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Business structure

The principal forms of commercial enterprise in Portugal are: Public Limited Company (Sociedade Anonima, or S.A.), Quota Company (Sociedade por Quotas, or Lda.) and branch of a foreign company.
Other forms include partnerships and cooperatives.

Companies
The two most common forms of companies are (i) Quota Company (Lda.) or (ii) S.A. company. In both cases the liability of the shareholders is limited. The minimum share capital amount is € 5 000 for an Lda. and € 50 000 for a S.A. company. At incorporation a S.A. company must have a minimum of 5 shareholders, while a Lda. can be incorporated with only 2 shareholders or even with a single shareholder (in this case the company will be designated as "Sociedade Unipessoal"). A S.A. company can have its shares quoted in an organised Stock Exchange Market.

Companies incorporated in Portugal have to comply with extensive filing and legal requirements, including the following:

• Accounts must be prepared in accordance with the Portuguese Chart of Accounts. In certain specified cases (Financial Institutions and Consolidated Accounts of quoted companies) the adoption of International Accounting Standards is required. All S.A. companies must have their accounts audited by a Statutory Auditor. Quota companies that do not exceed specified limits (concerning the turnover, assets and employees) are exempt from this audit requirement;

 

• A general shareholders meeting must be held at least once a year, to approve the accounts prepared by the management and the distribution of profits;

• By the end of June, information regarding the previous financial year, such as the annual accounts and other elements, must be filed to the Tax Authorities and to the Commercial Register Entity.

Place of business or branch Partnerships Taxation Corporation tax

 

Directors
In opposite to some countries the Portuguese law does not require all members of management or the board of directors to be independent. However, under the new "Corporate Governance Code", beginning January 2009, a listed company will be required to disclose in its corporate governance annual report whether its management includes an adequate number of independent members corresponding to at least one-fourth of the entire board. Moreover, Portuguese law does provide that the majority of the members of the audit committee must be independent according to the criteria established in the Portuguese Companies Code, that all members of the audit committee fulfil the legal requirements concerning incompatibilities and expertise and that at least one of the independent members satisfy legal requirements concerning expertise in auditing or accounting.

These principles are designed to strengthen the supervision of the audit function, to avoid conflicts of interest and to establish procedures and standards for related party transactions. Members of the audit committee will be deemed independent if they are neither associated with any specific interest groups neither in the company nor under any influence that might affect the neutrality of their analysis or decisions. In particular, Portuguese law will not deem independent any holder, or any person acting on behalf or for the account of, a holder of a qualifying holding equal or higher than 2% of the company's share capital, nor anyone being re-elected for more than two terms whether subsequent or not. A typical board of directors for a large listed Portuguese company is composed by a Chairman, a CEO, Executive board members and Non-executive board members.

 

OLEKOS – sale of residential and commercial property in Portugal.