PORTUGAL Law and Practice Contributed by: Manuel Requicha Ferreira and Diana Avillez Caldeira, Cuatrecasas
5.2 Floating Charges and/or Similar Security Interests A floating charge or any other universal or similar secu- rity interest cannot be granted over all of a company’s present and future assets. Security is granted over specific assets, which need to be identified. Security over future assets can be granted to the extent that they are identifiable, although there are further limita- tions depending on the type of security. Some authors argue for the admissibility, even if in a limited way, of floating charges. 5.3 Downstream, Upstream and Cross- Stream Guarantees In accordance with the PCC, downstream, upstream and cross-stream guarantees are allowed provided that certain requirements are met. However, a few scholars have argued that in cases where there is only a dominant influence (capable of originating a “de facto group”), upstream guarantees are not allowed due to the lack of legal protection of the controlled company. As previously mentioned, Portuguese companies must have a justified corporate self-interest in granting guarantees or security to third parties, or otherwise be in a group or control relationship with the beneficiaries (see 3.2 Restrictions on Foreign Lenders Receiving Security ). Usually, cross-stream guarantees cannot fulfil the requirement of the group or control relationship. As such, they need to meet the requirement of the justi- fied corporate self-interest; otherwise, they will be null and void. 5.4 Restrictions on the Target The PCC provides for a prohibition of financial assis- tance. The target company is prohibited from grant- ing any type of guarantees or security, or any other type of financing for the purposes of acquiring shares in the target company or its direct or indirect parent company. This also includes any guarantees or secu- rity for the refinancing of a previous debt incurred in the acquisition of shares of the target company or its parent company.
sel and aircraft financing), security is taken over the financed assets. If the requirements are met, the lend- ers will use the financial collateral regime, such as financial pledges over bank accounts or shares. Formalities Formalities vary significantly according to the type of security. In terms of documentation, mortgages over properties and banking pledges require a public deed or a document authenticated by a notary. Converse- ly, bank account pledges and share pledges require only a simple private document, except for commer- cial pledges with appropriation (which require a cer- tification of signatures). In any case, public deeds or notarial authentication are usually recommended to serve as judicial enforcement titles. In terms of possessory or similar actions, the creation of a pledge over movable assets requires the asset to be delivered to the creditor (unless the pledge at stake is a banking pledge). Assignments of receivables and pledges over credits must be notified to the respec- tive debtors. In most cases, taxation (stamp duty) is the most sig- nificant cost, while notarial costs are not significant. Registration The registration requirements also vary with the type of security at stake. Pledges over bank accounts require registration with the bank with which the account is held. Pledges over shares are subject to registra- tion with the issuer (in the shares’ registry book) and inscription of the pledge in the share certificates (in the case of shares represented by certificates), subject to registration with the relevant depositary bank (in the case of deposited shares) or to registration with the relevant financial intermediary with which the shares are registered (in the case of dematerialised shares), regardless of whether they are integrated in a central- ised clearing system. Pledges over quotas are subject to registration with the commercial registry. Mortgages over properties or registrable movable assets – such as aircraft, vessels or vehicles – are subject to registration with the com- petent registry office (real estate or other). Registration costs are not material.
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