[ESTABLISHING A BUSINESS ENTITY IN PORTUGAL] 374
shares issue value (in case of shares without par value) unless bylaws provide for the payment of a premium.
itself, except for the right to receive the correspondent additional number of shares in case of stock capital increase by incorporation of reserves. Finally, share capital increases, like any other amendment to the company's bylaws, shall be approved by shareholders' meeting. Nevertheless, bylaws can authorize the board of directors to decide on share capital increases in cash within certain limits. II.3. The Private Limited Liability Company (LTD) The LTD (“ Sociedade por Quotas” or “Lda .”) has traditionally been the investment vehicle used in Portugal for small business, usually of family origin. The partners are jointly and severally liable to fulfil the company's entire quota capital, but their liability extends no further than that. This type of business entity does not allow participations to be represented by shares (since capital stock is divided into quotas) and thus may not be listed on the Lisbon Stock Exchange (Euronext Lisbon, PSI- 20 or “ Bolsa de Valores de Lisboa ”). In an LTD the identity of the quota-holder is available to public knowledge since that information is subject to registration with Companies House. The private limited liability company incorporation needs only two partners, regardless of being individual or corporate. There may exist, however, limited liability companies with a sole partner (individual or a company) which are named “ Sociedade Unipessoal por Quotas ” (“SMLTD”). These companies basically have the same regime as a regular limited liability company but with certain particularities with respect to the relationship between the sole quota-holder and the company and the possible enlarged liability of the former.
Shares in a PLC are freely transferable, except where the respective bylaws set forth restrictions on its transferability. These restrictions may consist of a right of first refusal or pre-emption right in favor of the remaining shareholders and right of prior consent of them or the company. Shares may be transferred by a written agreement, or a written declaration of the owner addressed to the keeper of the PLC’s share registry (usually the company itself). The bylaws may not prohibit the transfer of shares otherwise permitted by law, being that transfer may only be restricted within the terms of the relevant legal provisions. A minimum capital stock of EUR 50.000,00 is required for the incorporation of a PLC. It can be formed either by private subscription of the entire capital stock or through call for public subscription of the shares. The share capital of a PLC must be paid up by means of contributions in cash or in non- monetary assets (contributions in kind) and the legal minimum capital must be fully subscribed. However, the capital stock does not have to be fully paid up at the time of its subscription. Indeed, only a minimum of 30% of each shares’ nominal value must be satisfied at that time. Within 5 years of the incorporation, the remaining part of capital stock must be fully paid up. As a general rule, a PLC is allowed to acquire and hold its own shares up to a maximum of 10% of its total registered share capital (in certain cases provided by law this amount may be exceeded). The voting and economic rights inherent to these shares are suspended as long as they are owned by the company
ILN Corporate Group – Establishing a Business Entity Series
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