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

Commercial Companies Code (Código das Sociedades Comerciais).

Give a brief summary of the entity form:

Does the entity possess separate legal personality?

The Company has a separate 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 Quotaholders' resolution);

Liability of incorporators / shareholders

Quotaholders are not personally liable for the debts of the Company (unless otherwise provided by the Company's Articles of Association), except for the subscription amount related to their own quotas;

(Governing) bodies

Directors; and

Other particularities

The Company's Articles of Association may provide for a Supervisory Board (Conselho Fiscal).

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

Under Portuguese Law, Private Limited Companies may enter into legal mergers (whereby another company is merged into the Company or the Company itself is merged into another company and 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, or its securities be issued to members of the public?

No, only Corporations (Sociedades Anónimas – S.A.) may be listed on a stock exchange market.

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

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

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

Main documents required

Main Documents:

• Company's name certificate issued by Companies Registry (Conservatória do Registo Comercial);
• Articles of Association;
• Incorporation Agreement (Contrato de Sociedade); and
• Documents for the registration of corporate bodies’ members, notably the declaration of acceptance of the appointment of each director, and ultimate beneficiary owner identification.

Involvement of notary, company register, governmental authorities

The Incorporation Agreement is signed by the founding quotaholders whose signatures must be certified by a notary or lawyer and all incorporation documents filed with the Commercial Registry (Registo Comercial) for due registration and with the Tax Department and Social Security Office (Autoridade Tributária e Aduaneira e Segurança Social);

Timing (estimate)

The rule set forth in the Commercial Registry Code is that registration must be carried out within 10 (ten) days from the filing of the registration application, unless an urgent registration is requested by the applicant, in which case the registration must be completed within a maximum of 1 (one) business day. In practice, however, the response time may vary significantly depending on the operational capacity of the registry offices at any given time

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

Main costs are the registration costs and lawyers' fees; and

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 two (2) quotaholders, individuals or incorporated entities, local residents or not.

In case of Sole Quotaholder Private Limited Companies (Sociedades Unipessoais por Quotas), a sole quotaholder shall suffice, provided such sole quotaholder is not itself a Sole Quotaholder Private Limited Company.

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

There must be at least one (1) appointed director at the time of incorporation. Portuguese law does not establish any residency requirements, but residency is relevant for tax purposes and all members of corporate bodies must obtain their own Portuguese taxpayer number. In that sense, if the appointed director resides abroad, it is always necessary to obtain a Portuguese taxpayer number. Additionally, if the country of residence is outside the European Union, the appointment of a tax representative of the director in Portugal will also be required.

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

The minimum share capital of a private limited company is €2. The payment of the share capital may be made at any point prior to the end of the first fiscal year.

In case of Sole Quotaholder Private Limited companies, the minimum share capital is €1.

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

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

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

The Company is 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 Office (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.: Articles or other formation document, Articles or other formation document, Group structure, Share capital, Directors, Accounts, Insolvency, good-standing, liquidation, Liens and encumbrances on the shares, Liens and encumbrances on assets of the entity, Other (e.g. litigation, tax matters)

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

• Articles of Association and incorporation documents;
• Quotaholders and respective quotas, their names, addresses, taxpayer number and marital status;
• Date of incorporation;
• Business purpose,
• Share capital;
• Directors, their names, addresses and taxpayer numbers;
• Secretary (if any) name and address;
• Supervisory board members (membros do Conselho Fiscal) (if any), their names, addresses and taxpayer numbers;
• Annual Accounts;
• Insolvency, dissolution and liquidation;
• Court procedures subject to registration; and
• Liens and encumbrances over the quotas.

Furthermore, information regarding the Ultimate Beneficial Owner is also available on the official website.

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

Directors (Gerentes). The directors represent the company and must carry out management duties in the interests of the company in accordance with the Company's business purpose as provided in the Articles of Association of the company and following the quotaholders resolutions.

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

Initially, the directors are appointed at incorporation of the Company and afterwards may be appointed by a resolution adopted by the Quotaholders General Meeting (Assembleia Geral dos Sócios) unless otherwise stated under the Company's Articles of Association.

Generally, directors are dismissed and replaced by a resolution adopted by the Quotaholders General Meeting or termination of their mandate.

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

The Commercial Companies Code states that all directors of a private limited company must be natural persons with full legal capacity. Notwithstanding this, a minority view in legal scholarship argues for the admissibility of appointing legal entities as directors.

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?

No, the Company is managed by the appointed directors who will be able to appoint representatives or attorneys for specific acts or delegate their powers to one (1) or more directors for specific business.

The directors have, generally, the same representative powers, unless otherwise provided by the Company's Articles of Association.

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

The Quotaholders General Meeting (consisting of quotaholders or other parties holding equivalent rights) with the capacity to act on the matters provided by law and by the Company's Articles of Association, which must be followed by the Company's directors.

Generally, the main rights are those with respect to amending the Company's Articles of Association, the appointment, replacement and dismissal of directors, share capital changes, assets and profits distributions, and dissolution and liquidation.

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

As a rule, decisions are taken by the quotaholders in accordance with an absolute majority (50% + 1) of the votes cast. This general rule can be varied by a specified majority as required by law or the Company's Articles of Association.

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

A Private Limited Company which does not have a Supervisory Board (Conselho Fiscal) or an appointed auditor, must appoint an auditor if two (2) of the following limits are exceeded (for two (2) consecutive years): (i) Total balance sheet €1,500,000; (ii) net turnover €3,000,000; and (iii) average number of employees equals at least 50.

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

The Quotaholders General Meeting must approve the annual accounts within three (3) months counted from the end of the financial year to which they refer, or within five (5) months from the same date in the case of companies required to present consolidated accounts or that apply the equity accounting method. Accounts must be filed with Simplified Company Information (Informação Empresarial Simplificada – IES) by 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?

A Private Limited Company which does not have a Supervisory Board or an appointed auditor, must appoint an auditor if two (2) of the following limits are exceeded (for two (2) consecutive years): (i) Total balance sheet €1,500,000; (ii) net turnover €3,000,000; and (iii) average number of employees equals at least 50.

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 Supervisory Board or Auditor is not mandatory, except when provided by law or by the Company's Articles of Association. Likewise, the appointment of a Company Secretary (Secretário da Sociedade) is not mandatory. No residency requirements exist but all members of corporate bodies must obtain their own Portuguese taxpayer number. Additionally, if the country of residence is outside the European Union, the appointment of a tax representative in Portugal will also be required.

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

Quotas.

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

No, but special rights can be granted to some quotas if so, provided pursuant the incorporation agreement.

What documentation is required for the transfer of ownership interests?

For the transfer of quotas a private contract of transfer of quotas signed by the parties shall suffice. Specific requirements for the transfer of quotas may be provided by the Company's Articles of Association.

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

The transfer of quotas is not enforceable against the Company until the Company grants its consent, except when such consent is waived by the Company's Articles of Association or when provided by law, such as in cases involving the transfer of quotas between spouses, between ascendants and descendants or between the company’s quotaholders.

Subsequent registration of the transfer of quotas before Commercial Registry is required.

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 quotas and their respective values are defined in the incorporation agreement.

Changes to the Company's share capital are subject to a Quotaholders General Meeting Resolution (deliberação em Assembleia Geral dos Sócios).

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 quotas' value may be made in forms other than cash, subject to a prior report on the relevant assets and their valuation issued by an independent auditor.

Yes, share premium contributions (ágio) without the issuance of 'ownership interests' are possible, furthermore, supplementary payments are possible if provided by the incorporation agreement or made voluntarily.

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

Share cancellation is possible subject to legal requirements and conditions provided by the Company's Articles of Association, including but not limited to equity availability.

Share repurchases are subject to legal requirements and conditions provided by the Company's Articles of Association deemed applicable to transfers of quotas.

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 Quotaholders General Meeting must resolve on approving the distribution of dividends 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 (acordo parasocial) may be executed by the quotaholders and will be enforceable between the signatory 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 directors and an appointed accountant. The quotaholders must hold their annual general meeting each year (or adopt a unanimous written resolution). 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, 20% of income tax is payable for taxable profits. This rate is applicable to tax periods beginning on or after January 1, 2025, as it was established under the amended wording of the State Budget Law (Lei do Orçamento do Estado), dated December 31, 2024. Local tax (Derrama) may apply in addition up to 1.5%. State tax (Derrama) may apply in addition up to 3%, 5% and 9%, depending on whether the taxable income in euros exceeds 1,500,000 up to 7,500,000; exceeds 7,500,000 up to 35,000,000; or exceeds 35,000,000.

Various 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 2025.

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