Assuming that “corporate law” includes all kinds of collective entities with legal personality, Portuguese law includes the following types of entities:
• In the Civil Code: associations (“associações”), foundations (“fundações”) and
civil companies (“sociedades civis”)
• In the Commercial Companies Act 1986 (“Código das Sociedades
Comerciais”): the commercial companies are those that have commercial activity
and should adopt one of the following types (all with legal personality):
i) Companies with unlimited responsibility (“sociedades em nome colectivo”).
The associates are unlimitedly responsible for all debts of the company. This
type is used for very small companies with two or three associates, with a
deep trust of each other. It is not very common. Contributions may be in
money, in kind or in industry services. Normally all associates are directors.
ii) Companies with limited responsibility (“sociedades por quotas”). The most
common type in Portugal, where the associates are responsible for the whole
amount of the share capital, but not for the debts of the company. It is
adequate for a small number of associates (even only one) and small or
medium enterprises. The amount of capital is freely agreed upon by the
associates (there is no minimum legal share capital). The shares are not
represented by titles (negotiable instruments) and are transferred through a
registered contract. Contributions may be in money, in kind or in warranty,
but not in industry services. Associates appoint one or more directors, who
may be associates or not.
iii) Companies limited by shares or stock companies (“sociedades anónimas”). A
common type used for big companies, where the shareholders (five at least)
are only responsible for the shares to which they subscribed; they are not
responsible personally for the debts of the company. The minimum share
capital is €50.000,00. The shares must be represented by negotiable
instruments (titles) or electronic register: nominal or bearer shares. Both may
be admitted to be negotiated in the stock exchange. These companies may
issue bonds. It is suitable for a company with a large number of shareholders.
Contributions may be in money or in kind, but neither in warranty nor in
industry services. See number four below.
iv) Limited partnership with a sleeping partner (“Sociedade em comandita
simples”). They have two types of associates: some with unlimited liability
similar to the companies with unlimited responsibility (“sociedades em nome
colectivo”) and others with responsibility limited to their contribution to the
capital. The shares may not be represented by negotiable instruments.
v) Limited partnership with sleeping shareholders (“sociedades em comandita por
acções”). They have two types of associates: some with unlimited liability
similar to companies with unlimited responsibility (“sociedades em nome
colectivo”) and others with responsibility limited to their contribution to the
capital (as in stock companies). The shares may be represented by negotiable
instruments (shares). These kinds of companies are not at all common.
• In the Cooperative Code 2015: cooperatives have a mutualist purpose (non-
profit) and should respect the principles of the International Cooperative
Alliance: freedom of association (“open door”), democratic management (one
man, one vote), dual quality (associate and worker or associate and client or
associate and consumer or associate and debtor), reimbursement of the results
proportional to the transactions of each member (independent of the amount of
capital), limited interest to the capital, etc.
• In other special private laws:
- European company (“sociedade anónima europeia”),
- European Cooperative company (“Sociedade cooperativa europeia”),
- Complementary Grouping of Enterprises (“Agrupamentos Complementares de
Empresas”) similar to the French “Groupement de Intérêt Economique”,
- European Economic Interest Grouping (“Agrupamento Europeu de Interesse
• In public laws: in the public sector there are several types of public Enterprises
belonging to the government, or to the regions, or to the municipalities.
2.1 Register of the company name in the National Register of Corporate Entities
(“Registo Nacional das Pessoas Colectivas”)
2.2 Signature of the incorporation agreement (by notarial deed or simple private
document) including the articles of association (“estatutos”).
2.3 Commercial register and publications (on the internet)
Citizens of a European Union Member State should present an identity card or passport unless represented by a representative with a proxy and should apply for a personal Portuguese tax payer’s number (“Número de Identificação Fiscal”).
Citizens of non-EU states should present the same documents as above and in a few sectors, also apply for a foreign investment authorization.
To appoint directors, a decision of the associates is required in a general meeting or in writing (formalized in minutes). To take that decision, an absolute majority of votes is normally necessary; in some circumstances, there are special rules.
To modify the By-laws (the articles of association) of a limited liability company (“sociedade por quotas”) a decision is necessary (taken in a general meeting or in writing, and formalized in minutes) of three quarters of the votes corresponding to the share capital or a higher number of votes required in the By-laws.
To modify the By-laws of a stock company (“sociedade anónima”) a decision is necessary (taken in a general meeting or in writing, and formalized in minutes) of two thirds of the issued votes in the general meeting or a higher number of votes required in the By-laws. If in a second convocation of the general meeting there are shareholders (present or represented) holding at least a half of the share capital, the decision may be taken by the absolute majority of the issued votes.
The appointment of a new director and the modification of the By-laws in both types of companies should be registered in the commercial register.
a) Alternatives for limited liability companies: the company is administered
and represented by one or more directors, who must be individual persons
with full legal capacity and they may be associates or not. When there are
several directors, the By-laws may regulate the functioning of the directors. If
there is no rule in the By-laws, their powers should be exercised jointly and
the decisions should be taken by the majority of the votes and the company is
obliged by the majority of the directors. The directors have the power to
perform the acts or contracts necessary or convenient to realizing the social
object (the activity foreseen in the Articles) according with the shareholders’
decisions. There is a long list of actions of the directors, which are dependent
on the decision of the associates; and the By-laws may include additional
actions to that list. The directors may delegate to one or more other persons
or directors power for certain action or some kind of actions.
b) Alternatives for stock companies: in their By-laws, these companies may
choose one of three main structures:
i) One tier structure (the traditional and most frequent): A board of directors
(“conselho de administração”) composed of a number of members fixed in
the By-laws. If the share capital does not exceed € 200.000,00 there may
be a sole director. The directors may be shareholders or not. If a legal entity
is appointed director, it should appoint a single person to exercise the
function, but remaining jointly and severally responsible for the appointed
person. The company must have either a unique supervisor (“fiscal único”),
who must be an official auditor (“revisor oficial de contas”, equivalent to the
French “commissaire aux comptes”), or a “fiscal” board (“conselho fiscal”),
always including an official auditor.In this structure the board of directors or
the sole director have full authority to manage the activities of the company
and should follow the decisions of shareholders or the interventions of the
“fiscal” board, or the official auditor only when the law or the By-laws of the
company require so. The board of directors has exclusive and full power to
represent the company.
ii) Two tier (Anglo-American) structure: a Board of directors (“conselho de
administração”), including an auditing commission (“Comissão de auditoria”)
and an official auditor (“revisor oficial de contas”).
iii) Two tier (German) structure: a board of executive directors (“conselho de
administração executivo”, equivalent to the German “Vorstand”), a general
and supervisory board (“conselho geral e de supervisão”, equivalent to the
German “Aufsichtsrat”), and an official auditor (“revisor oficial de contas”).
The board of executive directors has full authority to manage the activities
of the company and should follow the decisions of the supervisory board
when the law or the By-laws of the company require so. The board of
directors has exclusive and full power to represent the company.
In any type of commercial company, the liquidation procedure is immediately initiated when one of the following situations occurs:
a) Expiration of the delay stipulated in the By-laws;
b) Decision of the associates or shareholders (with qualified majority);
c) Full realization of the contractual object;
d) Supervenient [occurred after the formation of the company illegality of the
e) Declaration of insolvency of the company.
In several other cases, the associates or an administrative authority may also decide to initiate liquidation.
The beginning of the liquidation process should be registered in the commercial register. Normally the directors become liquidators, but in some cases a special liquidator may be appointed. The main activities of the liquidators are the following: to finish business, collect credits, sell assets, pay debts, present a report and accounts for approval, share the results (if any) among the shareholders and apply for the registration of the end of the liquidation and extinction of the company.
This information was compiled by Luis Brito Correia.