The Supreme Court was recently asked to decide whether a company may demand that another company with a similar name forfeit the right to use the name, even if such use has been accepted for a number of years. The Court of Appeals had found that the rights relating to a company name are analogous to trademark rights and had applied the same time limit for objections on this basis.
The Companies Code provides that a private limited company is not bound by the signature of only one of its directors if its articles of association provide that the signatures of two directors are required to bind it, unless the company ratifies the action. However, a Supreme Court judgment has cast doubt on the safety of legal transactions by reversing an established view of directors' responsibility.
The signature on a promissory note of a partner in the capacity of manager (where such capacity is not stated in the Commercial Register) is not binding on the company - despite the production of minutes attesting to the fact that the partner was entrusted with the management of the company - if such minutes were not signed by another partner whose managerial capacity is recorded in the register.
An amendment to the rules governing the Court of Auditors extends the scope of the court's financial supervision to include undertakings which hold a concession for public works and services and for the management of undertakings, state-owned companies and semi-public companies.
Significant changes to the Portuguese Companies Act have streamlined the procedure for amending company bylaws by doing away with the requirement for a notarial deed in many cases. The new administrative requirements make it easier for companies to increase or reduce their share capital.
A new system of online incorporation offers an immediate, cheap and convenient way to create and register a company. Even if the applicant chooses not to use one of the pre-approved templates for the articles of association, the process will take no more than two business days.
A recent Supreme Court decision examined the effect of Article 409(2) of the Companies Code, which sets out the principle that, in all actions performed by a company's directors which fall outside the scope of the company's activity, the companys interests take priority over those of third parties.
The Portuguese government has approved the first major revision of the Portuguese Companies Code since the legislation came into force 20 years ago. Simplified administrative procedures and revised management and supervisory structures are expected to raise standards of corporate governance, increase the competitiveness of Portuguese companies and attract foreign investors.
Debate on the topic of corporate governance has tended to focus on companies which are open to public investment. Particular attention has been paid to mechanisms for the supervision and control of companies' management teams. However, these issues, their relationship to the efficiency of a company's organizational structures and their impact on its commercial activity are also of interest to non-listed companies.
The government has approved new rules on the corporate governance of state-owned companies, an indication of the increasing focus on the area in Portugal. The measures, aimed at reducing public debt and more closely regulating the activities of company directors, are intended to set an example for all companies.
The Portuguese government has approved measures to streamline the process of setting up a company, eliminating bureaucratic procedures with no added value. New legislation promising "a company in one hour" has speeded up the incorporation process, but a limited choice of standard-form articles of association often fails to reflect the specific needs of new companies.
A new decree-law implements the EU Late Payment Directive in Portugal. The most significant change introduced by the decree-law concerns the recovery procedure for unchallenged debts: although not required to do so by the directive, the Portuguese government has created an expedited procedure for commercial debts, irrespective of their amount.
The Portuguese Supreme Court was recently called to decide on the issue of the burden of proof with regard to corporate guarantees. The decision highlights the controversial issue of whether a company has a generic capacity, or rather whether its legal capacity is limited to its immediate profitable purpose.
Including: Types of Company; Incorporation; Limited Liability Companies v Joint Stock Companies; Shareholders and Capital; Corporate Bodies; Other Forms of Business; Commercial Contracts.
Under Article 35 of the Companies Code, companies which lose a substantial proportion of their shareholders' equity and fail to recover it within a specified timeframe will face winding up. However, struggling companies have been given some time to adapt, as the effects of this provision will not be felt until 2005.