PART 4 (CHAPTER 3) Flashcards
Number of partners in private limited companies/quota companies
a minimum of 2 (although the company can be incorporated with only 1 partner in the case of a single partner quota company)
Company name in quota companies
shall include the name or business name of one, some or all partners and shall end with “Limitada” or the abbreviation Lda
Capital and initial contributions
- 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
Options for Initial Capital Contributions (money or assets put into the company at the start)
- they can be deferred (delayed) until a specific date
- they can depend on specific events happening
Time Limit for Initial Contributions
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
Liability of partners
- 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
Other Obligations of the Partners
- Obligation to make additional contributions
- Obligation to make supplementary contributions
- Partners loan agreements
Obligation to make additional contributions
- additional contributions that partners may be required to make beyond the initial capital contributions
- can be provision of services, construction, work, a loan
Obligation to make supplementary contributions
- 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
Partners can recover supplementary contributions only if:
- the recovery does not reduce company’s liquidity below sum of the capital and statutory reserves
- the partner has fully paid their initial quota
Partners loan agreements
contract where partner lends money/fungible thing to the company, the company is obligated to repay in the same quality and type
Types of loan agreements
Loan contracts
Deferral agreements
Loan contracts
partner lends money or fungible items to the company
Deferral agreement
a partner agrees to extend the maturity date of their existing loans to the company, provided that the loan has “permanent nature”
Permanent nature
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