If you have the project to undertake in Portugal, then one of the key steps in starting a business is the legal choice of the entity to be formed. It is important to know all the types of companies that can be incorporated in Portugal, in order to choose the best option to ensure the success of your business. Indeed, even if the legal forms are similar to what can be found in other European countries, Portugal has its peculiarities which make a bad choice of status can lead to many setbacks.
You must always consider the strengths of the future company, the assets to be allocated, the type of responsibility, and the required capital investment. Last but not least, you must decide if it is an adventure that you intend to conduct alone or with other partners. What are the different legal forms for companies and businesses in Portugal? What status to take if the activity is for an individual or for a group? Lisbob, the expatriate assistant in Portugal, tells you everything in this comprehensive guide to all legal forms of business and society, individual or collective in Portugal in 2020.
In this way, to help you make this decision, it follows a list of different legal forms of companies, divided into two categories - individual and collective.
All types of companies and businesses in Portugal, individual and collective
Individual Companies
Empresario em Nome individual - Individual entrepreneur (freelancer)
- Holder: one person.
- Sector: commercial, industrial, services or agricultural.
- Denomination: always contains the complete or abbreviated civil name of the contractor.
One can add a nickname for which the businessman is known, and which can still contain an allusive expression to the company.
If the auto-entrepreneur has obtained the company by inheritance, can add to the name "successor of" or "heir of".
Entrepreneurs engaged in a profitable and non-commercial economic activity may have in the name of their company an expression referring to the industry (as described in Legislative Decree No. 129/98 of 13 May).
- Capital: there is no minimum amount for share capital
Heritage: the personal property and assets of the company are united. In case of debt, fine or debt related to your professional activity then your personal property can be seized.
- Liability: unlimited - the entrepreneur is responsible for all debts contracted by the company with all assets constituting his personal or commercial assets.
- Registration: Lisbob can do it for you.
- Advantages :
• Total control of the company;
• Possibility of reducing tax costs;
• Simple constitution and dissolution;
• No minimum social capital.
- Disadvantages:
• the risk associated with the merger of the company's assets with the owner's personal assets;
• Difficulty obtaining credit for funds.
Lisbob can register your freelancer activity for you. Check out our services page.
Sociedade Unipessoal - Single-member company
- Holder: consists of a single member.
- Denomination: contains the word "Unipessoal" or the expression "Sociedade Unipessoal", followed by "Limitada" or the corresponding abbreviation "Lda".
- Capital: minimum value of € 1, held by a natural or legal person, in cash or in cash.
- Liability: limited to the amount of the share capital.
- Creation of the company: Bob does it for you.
- Advantages :
• Total control of the company;
• The personal property of the owner does not meet the debts contracted by the company, because they are separated from the assets of the company;
• Minimum capital reduced.
- Disadvantages:
• More complexity in the formation of the company (Bob can accompany you);
• No tax benefit.
Estabelecimento Individual de Responsabilidade Limitada (EIRL) - Individual limited liability institution
- Holder: one person.
- Sector: commercial.
- Denomination: full or abbreviated legal name of the business owner, may add a reference to the industry, the "Individual creation of limited liability" expression, or its abbreviation "EIRL" (paragraph 3 of Article 2 Decree No. 248/86 and 1 and 2 of Article 40 of Legislative Decree No. 129/98 of 13 May).
- Capital: minimum capital of € 5,000, of which one third is required to meet in monetary form (€ 3333.33) and the physical assets or rights may make the rest of the minimum capital indicated (1 and 3 of Article 3 DL 248/86).
- Inheritance: the assets of the company and the assets of the entrepreneur are independent of each other. However, there are cases in which assets are conjugated (description below).
- Liability: the debts resulting from EIRL respond well that pertaining to the company, with one exception - in case of bankruptcy of the holder of a cause related to the activity of the company, the owner of the company responds to all his personal and corporate property by debts (provided that this proves that no complete separation of the goods has taken place).
- Creation of the company: Bob can help you in these steps.
You have to check all the kind of companies existing in order to choose the right form
Collective Companies
Sociedade por Quotas - Joint stock company
- Members: minimum two partners. Industrial partners are not allowed.
- Denomination: The company must end with the word "Limitada" or its abbreviation "Lda". The first part of the name may be chosen from the following options: (a) the name of the full or abbreviated name of one, some or all of the members; (b) expression referring to the industry; (c) combination of elements (a) and (b).
- Capital: minimum of 5,000 euros divided by the minimum value of the shares of 100 euros.
- Assets: the assets of the company are independent of the personal assets of the partners.
- Responsibility: limited to the share capital, it is this capital that meets the debts of the company. Partners may have additions to their liability if the stipulated contract so indicates.
- Creation of the company: Bob can accompany you in his steps.
- Advantages :
• Separation of the assets of the company with the personal assets of the partners, who do not meet the debts of the company;
• Diversification of experiences and knowledge of different partners;
• Easy organization of funds and investments.
- Disadvantages:
• There is no absolute control of the business by a contractor;
• A member may be called by the creditors to account for the entire capital;
• Greater complexity in the constitution and dissolution of the company;
• Members cannot charge losses to your business on your IRS;
• Existence of a minimum social capital.
Sociedade Anónima - Public Limited Company
- Members: at least five single or collective members (also called shareholders), or a single member, provided that a company is incorporated. Industrial partners are not allowed.
- Denomination: always ends with the expression "Sociedade Anónima" or its abbreviation "SA". The remainder of the name may be selected from the following options: (a) the name of the full or abbreviated name of one, some or all of the members; (b) expression referring to the industry; (c) combination of elements (a) and (b).
- Capital: minimum 50,000 euros, divided into units of equal nominal value with a minimum of 1 cent.
- Shares: may be represented in the form of a security - paper documents or in the form of a book entry - represented by an entry in the buyer's account with the registering entity.
There are registered shares of which the holders are known, or bearer shares, in which the issuer does not know the identity of the holders.
- Responsibility: each partner is responsible for the value of the actions to which he subscribes.
- Creation of the company: Bob can accompany you in all his steps.
- Advantages :
• Ease of transmission of corporate bonds;
• Each member is only responsible for his contributions, not responding jointly with his members to the debts of the company;
• Easy organization of funds and investments.
- Disadvantages:
• a large dilution of the control of the company, from the smallest to the largest shareholder;
• The formation and dissolution of the company is complex and costly;
• If the company is listed on a capital market, it is subject to strict supervision.
Opening a company in Portugal can be quite challenging, but a good preparation is the key for a successful project
Sociedade em Nome Colectivo - Partnership
- Members: a minimum of two, being authorized industrial partners provided that, in the statutes, their contribution to the industry is valued.
- Denomination: consisting of the full or abbreviated name of the nickname or any company, part or any of the partners, followed by "e Companhia" (& Company), the abbreviation of "Cia" or any other word or words involving there are more partners.
- Capital: there is no mandatory minimum amount.
- Liability: unlimited, subsidiary and united, since the members respond not only to their shares, but also to the registrations of all the other members.
Entrepreneurs also seize their personal assets if there is a deficiency in the assets of the business.
Industrial partners have the same responsibilities as other partners. However, internally they only respond for social losses if this is stipulated in the contract.
- Responsibility: the assets of the members and the assets of the company are merged.
- Creation of the company: by the traditional method.
One of the main features of this type of society works in conjunction with advantage and disadvantage - joint and several liability. That is to say that each partner not only meets his debts but also the debts of all the other partners.
Sociedade em Comandita - Limited Partnership
- Partners: it is a mixed company, because there are two types of partners:
General Partner - contribute to goods or services
Sponsor Partner - bring in capital, take over the management and effective management of the company.
In addition to two different types of partners, two forms of partnership are possible:
Simple - the minimum number of members in a company of this type is two;
Shares - the shares of the limited partners are represented by shares. In a limited partnership of this type, the minimum number of partners is six to five, and a general.
- Denomination: full or abbreviated name or the commercial name of at least one of the unlimited liability partners (general partner), followed by "in comandita" or "& comandita" for companies of the simple type, and in the case of public limited companies add "In Free shares or shares. "
- Capital: mandatory minimum of € 50,000
- Responsibility: Different for the different types of members:
Sponsor Partner - have limited responsibilities and are only responsible for their entries;
General Partner - faced with the company's debts, this type of partner reacts in an unlimited and joint way (each partner responds not only to his debts but also to the debts of all the other partners, with their personal belongings if necessary).
- Patrimony: in the case of limited partners, personal wealth is totally separate from the assets of the company. The limited partners, on the other hand, own the assets of the company merged with their personal property.
- Creation of the company: Bob accompanies you throughout the process.
Cooperativa - Cooperative
- Objective: to satisfy the interests of its members - common economic, social and cultural needs, aspirations. These gains will always appear in the personal assets of the cooperators and never in the association. That is, even if there is a positive income balance, it is distributed by its members based on the investment made by each in repayment.
A cooperative is a non-profit collective association of free constitution, variable capital and composition.
It is divided into two different degrees:
First degree - Cooperators are natural or legal persons;
Higher rank - associations grouped into unions, federations and confederations.
- Cooperators: In the case of a first degree cooperative, the minimum number of members is five. In higher level cooperatives, the minimum is two members.
- Capital: minimum € 2,500.
- Responsibility: members can acquire different status within cooperatives - with limited liability for some and unlimited for others. Usually, the responsibility of each cooperator is limited to the amount of capital subscribed.
- Creation of the company: by public act and private instrument.
Remember that for all your paperwork, Lisbob and his partners can help you and even do it for you. Whether you want to work as a freelancer or start your own business, you have all the cards you need to succeed.
