PORTUGAL Law and Practice Contributed by: Susana Braz, Jaime Costa and Tomás Simões, Santiago Mediano e Associados, SP, RL
Furthermore, the board of directors is required to issue annually a clear and comprehensive report (or chapter in the annual management report to be submitted with the annual accounts) providing a comprehensive view of remunera - tion, including all benefits allocated or due in the previous financial year to each member of the administrative and supervisory bodies accord - ing to the remuneration policy, including newly appointed members and former members. This report is submitted to the annual general meet - ing of shareholders for approval of the accounts, after which it is also published on the company’s website where it shall remain available for ten years. The CGS recommends that the disclosure of the amounts paid to any member of the company’s body or committee due to the termination of their duties must be made either in the govern - ance report or in the remuneration report. Shareholders with shares representing at least 1% of the share capital may require information and documents on the amounts paid in the last three years to corporate body members. 5. Shareholders 5.1 Relationship Between Companies and Shareholders Relationship Between the Company and its Shareholders A company is a legal person distinct from its shareholders. Although shareholders may serve as directors, maintaining a clear separation between ownership and management allows the company to appoint qualified professionals to handle its day-to-day operations. However, external managers sometimes take advantage of their positions, making self-serving decisions
or even misusing company funds. Sharehold - ers are not only entitled to appoint and dismiss management members but also to control how the company is managed and pursue claims against directors who cause harm to the com - pany through mismanagement(see 4.8 Conse- quences and Enforcement of Breach of Direc- tors’ Duties ). Shareholders also have a duty of loyalty and co-operation with the company, meaning that they should not act against the company’s interests. The CGS chapter regarding relations between the company and its shareholders sets out the guiding principle that the company’s manage - ment should consider the interests of sharehold - ers when making decisions. Rules and Requirements of the Relationship The relationship between the company and its shareholders is complex and defined by a set of rules and agreements that regulate the rights and duties of the shareholders, as well as their liability towards the company and third parties. The shareholders’ liability is limited to the value of the share they have subscribed in the compa - ny’s share capital, meaning that the creditors of the company cannot pursue the personal assets of the shareholders. The main obligations of a shareholder set out in the CSC are paying the initial contribution and participating in the losses of the company. Core rights The core rights of shareholders are: • to participate in the distribution of profits; • to participate in company resolutions, which includes the right to vote at the general meet - ing;
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