PORTUGAL Law and Practice Contributed by: Susana Braz, Jaime Costa and Tomás Simões, Santiago Mediano e Associados, SP, RL
1. Introductory 1.1 Forms of Corporate/Business Organisations General Characteristics of the Principal Forms of Corporate Organisations Private limited company (Sociedade por quotas or Lda), equivalent to the French SARL or to the German GmbH • This type of company is particularly suited to small and medium-sized enterprises. • A minimum share capital is not required. • Each quota must have a minimum value of EUR1.00. • A minimum of two shareholders is required. • Shareholders are liable under the terms of the by-laws and only up to the amount of the company’s share capital. Only the company’s assets are liable towards third-party creditors. • The managers bear subsidiary liability towards third parties and share joint liabil - ity between them for all taxes related to the company’s financial year, unless they are able to prove that the insufficiency of the compa - ny’s assets to cover tax liabilities was not due to any fault on their part. Public limited company (Sociedade Anónima or S.A.), equivalent to the French SA or to the German AG • This type of company is particularly suited to larger enterprises, as it entails a more com - plex administrative structure. • It requires a minimum share capital of EUR50,000; • Each share must have a nominal value equal to or higher than EUR0.01; • The minimum number of shareholders to incorporate a company is five. However, single-shareholder companies are permitted, provided the sole shareholder is a corporate entity.
• Shareholders are liable only up to the amount of the shares they hold. • The directors bear subsidiary liability towards third parties and share joint liability between them for all taxes related to the company’s financial year, unless they are able to prove that the insufficiency of the company’s assets to cover tax liabilities was not due to any fault on their part. Sole proprietorship – Sociedade Unipessoal Por Quotas (Unipessoal, Lda./Limitada) • It has essentially the same structure as the private limited company. • It is composed of one shareholder – an indi - vidual or a company. • It cannot have as a shareholder another sole proprietorship. • An individual cannot be a shareholder of more than one sole proprietorship. • The sole shareholder has the same responsi - bilities as the general meeting of sharehold - ers; • The name of these companies must include the expression “Unipessoal” (sole proprietor). Comparing the Types of Companies The main advantages of a public limited com - pany lie, in the ease with which its shares can be transferred, the ability to raise capital through public subscription, and, to some extent, the ability to keep the identities of shareholders confidential. This type of company also tends to project the image of being larger and more robust. However, such companies come with a more complex organisational structure and, as a result, are more costly to operate than a pri - vate limited company, since they are subject to stricter requirements and formalities. On the other hand, private limited companies offer a simpler, more flexible structure, making
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