net turnover €40,000,000; / average number of employees 250.

Additionally, listed corporations must appoint a Company secretary.


What are the periodic accounting obligations incumbent upon the entity? To whom must those accounts be submitted?

Generally, the Shareholders General Meeting must approve the annual accounts within three months counted from the end of the financial year to which they refer.

Accounts must be filed with Simplified Company Information (Informação Empresarial Simplificada – IES) until the 15th day of the 7th month counted from the end of the financial year to which it refers.


Is the entity permitted to determine its own financial year?

Yes, subject to notice to Tax Authorities.


Is the entity subject to any statutory (external) auditor obligations?

The appointment of an Audit Board and an external Auditor is mandatory for (i) Corporations listed on a stock exchange, and (ii) for Corporations (without a sole shareholder which adopts this same audit structure) if two of the following limits are exceeded (for two consecutive years): total balance sheet €20,000,000; / Net turnover €40,000,000; / average number of employees 250.


Requirements to appoint other persons (officers, secretary, internal auditor / accountants). If so, what are their functions? Are there any residency requirements?

The appointment of a Company Secretary (Secretário) is not mandatory unless in case of a stock exchange listed Corporation.

The secretary shall, among other acts, act as secretary of the meetings of Corporate Bodies (Órgãos Sociais), prepare the minutes, record the Company’s books, and certify signatures and copies of the Company’s documents.

No residency requirements exist but all members of corporate bodies must obtain their own taxpayer number.



What is the title designated for 'ownership interests' (e.g. shares, quota, interests, membership)?

Shares (Ações)


Are different classes of ownership interests possible? If so, what are some examples of different classes?

Yes. The Corporation’s Articles of Association may establish that specific shares are entitled to different rights such as those pertaining to dividends.

Shares with the same rights form a class of shares.


What documentation is required for the transfer of ownership interests?

Generally, shares are transferable by endorsement on the share certificate followed by registration before the Issuer or financial intermediary.


Are there any additional formal requirements required for the transfer of ownership (notary, approvals, stamping, filings, corporate records)?

The Company’s Articles of Association may impose restrictions on the transfer of shares, providing, for instance, for Shareholders’ pre-emptive rights or prior consent from the Company.


Are there any applicable stamp duties imposed when transferring ownership interests?

No.


How are shares issued? (including information on payment obligations, registration requirements)

The initial number of shares and their respective value must be defined under the incorporation agreement.

Changes to the Company’s share capital are subject to a Board of Directors resolution.


Further information on equity contributions, e.g., non-cash payments on shares, (share premium) contributions without issuances of shares, can partially paid shares/ownership interests be permitted and what are the restrictions on them?

The payment of the shares value may be made in other forms than cash, subject to a prior report issued by an independent auditor regarding the relevant assets.

Additional payments are possible if so provided by the incorporation agreement.

The incorporation agreement may provide for the payment of Share premium.


Any requirements with respect to share cancellation, share repurchase and other capital reductions

Share cancellation is possible subject to legal requirements including but not limited to a prior Shareholders’ resolution and equity availability.

Share repurchases are possible, subject to legal requirements and conditions provided by the Company’s Articles of Association.

Capital reductions are possible, subject to legal requirements and conditions provided by the Company’s Articles of Association.


Any requirements with respect to distributions to shareholders?

The Shareholders General Meeting must pass a resolution approving a dividend distribution subject to legal and statutory reserves.


Can the owners or shareholders adopt a restrictive or governing agreement among themselves such as a Shareholders Agreement?

Yes, a shareholders agreement may be executed by the shareholders and will be enforceable between the signing parties.



Which are the typical annual maintenance costs of maintaining the existence and legal good standing of such an entity (excluding legal fees)?

The company must maintain its business address and have members of corporate bodies. The shareholders must hold their annual general meeting each year (or adopt a resolution in writing). In addition, annual accounts must be prepared and adopted each year and the applicable tax filings must be made.


What are the general corporate tax rates? (Specify if there is a national versus local distinction).

Generally, 21% of income tax is due for taxable profits. Local tax (Derrama) may apply in addition up to 1,5%.

Specific rules and provisions are deemed applicable.



Summary of any specific matters, e.g. recent or prospective major legal developments

No regime changes are expected for Private Limited Companies during 2021.

Private Limited Companies are the most common type of companies existing in Portugal due to their simplified incorporation procedure and simplified and inexpensive corporate operation.


Search by:

Need more information?
Contact a member firm:
Ana Sofia Batista
Abreu Advogados
Portugal


José Maria Corrêa de Sampaio
Abreu Advogados
Portugal


Manuel Santos Vitor
Abreu Advogados
Portugal