property legal status, as detailed above, and to ii.) analyze the investment vehicle’s commercial, financial, tax, corporate and legal status, ensuring the legal acquisition of equity stakes as well as that no undesired obligations or rights are dragged along with the entity to be used as vehicle. IV.2.2. SHARE DEAL This process involves the acquisition of equity stakes in investment vehicles, such as commercial companies (usually joint- stock and limited liability companies) and undertakings for collective investment of a contractual nature or of a corporate nature. IV.2.3. SALES GUARANTEES In special purpose vehicles acquisitions, it is common practice for the seller to accept liability for a specific length of time for any infringement of its representations and warranties on the object of the sale and underlying assets. V. TYPES OF SPECIAL PURPOSE VEHICLES It is standard practice in Portugal to make real estate investments through one of these three vehicles which, in other words, represent the process of a special purpose vehicle acquisition deal: (i) commercial companies, (ii) real estate investment funds and, (iii) real estate investment companies. V.1. COMMERCIAL COMPANIES Joint-stock companies as well as limited liability companies are on the Portuguese frontline, representing most of the existing national commercial entities. V.1.1. LIMITED LIABILITY COMPANIES BY SHARES (PLC) In a PLC, share capital is divided up into shares, with a minimum initial amount of €50.000,00, and must, only at the moment

of its incorporation, have a minimum of five shareholders, unless it is incorporated by another company as its sole shareholder. Also, only two founding shareholders are required when the State, or a State holding company, owns more than 50% of the capital stock. After the incorporation, restrictions to the minimum number of shareholders no longer apply. In its most common composition, the company is governed by a General Meeting Board, the Board of Directors, and the Sole Supervisor, who should be a Statutory Auditor. In most PLC companies, the share transfer agreements require no special formalities, and its register is executed directly at the company itself. V.1.2. LIMITED LIABILITY COMPANIES BY QUOTAS (LTD) Usually representing the small and medium sized companies, the LTD companies are the most found type of companies in Portugal due to the inexistence of a minimal initial share capital requirement and a simpler functioning and structure, as well as the bigger control given to the founder partners. Its share capital is divided up into quotas, with a minimum initial amount per quota of €1. The limited liability company can have or be incorporated by a sole quota holder (in which case the company must bear the corporate expression “sole quota holder limited liability company by quotas”), or by any other number of quota holders. Differently from PLC companies, the information about the quota holders’

ILN Real Estate Group – Buying and Selling Real Estate Series

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