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22 March 2006
The Portuguese government is in the final stages of approving a number of amendments to the Portuguese Companies Code, which has not been significantly revised since it was enacted in 1986. The proposed amendments introduce a number of changes to its regulatory framework. Among other areas, these changes will affect mergers, restructuring, spin-offs and the acquisition of equity in certain types of company.
The amendments abolish mandatory notary deeds for mergers that do not involve a transfer of real estate; the approval of the shareholders of the companies involved and the registration of the merger with the companies registrar will suffice. The independent auditor's report on the conditions of the merger may also be waived if the shareholders of the companies involved pass a unanimous resolution to that effect. Mergers with wholly owned subsidiaries will also become simpler. As such mergers do not require a shareholders' resolution, the procedure may be completed by the administration of the acquiring company. A further change reduces the compulsory waiting period before the registration of this type of merger from 60 to 30 days.
The revised code is expected to reduce the interference of creditors in merger procedures. The creditors of a company may oppose a merger in court only if they have previously submitted a formal (and unsuccessful) claim to the company.
As in the case of mergers, the mandatory notary deed is no longer a compulsory part of a corporate restructuring process involving a spin-off, except in cases where real estate is transferred. The transfer of equity in limited liability companies is also significantly simpler under the new rules. The requirement to execute the transfer of capital quotas before a notary public has been removed; the new provisions require only that the transfer be set out in written form.
The new framework aims to reduce the bureaucracy associated with the disclosure of company information to the public by abolishing the requirement to publish notices relating to mergers in the Official Journal and local newspapers. Such notices will instead be posted on a government website at a fraction of the cost. The changes also abolish the requirement to publish the complete accounts of listed companies in the Official Journal.
The amendments to the code take into account the European Court of Justice's rulings on the state ownership of shares, in particular the issues surrounding state exemptions from voting caps and the ownership of golden shares, which allow governments to maintain control over privatized companies. Both factors have long been regarded as potential obstacles to takeover bids in strategic Portuguese companies, particularly in the energy, telecommunications and transport sectors. The amendments require the removal from companies' articles of association of clauses providing for state exemptions from voting caps. This reduction of state intervention and control is expected to benefit entities wishing to invest in Portugal's key markets.
For further information on this topic please contact João Caldeira or Miguel Koch Rua at Rui Pena, Arnaut & Associados - Sociedade de Advogados by telephone (+351 21 382 8150) or by fax (+351 21 382 8155) or by email (email@example.com or firstname.lastname@example.org).
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Miguel Koch Rua