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Business Law > PART 4 (CHAPTER 3) > Flashcards

PART 4 (CHAPTER 3) Flashcards

1
Q

Number of partners in private limited companies/quota companies

A

a minimum of 2 (although the company can be incorporated with only 1 partner in the case of a single partner quota company)

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2
Q

Company name in quota companies

A

shall include the name or business name of one, some or all partners and shall end with “Limitada” or the abbreviation Lda

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3
Q

Capital and initial contributions

A
  • No minimum capital requirements; it is freely established by the partners in
    the articles of association
  • initial contributions consisting of services are not permitted
  • partners shall only be obligated to pay additional capital contributions if stated in articles of association
  • capital is divided into quotas (over 1 euro)
  • quotas are nominative
  • partners are jointly liable
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4
Q

Options for Initial Capital Contributions (money or assets put into the company at the start)

A
  • they can be deferred (delayed) until a specific date
  • they can depend on specific events happening
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5
Q

Time Limit for Initial Contributions

A

Regardless of when they are deferred, partners must make their initial capital contributions by:
- 5 years after the articles of association are signed
- 5 years after a decision to increase capital is made
- or when half of the company’s planned duration has passed, whichever comes first

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6
Q

Liability of partners

A
  • liability of partners is limited to the share capital
  • each partner is responsible for the full subscription of his quota, in addition, partners are also responsible for the other partners unsubscribed capital (join responsability)
  • partners are not liable for the debts of the company
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7
Q

Other Obligations of the Partners

A
  1. Obligation to make additional contributions
  2. Obligation to make supplementary contributions
  3. Partners loan agreements
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8
Q

Obligation to make additional contributions

A
  • additional contributions that partners may be required to make beyond the initial capital contributions
  • can be provision of services, construction, work, a loan
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9
Q

Obligation to make supplementary contributions

A
  • specific for quota companies
  • contributions shall always be cash (although they will not become part of the company’s capital)
  • interest will not be applied
  • the AOA must provide:
    > total amount of supplementary contributions
    > partners who are obligated to make these contributions
    > criteria to allocate these supplementary contributions among the partners obligated to make them
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10
Q

Partners can recover supplementary contributions only if:

A
  • the recovery does not reduce company’s liquidity below sum of the capital and statutory reserves
  • the partner has fully paid their initial quota
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11
Q

Partners loan agreements

A

contract where partner lends money/fungible thing to the company, the company is obligated to repay in the same quality and type

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12
Q

Types of loan agreements

A

Loan contracts
Deferral agreements

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13
Q

Loan contracts

A

partner lends money or fungible items to the company

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14
Q

Deferral agreement

A

a partner agrees to extend the maturity date of their existing loans to the company, provided that the loan has “permanent nature”

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15
Q

Permanent nature

A

For a loan to be considered of permanent nature the following is relevant:
- if the reimbursement period is specified to be more than one year, either at the time the loan is made or later on
- if the partner does not request reimbursement for a period of one year from the loan’s establishment date

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16
Q

Partner’s right to information

A
  • managers are obligated to provide partners with truthful information on the management of the company, and make the respective accounts, books, nad documents
  • the access to documents or the inspection of the company’s assets may be refused by the manager if the manager suspects that a partner is using the information for purposes other than htose of the company
17
Q

Statutory Reserves

A

mandatory reserves that a company must maintain to ensure financial stability and cover potential losses.

18
Q

Formation and requirements of statutory reserves

A
  • a minimum of 5% of the company’s annual profits must be allocated to the statutory reserve
  • the allocation continues until the reserve equals 20% of the company’s capital
  • the statutory reserve must not be less than 2500 euros
19
Q

Right to share in the profits of the financial year

A
  • the company must distribute at least 50% of the annual distributable profits unless provided for in the AOA, or there is a resolution not to distribute approved by a majority representing 3/4 of the capital
  • profits must be paid within 30 days from the resolution that approved distribution
20
Q

Management and Supervision

A
  • quota companies represented by one or more managers with full legal capacity
  • managers are elected by a resolution adopted by the partners
  • unless duration is stated in AOA, the function of the managers shall continue for as long as they do not resign or are fired
21
Q

Non compete obligation

A
  • managers are not permitted to exercise an activity which is in competition with the company
22
Q

A statutory auditor must be designated if two of the following three limits are exceeded for 2 consecutive years:

A
  • total financial statement: 1500 euros
  • net sales and other profits: 3000 euros
  • avergae number of employees during the financial years: 50
23
Q

Partners Resolutions

A

partners may adopt resolutions by means of a written vote or through the general meeting

24
Q

Acts that require resolutions by partners:

A
  • Calling in and recovering supplementary contributions
  • dismissal of partners/managers and members of supervisory committee
  • approval of annual report and accounts for the financial year
  • amendments to the articles of association
  • ammortisation of quotas
25
Q

Partners General Meetings

A

the provisions regarding the general meetings of share companies shall apply in all matters that are not specially regulated for quota companies

26
Q

Convening the general meeting

A
  • responsibility of any of the managers
  • rules on partner general meetings for share companies shall apply to quota companies
  • the meeting is convened by means of a registered letter, sent at least 15 days in advance
27
Q

Majorities

A
  • decisions are passed with the majority of the votes cast by the attending partners
  • decisions like amendments to the AOA, transformations, mergers, or dissolutions of the company require votes corresponding to 3/4 of the share capital
28
Q

Minutes

A

must be signed by all partners that attend the meeting

29
Q

Single Partner Quota Companies

A

private limited companies/quota companies with only one partner

30
Q

Legal limits in relation to ownership (Single Partner Quota Companies)

A
  • one individual can only be a partner
  • a private limited company cannot have as its single partner a single partner private limited company
  • a breach of these rules may result in the dissolution of the company
30
Q

legal framework of single partner quota company

A

governed by rules regulating quota companies, with the exception of those that imply a plurality of partners

30
Q

Company name (Single Partner Quota Companies)

A
  • must include “Sociedade Unipessoal” or the word “Unipessoal” and end with “Limitada”/”Lda”
30
Q

Conversion into a quota company

A

a single partner quota company can be converted into a (plural) quota company by:
- division and transferring of a quota
- increase in the share capital by means of an initial contribution of a new partner
and removing the expression “sociedade unipessoal” or “unipessoal” in the name

31
Q

Partner’s decisions (single partner private limited company)

A
  • sole partner shall exercise the powers conferred upon general meetings, and may appoint managers
  • decisions by the partner shall have the same nature as resolutions adopted at a general meeting

Business Law (17 decks)

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