[ESTABLISHING A BUSINESS ENTITY IN PORTUGAL] 381
company. In effect, quota-holders may defer the payment of their contributions until the end of the first financial year or until another date to be set forth in the respective bylaws, but no longer than 5 years after incorporation. The minimum value attributed to a quota is EUR 1,00. As a general rule, a quota can only be transferred by private or public deed under the company’s express consent or under court order, unless the prospective transferee is another quota-holder, transferor's spouse or an ascending/descending relative. This legal regime can be differently regulated in the bylaws. II.4. The Single-Member Private Limited Companies (SMLTD) As mentioned, LTD companies may be incorporated by a single partner, whether an individual or another company (“ Sociedade Unipessoal por Quotas ”), who is the holder of the entire quota capital. Some legal limitations are set forth: (i) an individual can only be partner of a unique SMLTD (i.e., cannot hold another company of this kind), and (ii) an LTD cannot have as sole partner an SMLTD. This type of company may be incorporated as such since the beginning or may result from the concentration of all the quotas of a regular LTD in a single quota-holder. This does not preclude the possibility of a SMLTD being converted into a regular LTD if a new partner subscribes the company’s capital. The sole quota-holder may appoint other people as managers or manage the company himself/itself. Any agreement between the sole quota- holder and the company shall aim and serve the implementation of the company’s scope and must be executed in written form.
Otherwise, such agreements will be deemed null and void, and the sole quota-holder may be unlimitedly liable for them. In the event of the company's bankruptcy, and provided that the sole quota-holder has complied with the above-mentioned rules, his/her personal assets will not be liable for the payment of the company’s debts. In the remaining aspects, the rules applicable to the regular LTD also apply to this type of company, apart from those intended to a plurality of partners (e.g., general meeting resolutions). II.5. Holding Companies The current legal framework for holding companies is set forth in Decree-Law no. 495/88, of December 30, 1988, as amended. A holding company must be organized either as a PLC (“ S.A. ”) or as an LTD (“ Lda .”) and its corporate name shall include the reference “ Sociedade Gestora de Participações Sociais ” or “ SGPS ”. The sole corporate purpose legally permitted for holding companies is to own and manage capital stock (shares or quotas) of other companies as an indirect form of carrying out business activities. Generally, the holding company is required to hold a minimum of 10% of the capital stock (with voting rights) of its subsidiaries and must keep such participation for at least one year. However, an SGPS may invest in smaller holdings (less than 10% of the voting rights): • up to an amount not exceeding 30% of the investments made in larger holdings; • when each participation’s purchasing value is at least EUR 5.000,00; • when the purchase of the participations results from the target company’s merger or demerger; and
ILN Corporate Group – Establishing a Business Entity Series
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