PORTUGAL Law and Practice Contributed by: Miguel Santos Almeida, Maria Novo Baptista and João Saúde, Sérvulo & Associados
organisational flexibility of a private company. SDQs offer a balanced model, enabling shared ownership, private investment and operational efficiency, while maintaining a close link to the founding sports club. As to the method of incorporation, sports companies can be founded either from scratch, by transformation of an existing sports club or by the legal personalisa - tion of a team that participates, or intends to partici - pate, in sports competitions. Non-professional sports clubs can also be incorpo - rated as a sports company, but it is not mandatory as they do not participate in professional sports com - petitions. Sports federations assume the legal form of non-profit private associations with a sports public utility status. This status grants sports federations competence for the exclusive exercise of regulatory, disciplinary and other powers of a public nature to the extent that they are a manifestation of the constitutional duty of the State to promote, stimulate, guide and support the practice and dissemination of physical culture and sports. 4.2 Corporate Governance Codes Corporate Governance In accordance with Law No 14/2024 of January 19th, sports federations, sports companies and sports clubs are obliged annually to promote training with the purpose of making all sports agents aware of the values of truth, fairness and correctness, and to pre - vent actions that may fraudulently alter the results of the competition. Sports federations, sports companies and sports clubs must have organised accounting according to the rules of the official Accounting Standards System. Sports companies are subject to specific rules set out in Law No 39/2023, such as: • minimum share capital limits depending on the sports modality and league division in which the company participates and the legal form used;
• prohibition against sports companies participat - ing in the capital stock of a company of identical nature; • mandatory full-time commitment of executive directors; • a special regime concerning incompatibilities and independence of directors and managers of sports companies; • prohibition against members of the governing bod - ies of sports federations or associations of clubs of the same sport, professional players, coaches and referees in the sport being directors or managers of sports companies; and • limitations on the exercise of rights of shareholders who hold shares in more than one public limited sports company working within the same sport modality. As for sports federations, there are specific rules con - cerning the exercise of the mandate of the members of the governing bodies, such as prohibitions on hold - ing another position in the federation or holding such positions as club or association manager, referee, judge or coach. The term of office is for a maximum of four years. Non-compliance with governance requirements may result in disciplinary sanctions, including fines of up to EUR500,000 and sporting sanctions. While Portuguese insolvency law applies equally to sports organisations, professional sport introduces additional consequences. In particular, entry into insolvency proceedings may affect licensing eligibility, and failure to meet financial obligations (eg, towards players, staff or tax authorities) can result in points deductions, transfer embargoes or exclusion from competitions. Corporate Liability According to the specific provisions of Decree-Law No 248-B/2008, the liability of sports federations, the members of their bodies, employees, legal represent - atives or agents for actions or omissions carried out in the exercise, and with the prerogatives, of public power is governed by Law No 67/2007 of December 31st, which establishes the regime of non-contractual liability of the State and other public entities. Pursuant
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