PORTUGAL Law and Practice Contributed by: Marta Pontes, Hélder Frias and José António Reymão Nogueira, Uría Menéndez
Pledge Over Quotas Pledges over quotas (the shares of limited liability companies by quotas ( sociedades por quotas )) must be registered with the commer- cial registry office. This can be fully executed online at any given moment, for instance, by a lawyer on behalf of the company whose quotas are being pledged. The applicant of this regis- try must attach the private document or deed evidencing the creation of the pledge. Without prejudice to any updates or amendments, there are no filings or procedures required for the reg- istry of pledges over quotas with the commercial registry office to remain perfected over time. 5.4 Restrictions on Upstream Security In acquisition finance transactions, the major restriction on the provision of upstream secu- rities relates to the financial assistance rule, as explained in 5.5 Financial Assistance . Fur- thermore, the justifiable corporate benefit cri- teria must also be assessed, especially when the company which provides the security has minority shareholders or when such security is provided to cover third-party liabilities. 5.5 Financial Assistance Limited liability companies by shares cannot grant loans or by any other means grant funding or security to a third party to acquire or by any other means subscribe to its own shares (Article 322 of the Portuguese Companies Code, which implements Article 23 of Directive 77/91/EEC of 13 December 1976, as amended). Addition- ally, limited liability companies by shares can- not grant financial assistance to third parties to acquire the shares of a company within the same group of companies. Any actions that fall within the restrictions on financial assistance must be deemed null and void. These restrictions aim to: • protect the company’s creditors;
try office for the purpose of obtaining definitive registration. Without prejudice to any updates or amend- ments, there are no filings or procedures required to register mortgages over real estate property with the land registry office to remain perfected over time. However, even though mortgages secure inter- est resulting from the loan, under Portuguese law, mortgages cannot cover interest beyond three years. This mandatory rule does not pre- vent the parties from registering a new mortgage in relation to outstanding interest. Pledge Over Shares Pledges over shares of limited liability company by shares ( sociedades anónimas ) and financial collateral arrangements do not require any reg- istry or procedure with the commercial registry office to perfect security interests. However, to be valid and enforceable, pledges over shares represented by certificates must be: • recorded on the share certificate by means of a declaration stating the number of shares pledged and in favour of whom they are pledged; and • registered in the issuing company’s share registry book. However, shares represented by book entries must be registered in the securities account, which any of the following can hold: • a financial intermediary in a centralised sys- tem; • a financial intermediary appointed by the issuer; or • the issuer itself.
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