Investor's Guide – How to set up a company - Incorporatrion and Registration of a Company - Simplified set-up

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Investor's Guide

 

 

How to set up a company  

 

2.1 Types of companies

 

2. Incorporation of a companyIf the investment in Portugal is to be made through the incorporation of a Portuguese company, the first step to be taken is the decision on the type of company that shall be implemented. 

 

The incorporation of companies is mostly ruled by the Commercial Companies’ Code (CC), approved by Decree-Law no. 262/86, of September 2nd, and subsequently amended from time to time. There is also a set of specific legislation regulating the legal status of specific types of business entities (e.g. regime of holding companies).

 

Although any of the types mentioned above may be used for an investment, the most commonly used structures of the above mentioned are (i) Public Limited Liability Company, (ii) Private Limited Liability Company and (iii) Sole Shareholder Private Limited Liability Company, and therefore are the types referred to below. A brief comparison between these types of companies is set out below:

 

Public Limited Liability Company

(Sociedade Anónima)

Private Limited Liability Company

(Sociedade

por Quotas)

Sole Shareholder Private Limited Liability Company

(Sociedade Unipessoal

por Quotas)

Incorporation and Registration Costs

*not including legal fees but including the registration costs of the appointment of the members of the corporate bodies

Approx. € 700

Approx. € 700

Approx. € 700

Duration of Incorporation Process and Registration

Approx. 2 weeks

Approx. 2 weeks

Approx. 2 weeks

Minimum Number of Shareholders

Five (or one, if incorporated by a corporate entity)

Two

One

Formal Requirements
of Incorporation

Written deed of incorporation (signatures must be certified by a notary or lawyer in the presence of the signatories) and registration with the Commercial Register.

Additional formalities may apply if the shareholders perform contributions in kind

Written deed of incorporation (signatures must be certified by a notary or lawyer in the presence of the signatories) and registration with the Commercial Register.

Additional formalities may apply if the shareholders perform contributions in kind

Written deed of incorporation (signatures must be certified by a notary or lawyer in the presence of the signatories) and registration with the Commercial Register.

Additional formalities may apply if the shareholders perform contributions in kind

Minimum Registered Share Capital and Capital Contribution
at Incorporation

€ 50,000.

70% of contributions in cash may be postponed for a 5 years’ period. The issuance premium (if existent) may not be postponed

Two Euros.

Contributions in cash may be postponed for a 5 years’ period. 

The shareholders may declare in the incorporation document that the share capital will be deposited in a bank account opened in the name of the new company until the end of the first fiscal year (this is not considered as deferment of payment and, consequently, is not subject to commercial registration)

One Euro.

50% of contributions in cash may be postponed for a 5 years’ period. 

The sole shareholder may declare in the incorporation document that the share capital will be deposited in a bank account opened in the name of the new company until the end of the first fiscal year (this is not considered as deferment of payment and, consequently, is not subject to commercial registration)

Management and Auditing

Alternative structures: 

(i) Board of Directors (or Sole Director, if share capital does not exceed € 200,000.) + Audit Board (or Sole Auditor); 

(ii) Board of Directors (including an Audit Commission) + Auditor; or  

(iii) Executive Board of Directors (or sole director, if share capital does not exceed € 200,000) + General and Supervisory Board + Auditor. 

Companies incorporated according to alternative (i) must have an Audit Board and appoint an auditor, if two of the following limits are exceeded (for two consecutive years): 

· Total balance sheet: EUR 100,000,000;

· Net turnover: € 150,000,000;

· Average number of employees: 150.

Management: one or more directors. 

Auditor is not mandatory, However,  companies which do not have a Statutory Audit Board or a Single Auditor must appoint an Auditor to audit the company’s accounts when two of the following limits are exceeded (for two consecutive years): 

·     Total balance sheet: EUR 1,500,000; 

·     Net turnover: EUR 3,000,000; 

·     Average number of employees: 50.

Management: one or more directors. 

Auditor is not mandatory. However,  companies which do not have a Statutory Audit Board or a Single Auditor must appoint an Auditor to audit the company’s accounts when two of the following limits are exceeded (for two consecutive years): 

·    Total balance sheet: EUR 1,500,000; 

·    Net turnover: EUR 3,000,000; 

·    Average number of employees: 50.

Minority Rights (Matters subject to Qualified Majority)

2/3 of the votes cast are legally required for certain special resolution matters (e.g. amendments to the articles of association, merger, spin-off, conversion, dissolution)

A majority of 3/4 of the share capital is legally required for certain special resolution matters (e.g. amendments to the articles of association, merger, spin-off, conversion, dissolution)

N/A

Shareholders’ Liability

Limited to the capital subscribed (although additional liabilities may apply to the shareholder in case it is a fully controlling company)

Limited to capital subscribed, but shareholders are jointly and severally liable for all contributions foreseen in by-laws (and additional liabilities may apply to the shareholder in case it is a fully controlling company)

Limited to capital subscribed, but shareholders are jointly and severally liable for all contributions foreseen in by-laws (and additional liabilities may apply to the sole shareholder in case it is a company)

 

 

 

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