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Laws of Macau |
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PAYMENT OF CAPITAL
(Form of payment of capital participation)
1. The nominal value of capital participations, paid in money or in kind, shall be a multiple of 50 patacas.
2. If in money, its payment consists in the delivery of an amount in patacas at least equal to the nominal value of the participation; if in kind, in the transfer to the company of goods susceptible to judicial seizure, of a value at least equal to the nominal value of the participation.
3. If the capital participation consists in the transfer to the company of a credit right over a third party and it is not punctually performed by the debtor, the shareholder shall pay in money the credit, or the part not received by the company, within eight days after maturity.
4. If, for any reason, there is a negative difference between the value of the goods at the date of their payment and the value resulting from the appraisal, the shareholder is responsible for the difference, which he should pay in money, until the nominal value of his participation is reached.
(Verification of value of payment in kind)
1. The goods with which capital participations in kind are to be paid shall be identified, described and appraised by means of a report to be prepared by an auditor or a firm of auditors, which shall be attached to the act of incorporation.
2. The report shall be prepared no more than 60 days before the date of the act of incorporation and it must mention the criteria used in the appraisal.
(Moment of payment of capital participations)
1. Without prejudice to the following paragraphs, capital participations shall be fully paid at the moment of the act of incorporation.
2. The payment of money participations can be delayed in accordance with the terms set for each type of company.
3. The delivery of goods in payment of a capital participation in kind can only be delayed if the company has an interest in such delay, and only for a specified date which shall be mentioned in the act of incorporation.
4. If the delay in the payment of a capital participation in kind is for a period of time longer than one year, it shall be object of a new report, to be prepared by an auditor or by a firm of auditors; if its value is lower than the value arising from the previous appraisal, paragraph 4 of article 201 shall apply.
5. If, as a result of a legitimate act of a third party, the company is deprived of a good already delivered by a shareholder, or if its delivery, which had been delayed in accordance with paragraph 3, becomes impossible, the shareholder shall pay in money the nominal value of his participation, within eight days from the occurrence of any of such events.
(Performance of payment of capital participation)
1. The rights of a company to the payment of capital participations cannot be renounced and cannot be compensated.
2. A shareholder who does not punctually perform the participation for which he is obliged is liable, besides the capital matured, for the respective interest and for other damage to the company arising from his non-performance.
3. While the non-performance remains, a shareholder cannot exercise the rights corresponding to the part in delay, namely the right to profits.
(Rights of creditors regarding contributions)
1. The creditors of any company can:
a) exercise the rights of the company relating to matured and unpaid capital participations;
b) promote judicially the payment of the capital participations before they mature, provided that such action is necessary for the conservation of an adequate guarantee of their credits.
2. The company can oppose the request of such creditors, by paying their credits, if matured, or, if not yet matured, by providing adequate guarantees to such creditors or by paying them at the discount corresponding to the anticipation.
(Loss of half of capital)
1. If the organ of administration, through the accounts of the accounting period, verifies that the net worth of the company is lower than half of the value of the company capital, it shall propose, in accordance with the following paragraph, that the company be dissolved or that the capital be reduced, unless the shareholders, within 60 days from the resolution that arises from such proposal, pay amounts in money that replenish the assets in a measure equal to the value of the company capital.
2. Such proposal shall be presented and voted, even if it is not included in the order of the day, in the same meeting that is to discuss the accounts, or in a general meeting to be called within eight days from its judicial approval in accordance with article 259.
3. If the members of the administration have not complied with the provisions of the previous paragraphs or if the resolutions there mentioned have not been passed, any shareholder or creditor can request from the court the dissolution of the company while such situation continues, without prejudice to the possibility for the shareholders to make the payments mentioned in paragraph 1 up to 90 days after the citation of the company; the judicial proceedings shall be suspended for the same period of time.
OTHER RIGHTS AND OBLIGATIONS
(Usufruct and pledge of company participation)
1. The creation of a usufruct and the pledge of company participations are subject to the form required, and to the limitations established, for the transfer of such participation.
2. Except if there is an express stipulation to the contrary by the parties, the rights inherent to the pledged company participation belong to the holder of the participation, but the balance of the liquidation of the company shall be handed to the pledge creditor and computed as interest and capital of the debt secured; the excess shall be returned to the holder of the participation.
3. The usufructuary of a company participation has the right:
a) to the distributed profits corresponding to the time of duration of the usufruct;
b) to vote in general meetings, except in the case of resolutions that involve amendments to the articles of association or the dissolution of the company;
c) to enjoy the amounts that, in the act of liquidation of the company or in the redemption of shares, belong to the company participation which is the object of the usufruct.
4. In resolutions that involve amendment to the articles of association or merger, division, transformation or dissolution of the company, the vote belongs jointly to the usufructuary and to the holder of the underlying ownership right.
5. The usufruct of company participations is regulated by the provisions of the Civil Code in everything that is not regulated in this Code.
(Acquisition and transfer of goods from and to shareholders)
1. With the exception of those related to consumable goods and which are part of the normal activity of the company, the acquisition and transfer of company assets to shareholders holding a participation of more than 1% of the company capital can only be made against payment, and after prior approval by a shareholders' resolution in which the shareholder from or to whom the goods are to be acquired or transferred does not vote.
2. The shareholders' resolution shall always be preceded by verification of the value of the goods, in accordance with article 202, and must be registered prior to the acquisition or transfer.
3. Contracts which formalize the acquisitions or transfers to the shareholders mentioned in paragraph 1 shall, under penalty of nullity, be made in a written document, which can be a private document if no other form is required by the nature of the goods.
(Right to information)
1. Without prejudice to the rules applicable to each type of company, every shareholder has the right to:
a) inspect the minutes books of the general meeting;
b) inspect the book of registration of liens, charges and guarantees;
c) inspect the book of registration of shares;
d) inspect records of attendance, if they exist;
e) inspect all other documents which, in accordance with the law or with the articles of association, must be made available to the shareholders before general meetings;
f) request from the administrators and, if they exist, from the single supervisor or the members of the supervisory board or the company secretary, any information relating to matters included in the order of the day of the general meeting before a vote is taken, provided that this is reasonably necessary for an informed exercise of the right to vote;
g) request in writing from the administration written information about the management of the company, namely on any company operation in particular;
h) request copies of resolutions or of entries in the books mentioned in subparagraphs a) to d).
2. The right mentioned in subparagraph g) of the previous paragraph can be restricted by the articles of association and, regarding limited liability shareholders, made dependent upon holding a certain percentage of company capital, which cannot, in any case, exceed 5%.
3. A shareholder who uses information obtained in this manner to the detriment of the company is liable for the damage caused to it.
4. In case of refusal of requested information, a shareholder can request the court to order that the information be provided to him, explaining the reasons for the request. After hearing the company the judge shall decide, without further evidence, within 10 days. If the request is granted, the administrators liable for the refusal shall compensate the shareholder for the damage caused and refund him the expenses that he has justifiably made.
5. A shareholder to whom false, incomplete or clearly non-explanatory information is provided can request from the court a judicial examination of the company in accordance with article 211.
(Communications of a company to shareholders)
1. All company acts which must be personally communicated to shareholders shall be communicated by registered letter sent to the shareholders' domiciles on file with the company.
2. If communication by registered letter to all shareholders is not possible, announcements shall be published in accordance with article 326.
(Judicial examination of company)
1. If any shareholder has serious grounds to suspect gross irregularities in the activity of the company he can request the court to conduct an examination of the company so as to clarify the matter, indicating the facts on which the suspicion is based and the irregularities.
2. The court, after hearing the administration, can order that such examination be conducted, appointing an accounting auditor for the purpose.
3. The accounting auditor shall be indicated by the competent entity.
4. The court at its discretion can subject the carrying out of the examination to the posting of a bail by the applicant.
5. If irregularities are found, the court can, in accordance with their seriousness, order:
a) the regularization of any illegal situations found, stating a time limit for this;
b) the removal of the holders of company organs responsible for the irregularities found;
c) the dissolution of the company, if facts constituting a cause of dissolution are found.
6. If irregularities are found, the cost of the procedure, the payment of the auditor mentioned in paragraph 2 and the expenses that the applicant has justifiably made, shall be paid by the company, which will have a right of return against the holders of company organs responsible for the irregularities.
7. A similar judicial exam to the company can be requested by the head of the commercial register whenever an omission of acts of registration, or the content of documents presented for registration, point to the possible existence of irregularities which, after notification to the administration, are not corrected.
(Responsibility of dominant shareholder)
1. A dominant shareholder is an individual or a collective person who, by himself or together with other companies of which he is also the dominant shareholder, or with other shareholders to whom he is connected by agreements outside the company, detains a majority participation in the company capital, or has more than half of the votes, or has the power to elect the majority of the members of the administration.
2. A dominant shareholder who, by himself or through the persons mentioned in the previous paragraph, uses the power of domination so as to prejudice the company or other shareholders, is liable for the damage caused to the former or to the latter.
3. Grounds for the duty to compensate namely are the following:
a) to cause the election of an administrator or a member of the supervisory board or single supervisor who he knows to be morally or technically incapable;
b) to induce an administrator, manager, procurator, member of the supervisory board or a single supervisor or company secretary to practice an unlawful act;
c) to conclude, either directly or with the intermediation of another person, a contract with the company that he dominates, in favorable and discriminatory conditions, to his own benefit or to the benefit of a third party;
d) to induce the administration of the company, or any manager or procurator of it, to conclude with a third party a contract, in favorable and discriminatory conditions, to his own benefit or to the benefit of a third party;
e) to cause the approval of resolutions with the knowledge and the intention to obtain, for himself or to a third party, an undue advantage, to the detriment of the company or of other shareholders or of creditors of it.
4. An administrator, manager, procurator, member of the supervisory board, single supervisor or company secretary who practices, concludes or does not prevent, having the possibility to do so, the practice or the conclusion of any acts or contracts mentioned in subparagraphs b), c) and d) of the previous paragraph, is jointly and severally liable with the dominant shareholder for the damage caused to the company or directly to other shareholders.
5. Shareholders who intentionally contribute with their votes to the approval of a resolution mentioned in subparagraph e) of paragraph 3, as well as the administrators who intentionally execute it, are jointly and severally liable with the dominant shareholder for the damage caused.
6. If, as a consequence of the practice, conclusion or execution of any act or contract or taking of a resolution mentioned in paragraphs b), c), d) or e) of paragraph 3, the assets of the company become insufficient to satisfy the respective credits, any creditor can exercise any right to compensation that the company may have.
(Single shareholdership)
1. If the bankruptcy of a company with only one shareholder is declared, whether the company holds parts of its own capital or not, the single shareholder is personally, jointly and severally and without limit liable for all debts of the company if it is proven that the assets of the company were not exclusively used in performance of the respective obligations.
2. The non-exclusive use mentioned in the final part of the previous paragraph is presumed if the company's accounting books are not kept in accordance with subparagraphs b) and g) of paragraph 1 of article 242 or if legal transactions without a written form were concluded between the company and the shareholder.
COMPANY ORGANS
GENERAL PROVISIONS
(Company organs)
1. The organs of commercial companies are:
a) the general meeting;
b) the administration;
c) the company secretary;
d) the supervisory board or single supervisor.
2. The existence of a company secretary and of a supervisory board or single supervisor is compulsory in companies which are in any of the following situations:
a) have 10 or more shareholders;
b) issue bonds;
c) have the form of a public company;
d) have an amount of company capital, balance sheet value or income volume in excess of a limit stated by portaria of the Governor.
3. All holders of company positions shall declare in writing if they accept the exercise of the positions to which they have been elected or appointed.
(Judicial taking up of company positions)
If a person elected or appointed to a company position is obstructed from exercising it, such person can request the judicial taking up of the position, in accordance with the Civil Procedure Code.
GENERAL MEETING
(Matters falling within the competence of shareholder resolution)
Besides the matters specially attributed by the law, the shareholders have competence to pass resolutions on the following matters:
a) election and removal of the administration and of the supervisory organ;
b) balance sheet, profit and loss account and report of the administration concerning the accounting period;
c) report and opinion of the supervisory board or single supervisor;
d) apportioning of the results of the accounting period;
e) amendment of the articles of association;
f) increase and reduction of the company capital;
g) division, merger and transformation of the company;
h) dissolution of the company;
i) all matters which, in accordance with legal provisions or with the articles of association, do not fall within the competence of other company organs.
(Types of resolutions)
1. Shareholders take decisions by having a general meeting, in accordance with the rules set for each type of company.
2. A general meeting shall be preceded by a call and by other formalities, in accordance with the provisions and within the time limits stated for each type of company; however, the presence of all shareholders, personally or through a representative with specific powers for that purpose, renders non-invokable any irregularities, including the lack of a call, provided that no shareholder opposes the holding of a general meeting, at which, however, only resolutions on matters expressly allowed by all can be adopted.
3. Shareholders can take decisions without a general meeting, provided that all declare in writing the orientation of their vote in a document that must include the proposal of resolution, duly dated, signed and addressed to the company.
4. A resolution in writing is considered as adopted on the date on which the last of the documents mentioned in the previous paragraph is received in the company.
5. Once a decision is taken in accordance with paragraphs 3 and 4, the company secretary or, if he does not exist, the president of the chairing committee of the general meeting or the person who substitutes him shall provide information about such resolution, in writing, to all shareholders.
(General meeting)
1. Except if there is a legal provision to the contrary, all shareholders have the right to participate, discuss and vote, in the sessions of the general meeting.
2. Except if there is a provision of the articles of association to the contrary, a shareholder can only be represented in the general meeting by another shareholder, by the spouse, or by a descendant or ascendant; a letter signed by the shareholder and addressed to the president of the chairing committee is sufficient as an instrument of voluntary representation.
3. The persons who are part of the organs of the company shall be present at the sessions of the general meeting, if called by the president of the chairing committee.
(Restriction on right to vote due to conflict of interest)
A shareholder cannot vote, either personally or through a representative, and also cannot represent another shareholder in a vote, whenever he has a conflict of interest with the company in relation to the subject matter of the resolution.
(Ordinary and extraordinary sessions of the general meeting)
1. The general meeting shall take place ordinarily within the three months immediately following the end of each accounting period, in order to:
a) decide on the balance sheet, the profit and loss account and the report of the administration concerning the accounting period;
b) decide on the apportionment of the results;
c) elect the administrators and the members of the supervisory board, or the single supervisor, to any vacancies that may exist in these organs.
2. The ordinary general meeting can decide on the initiation of legal proceedings of liability against administrators and on the removal of those administrators who the general meeting considers responsible, even if this matter is not included in the order of the day.
3. The general meeting takes place extraordinarily whenever it is duly called, by initiative of the president of the chairing committee or upon request of the administration, supervisory board or single supervisor or shareholders representing at least 10% of the company capital.
(Call of sessions of the general meeting)
1. Sessions of the general meeting are called by the president of the chairing committee, in accordance and within the time limits stated for each type of company, with the exception of the call for the first general meeting, which shall be made by the shareholders.
2. If the president of the chairing committee does not call a general meeting when in accordance with the law he should do so, the administration, the supervisory board or the single supervisor or the shareholders that have requested it can call it directly; documented expenses which they have justifiably incurred shall be paid by the company.
(Call notice)
1. A call notice shall mention at least:
a) the firm, registered office and registration number of the company;
b) the place, day and time of the meeting;
c) the type of meeting;
d) the order of the day of the meeting, mentioning specifically the matters subject to resolution of the shareholders.
2. The call notice shall also contain an indication of any documents that are available for consultation by shareholders at the registered office.
3. Meetings shall take place in the registered office of the company or, if the chairing committee of the general meeting deems convenient, in any other place of the Territory, provided that the latter is properly identified in the call notice.
4. If the law or the articles of association require a quorum for the general meeting to take place and decide on a certain matter, a second date can be stated in the call notice for a new meeting should the quorum required for the first call not be present, provided that the two dates are separated by at least 15 days; a meeting taking place on the second date is considered, for all purposes, as a meeting of the general meeting under a second call.
5. A call notice shall be signed by the president of the chairing committee or, in the cases mentioned in paragraph 2 of the previous article, by any of the administrators, by the president of the supervisory board or by the single supervisor or by those shareholders who call the general meeting.
(Functioning of general meeting)
1. Sessions of a general meeting shall be conducted by a chairing committee [mesa] made of a president and at least one secretary.
2. The president of the chairing committee is elected by the general meeting, among the shareholders or other persons; the function of secretary to the chairing committee shall be undertaken by the company secretary, if there is one.
3. In the absence of election of a president in accordance with the previous paragraph, and if there is no company secretary, or also if either of them is not present, any administrator shall function as president of the chairing committee and any shareholder chosen by the latter shall be the secretary.
(Interruption and suspension of sessions)
1. If the matters in the order of the day cannot be exhausted on the day for which the meeting was called, it shall continue at the same time and in the same place on the following business day.
2. Without prejudice to the previous paragraph, a resolution can be taken to suspend the session and call a new one for a date within no more than 30 days.
3. A session of the general meeting can only be suspended twice.
(Majorities)
1. In no case is a resolution considered as adopted if it was not approved by the number of votes required by the law or by the articles of association.
2. The votes of shareholders who are prevented from voting in accordance with article 219 shall not be taken into account in the determination of the majority required by the law or by the articles of association.
3. The attribution of votes, the quorum for the functioning of the general meeting and the composition of the majorities necessary for passing resolutions, depending upon the subject matter, are regulated by the norms stated by the law for each type of company.
(Unity of vote)
1. The votes that each shareholder has a right to cannot be cast in different ways in the same voting process, nor can they be partly cast.
2. In case of breach of the previous paragraph all votes cast by the shareholder in that voting process shall be counted as abstentions.
3. A shareholder representing other shareholders can vote in a different way from those he represents and can decide not to exercise his own or the represented shareholders' right of vote.
(Lack of assent of shareholders)
Except in there is a provision of the law or of the articles of association to the contrary, resolutions by shareholders that decide on the special rights of one or some shareholders or categories of shareholders do not produce any effects until the holders of such rights have given their express or implied assent.
(Void resolutions)
1. The following resolutions by shareholders shall be void:
a) resolutions taken in a general meeting that was not called, except in the case of paragraph 2 of article 217;
b) resolutions taken in writing, if any shareholder has not exercised in writing the right to vote in accordance with paragraph 3 of article 217;
c) resolutions contrary to good mores [bons costumes];
d) resolutions on matters that are not subject to resolution by shareholders, by the law or by nature, or that are not part of the order of the day;
e) resolutions that breach legal provisions mainly or exclusively aimed at the protection of the company's creditors or of the public interest.
2. For the purpose of subparagraph a) of the previous paragraph, a general meeting whose call notice is not signed by a person with competence for it or that does not mention the meeting's date, time, place and order of the day is considered as not called.
3. The void nature of a resolution cannot be invoked if more than five years have elapsed since the date of its registration, except by the Public Ministry if the resolution constitutes a fact punishable under criminal law for which the law establishes a longer period of limitation of actions.
(Voidable resolutions)
1. The following resolutions by shareholders are voidable:
a) resolutions that breach any provision of the law, which do not cause it to be void in accordance with paragraph 1 of the previous article, or that breach any provision of the articles of association;
b) resolutions that have not been preceded by the provision to a shareholder of elements of information that he has requested and to which he has a right, granted by the law or the articles of association;
c) resolutions which have been taken in a general meeting whose process of call contains any irregularity other than those mentioned in paragraph 2 of the previous article.
2. For the annulment of a resolution on the basis of subparagraph a) of the previous paragraph, it is irrelevant that the general meeting or the other shareholders declare or have declared that the refusal of information has not influenced the taking of the resolution.
3. The voidability of a resolution whose annulment has been initiated within the legal time limit ceases if the shareholders confirm the voidable resolution by means of another resolution; however, a shareholder who has any interest in it can continue the legal proceedings with a view to the annulment of the resolution in relation to the period prior to the resolution that has confirmed it.
(Annulment proceedings)
1. The following have legitimacy to challenge a resolution:
a) any shareholder who has participated in it, unless he has voted with the winning majority;
b) any shareholder who has been irregularly prevented from participating in the general meeting, or who has not participated in the irregularly called meeting;
c) the supervisory organ;
d) any administrator or member of the supervisory organ, if the execution of the resolution might cause any of them to incur criminal or civil liability.
2. The time limit to initiate annulment proceedings is 20 days from:
a) the date on which the resolution was taken;
b) the date on which the shareholder had knowledge of the resolution, if he was irregularly prevented from participating in the general meeting or if the meeting was irregularly called.
(Provisions common to nullity and annulment proceedings)
1. Both proceedings for the declaration of nullity or for annulment shall be initiated solely against the company.
2. The company pays all costs of proceedings initiated by the supervisory organ, even if they are judged to be without merit.
3. The judicial decision that declares void or voids a resolution produces effects in favor of or against all shareholders and organs of the company, even if they were not party to the procedure or have not intervened in it.
4. A declaration of nullity or annulment does not affect the rights acquired in good faith by third parties, on the basis of acts practiced in execution of the resolution.
5. There is no good faith if the third parties knew of or should have known of the cause of nullity or voidability.
(Suspension of company resolutions)
1. Any person with legitimacy to request a declaration of nullity or annulment of a resolution by shareholders can petition the court to order a provisional suspension of the execution of the resolution or, if it has already been executed or is about to be executed, the suspension of its effects.
2. The time limit to request the provisional measure is five days from the date mentioned in subparagraphs a) and b) of paragraph 2 of article 230, or from knowledge of the resolution if the applicant is not a shareholder, member of the administration or of the supervisory board or a single supervisor.
3. The applicant shall state his interest in the order and the damage that may arise from its execution, the continuation of the execution or from its effects.
4. The Civil Procedure Code shall apply in everything that does not contradict the provisions of the previous paragraphs.
(Minutes)
1. Resolutions by shareholders can only be evidenced by the minutes of the meetings or, if resolutions in writing are allowed, by the documents that state them.
2. Minutes shall mention:
a) the place, day, time and order of the day of the meeting;
b) the name of the person who chaired the meeting;
c) the name of the person who acted as secretary to the meeting;
d) reference to the documents and reports submitted to the meeting;
e) the exact content of the resolutions proposed and the result of the respective votes;
f) an express mention of the direction of the vote of any shareholder who so requests;
g) the signature of the person who chaired the general meeting, or the signature of the person who chairs the following meeting, as well as the signature of the person who acted as secretary to the meeting.
3. A reference to any resolutions taken in writing in accordance with paragraphs 3 and 4 of article 217, and to resolutions stated in public deeds or in instruments out of notes [fora de notas], shall be inserted in the minutes book or in the loose sheets; copies of such documents shall be filed with the company.
4. Minutes can also be taken in a separate document; the signatures of shareholders shall be certified by a notary.
5. No shareholder has a duty to sign minutes that are not recorded in the respective book or in loose sheets, duly numbered and signed.
[As amended by Law no. 6/2000, of April 27]
ADMINISTRATION
(Administration)
1. Any individual or collective person with full capacity can be an administrator.
2. If a collective person is appointed administrator, it shall nominate an individual to exercise the position on its behalf; the collective person is jointly and severally liable with the appointed person for the acts of the latter.
3. The composition, appointment, removal and functioning of the administration shall follow the rules stated for each type of company; the first administration shall be appointed by the shareholders in the act of incorporation in accordance with subparagraph f) of paragraph 3 of article 179.
[As amended by Law no. 6/2000, of April 27]
(Competence of administration)
1. A company's administration shall manage and represent it, in accordance with the rules stated for each type of company.
2. The administrators of a company shall always act in its interest and shall act with the diligence of a systematic and ordered manager.
3. Irrespective of an express authorization in the articles of association, the company can, by means of an authorization by the general meeting or by the board of administration, if there is one, engage managers to run certain lines of business that are part of its object, or appoint auxiliaries to represent it in certain acts or contracts or, by notary instrument, appoint procurators for the practice of certain acts or categories of acts.
4. The company is civilly liable for the acts and omissions of the persons mentioned in paragraphs 2 and 3 in the same manner as a principal is liable for the acts and omissions of an agent.
[As amended by Law no. 6/2000, of April 27]
(Powers of representation of administrators and binding of the company)
1. Acts practiced by administrators, in the name of a company and within the powers that the law grants them, bind it regarding third parties, irrespective of any limitations of powers of representation mentioned in the articles of association or arising from resolutions by shareholders, even if such resolutions are published.
2. However, the company can invoke such limitations against third parties, as well as limitations arising from its company object, if it proves that the third party knew or could not ignore, given the circumstances, that the act practiced did not respect such clause and if, in the meantime, the company did not assume it, by means of an express or implied resolution by shareholders.
3. The knowledge mentioned in the previous paragraphs cannot be evidenced only by the publicity given to the articles of association.
4. Administrators bind the company by means of their signature, with mention of their capacity.
COMPANY SECRETARY
(Company secretary)
1. A company secretary can be appointed, even if the company is not obliged to do so in accordance with paragraph 2 of article 214.
2. With the exception of the first one, who shall be appointed by the shareholders immediately in the act of incorporation in accordance with subparagraph f) of paragraph 3 of article 179, the company secretary is appointed and dismissed by the administration, in the minutes, among the administrators or any employees of the company; the function of secretary can also be exercised by a lawyer hired by the company for this purpose.
3. A company secretary who is also a procurator or administrator of the company cannot intervene in acts in this dual capacity.
4. In case of absence or impediment of the secretary, the administration shall appoint a person to replace him among the persons mentioned in paragraph 2.
(Competence of company secretary)
1. Besides other functions that the law or the articles of association may assign to him, a company secretary is competent to:
a) certify the declaration by the author of legally required translations, stating that the texts were faithfully translated;
b) function as secretary to the sessions of the general meeting and of the administration and sign the respective minutes;
c) whenever necessary, certify that the signatures of the shareholders or of the administrators were made in documents by themselves and in his presence;
d) ensure the completion and the signature of the attendance list of general meetings, if it exists;
e) promote the registration and the publication of acts subject to this;
f) certify that all copies or transcripts extracted from the books of the company are truthful, complete and up-to-date;
g) certify the total or partial content of the articles of association in force, as well as the identity of the members of the various organs of the company and the powers that they hold;
h) request the legalization and watch over the safekeeping, updating and order of the books of the company;
i) ensure that all books that must be made available for consultation by shareholders or third parties are available for at least two hours in each business day, during business hours and in their place of safekeeping as mentioned in the registration;
j) ensure that up-to-date copies of the articles of association, the resolutions of the shareholders and of the administration, as well as the entries in force in the book of registration of liens, charges and guarantees, are delivered or sent, within a maximum time limit of eight days, to persons who, having the right to request these, have done so.
2. The certifications made by the secretary under subparagraphs c), f) and g) of the previous paragraph replace certificates from the commercial register for all legal purposes.
SUPERVISORY ORGAN
(Supervisory board and single supervisor)
1. The supervision of a company is the competence of a supervisory board made of three members; the articles of association can determine its replacement by a single supervisor.
2. A member of the supervisory board or the single supervisor must either be an accounting auditor or a firm of accounting auditors.
3. A firm of accounting auditors which is part of a supervisory board shall appoint a shareholder or an employee, who in any case must be an accounting auditor, to exercise the functions conferred upon it within the company.
4. The other members of the supervisory board shall be individuals with full legal capacity.
(Impediments)
1. The following cannot be members of a supervisory board or a single supervisor:
a) the administrators and the company secretary;
b) any employee of the company or any person who is paid any remuneration by the company, other than for the exercise of the functions of member of the supervisory board or single supervisor;
c) spouses or persons related by consanguinity or affinity up to and including the third degree in relation to the persons mentioned in the previous subparagraphs.
2. An accounting auditor or firm of accounting auditors who is the single supervisor or a member of the supervisory board cannot be a shareholder of the company.
3. The supervening of any of the impediments mentioned in the previous paragraphs causes the automatic lapse of the appointment.
(Election and dismissal of members of supervisory board or single supervisor)
1. Members of the supervisory board or the single supervisor, with the exception of the case mentioned in subparagraph f) of paragraph 3 of article 179, are elected in an ordinary general meeting and remain in office until the following ordinary general meeting; the president shall be chosen in such election.
2. The members of the supervisory board and the single supervisor can be re-elected.
3. The members of the supervisory board and the single supervisor can be dismissed by means of a resolution by shareholders taken in a general meeting, provided that there is just cause for the dismissal, but only after they have been given an opportunity in that meeting to state the reasons for their actions and omissions.
(Competence of supervisory board or single supervisor)
1. The supervisory board or single supervisor has competence to:
a) supervise the administration of the company;
b) verify the regularity and updating of the books of the company and of the documents supporting the entries;
c) whenever deemed convenient and using the method thought adequate, verify the existing cash and the stocks of any type of goods or valuables belonging to the company or received by it as guarantee, for deposit or in any other manner;
d) verify the accuracy of the annual accounts;
e) verify if the appraisal criteria adopted by the company produce a correct appraisal of the assets and liabilities and of the results;
f) prepare annually a report on its supervisory action and give an opinion on the balance sheet, the profit and loss account, the proposal for the application of results and the report of the administration;
g) demand that the books and accounting registers enable a simple, clear and precise knowledge of the operations of the company and of its patrimonial situation;
h) perform all other obligations mentioned in the law and in the articles of association.
2. Without prejudice to the duties of the other members of the supervisory organ, the accounting auditor has a special duty to undertake all verifications and examinations necessary for an accurate and complete audit and report on the accounts, in accordance with the provisions of special legislation.
(Powers and duties of members of supervisory board or single supervisor)
1. In order to perform the obligations of the supervisory organ, the members of the supervisory board, jointly or separately, or the single supervisor, can:
a) obtain from the administration or from the company secretary, if there is one, the presentation of the books, records and documents of the company, for examination and verification;
b) obtain from the administration or from the company secretary, if there is one, any information or clarification on any matter within their respective competence or in which any of them has intervened or has had knowledge of;
c) obtain from third parties that have made operations for the account of the company any information necessary for the proper clarification of such operations;
d) attend the meetings of the administration.
2. The members of the supervisory board or the single supervisor have an obligation to:
a) attend the sessions of the general meeting;
b) attend the sessions of the administration in which the accounts of the accounting period are considered;
c) keep confidential any facts and information that they have knowledge of, without prejudice to the duty to report to the Public Ministry any illegal acts punishable by criminal law;
d) inform the administration of any irregularities and inaccuracies found and, if these are not corrected, inform the first general meeting that takes place after the expiry of the time reasonably needed for their correction.
3. In the exercise of their functions, the members of the supervisory board or single supervisor shall act in the interest of the company, the creditors and the public at large, and use the diligence of a rigorous and impartial supervisor.
(Meetings, resolutions and minutes of supervisory board)
1. The president of the supervisory board shall call and chair meetings.
2. The supervisory board meets whenever any member requests this from the president, and at least once every three months.
3. Decisions are adopted by majority; the board can only meet with the presence of the majority of its members, who cannot delegate their functions.
4. Minutes of meetings shall be prepared, which shall be signed by all members present; the minutes shall mention the resolutions passed as well as a summary report of all verifications, inspections and other steps taken by its members since the previous meeting, and their results.
5. If there is a single supervisor instead of a supervisory board, the report mentioned in the previous paragraph shall, at least once every three months, be written down in the book or attached to it or in any other way inserted in it and duly signed.
LIABILITY OF HOLDERS OF COMPANY ORGANS
(Liability of administrators towards the company)
1. Administrators are liable towards the company for damage caused to it by acts or omissions practiced in breach of duties arising from the law or from the articles of association, except if they prove that they acted without fault.
2. Administrators who have not participated, or who have voted against a resolution of the administration, and who have not participated in the respective execution, are not responsible for the damage arising from it; administrators shall have the intention of their vote recorded in the minutes, otherwise they shall be presumed to have voted in favor.
3. Administrators are not liable towards the company if the act or omission is based on a resolution by shareholders, even if voidable, with the exception of the provision of the final part of paragraph 5 of article 212, or if the resolution was passed under their proposal.
4. The liability of administrators is joint and several; paragraph 2 of article 192 applies to the relations among them.
(Liability restriction, limitation, renunciation and limitation of actions)
1. Any clause excluding or restricting the liability of administrators shall be void.
2. Resolutions by which shareholders approve balance sheets and accounts do not imply a renunciation by the company of the right to compensation against administrators.
3. A company can only renounce the right to compensation or agree judicial settlements [transigir] by means of an express resolution by shareholders, passed without a contrary vote representing a minority of at least 10% of the company capital, and only if the damage does not constitute a relevant reduction of the creditors' guarantee.
4. The time limit for limitation of actions runs only from the moment when the majority of the shareholders gain knowledge of the facts.
(Liability proceedings initiated by the company)
1. Liability proceedings to be initiated by the company depend upon a resolution by shareholders passed by simple majority, and shall be initiated within three months from the date of adoption of the resolution.
2. A resolution to initiate liability proceedings implies the dismissal of the targeted administrators; if necessary, shareholders shall immediately appoint special representatives of the company for the exercise of the right to compensation.
(Liability proceedings initiated by shareholders)
1. Liability proceedings in favor of the company can be initiated by an unlimited liability shareholder or by shareholders holding a capital participation of no less than 10%, if the company has not yet initiated the proceedings.
2. In the case mentioned in the previous paragraph, the intervention of the company in the judicial proceedings shall be provoked, in accordance with procedure law.
(Liability towards creditors of the company)
1. Administrators are liable towards the creditors of the company if, in breach of a provision of the law or of the articles of association which is mainly or exclusively aimed at their protection, the assets of the company become insufficient for the payment of the respective credits.
2. Whenever the company or the shareholders have not done so, the creditors of the company can exercise the right to compensation to which the company is entitled, if there is a serious risk of relevant reduction of the patrimonial guarantee.
3. Paragraphs 2, 3 and 4 of article 245 apply to the liability mentioned in paragraph 1.
(Direct liability towards shareholders and third parties)
Administrators are also liable, in accordance with general rules, towards shareholders and third parties, for damage caused directly to them in the exercise of their functions.
(Liability of managers, procurators and holders of other organs)
1. The provisions of articles 245 to 250 apply to the managers and procurator of the company, with the necessary adaptations.
2. The members of the supervisory board, the single supervisor and the company secretary, if they exist, are liable in accordance with the provisions of articles 245 to 250; they are also jointly and severally liable with the administrators for the acts or omissions of the latter, if the damage would not have taken place if they had fulfilled their obligations with due diligence.
BOOKS AND ACCOUNTS OF COMPANIES
BOOKS OF COMPANIES
(Compulsory books)
1. Besides the records and accounting books that the law declares compulsory, companies shall have:
a) a book of minutes of the general meeting;
b) a book of minutes of the administration;
c) a book of minutes of the supervisory board, if it exists;
d) a book of registration of liens, charges and guarantees;
e) a book of registration of shares;
f) a book of registration of bond issues.
2. The book mentioned in subparagraph d) of the previous paragraph shall mention all personal and real guarantees provided by the company, as well as all liens and charges on company goods and also any limitations to the full ownership or disposability of the company goods; copies of the acts or contracts from which such situations arise shall be filed as attachments to the book.
3. The books shall always be kept at the registered office of the company or in any other location within the Territory, provided that this location has been communicated for this purpose to the register, by a declaration signed by the secretary, if he exists, or by the administration of the company.
4. The books mentioned in subparagraphs a), d) and e) of paragraph 1 shall be made available for consultation by the shareholders for at least two hours a day, during business hours.
5. The book mentioned in subparagraph d) of paragraph 1 shall be made available for consultation by any interested party during the period mentioned in the previous paragraph.
6. All entries in the books mentioned in subparagraphs d) to f) of paragraph 1 that are no longer up-to-date shall be cancelled by the company secretary, if he exists, or by the administration, in a clearly visible manner, which however shall not prevent the reading of the entry; the responsible person shall sign and write in the margin the date of the cancellation.
7. Any interested party can request the entry in the books of any acts related to the company that should be mentioned in them.
8. Copies of any minutes or entries in books shall be provided to any shareholder or interested party who requests them, and who has a right to consult them, in the shortest time possible, and within no more than 8 days, at a cost of no more than 1 pataca for each 100 words.
9. Shareholders have the right to consult and to obtain copies of any minutes of sessions or resolutions of the administration, provided that three months have elapsed from their date or, before such time limit has expired, if authorized by the secretary, if there is one, or by the administration, on the grounds that there is no risk of damage to the company from the disclosure of such information.
COMPANY ACCOUNTS
(Duration, start and end of accounting period)
1. The accounting periods of companies shall be annual; they can start on April 1, July 1, October 1 or January 1 and end, respectively, on March 31, June 30, September 30 or December 31, depending upon how this is established in the articles of association.
2. If the articles of association are silent, the accounting period of the company shall start on January 1 and end on December 31.
(Annual accounts, report and proposal)
At the end of each accounting period, the administration of the company shall organize the annual accounts and, except if all shareholders are administrators and the company does not have a supervisory board or single supervisor, prepare a report on the accounting period and a proposal for the apportioning of the results.
(Report of administration)
1. The report of the administration shall describe, with reference to the annual accounts, the state and the evolution of the management of the company in the different sectors in which the company is active, making special reference to costs, market conditions and investments, in order to enable an easy and clear comprehension of the economic situation and profitability achieved by the company.
2. The report shall be signed by all administrators, except if any of them refuses to do so, which shall be justified in writing in an attached document.
3. The annual accounts, the report on the accounting period and the proposal for the apportioning of results shall be signed by the administrators who exercise functions at the time of the presentation, but the former administrators shall provide all information that may be requested from them in relation to their tenures.
(Report and opinion of supervisory board or single supervisor)
1. The annual accounts, the report of the administration and the proposal for the apportioning of results shall be handed to the supervisory board or single supervisor, together with the inventories that support them, up to 30 days before the date set for the ordinary general meeting.
2. The supervisory board or the single supervisor shall prepare the report and opinion mentioned in subparagraph f) of paragraph 1 of article 242 by the date on which the notices calling the ordinary general meeting are sent or published.
3. The report shall indicate:
a) if the annual accounts and the report of the administration are exact and complete, if they communicate in an easy and clear manner the patrimonial situation of the company, if they comply with the law and with the articles of association, and if the supervisory organ agrees or not with the proposal for the apportioning of the results;
b) the steps taken and verifications made, and their results;
c) the criteria for appraisal adopted by the administration, and their adequacy;
d) any irregularities or unlawful acts;
e) any amendments submitted to be made to the documents mentioned in paragraph 1 and the respective justification.
4. Paragraphs 2 and 3 of the previous article apply to the report and to the opinion of the supervisory board or single supervisor.
(Issue of bonds and public offer)
1. In companies that issue bonds or make public offers, the accounts shall also be the object of an opinion by an accounting auditor or firm of accounting auditors without connection with the company, or with the single supervisor, or with any of the members of the supervisory board.
2. The previous paragraph applies to companies that exercise permanent activity in the Territory, even if they do not have their registered office or main administration in it.
(Consultation of annual accounts)
The annual accounts, the report on the accounting period and the proposal for the apportioning of results, together with the report and opinion of the supervisory board or single supervisor, if they exist, shall be made available to the shareholders at the registered office of the company, during business hours, from the date when the notices calling the ordinary general meeting were sent or published.
(Judicial approval of accounts)
1. If the annual accounts and the report of the administration are not presented to the shareholders up to three months after the end of the respective accounting period, any shareholder can request the court to set a time limit, of no more than 60 days, for its presentation.
2. If such presentation does not take place within the time limit set in accordance with the final part of the previous paragraph, the court can order the termination of the functions of any one or more administrators and order a judicial examination in accordance with article 211, appointing a judicial administrator with the task of preparing the annual accounts and the report of the administration covering all the time elapsed since the last approval of the accounts.
3. Once the balance sheet, the accounts and the report are prepared, they shall be subject to the approval of shareholders in a general meeting called for such purpose by the judicial administrator.
4. If the shareholders do not approve the accounts, the judicial administrator shall petition the court, in the framework of the examination, for their judicial approval, enclosing an opinion by an accounting auditor not connected with the company.
AMENDMENTS TO ARTICLES OF ASSOCIATION
AMENDMENTS IN GENERAL
(General principles)
1. Shareholders are competent to pass amendments to the articles of association, except if the law provides otherwise.
2. If the consequence of the amendment is an increase to the payments imposed by the articles of association upon shareholders, such imposition shall bind only those shareholders who expressly agreed to such increase.
3. Amendments to the articles of association shall be drafted in one of the official languages of the Territory.
INCREASE OF CAPITAL
(Types and limits)
1. The capital of a company can be increased by means of new contributions or by the incorporation of available reserves.
2. It is not possible to pass an increase of capital until the initial company capital or the capital from a previous increase is fully paid.
(Requirements of resolution)
A resolution increasing the capital shall expressly mention:
a) the type and the amount of the increase of capital;
b) the nominal value of the new company participations;
c) the time limits for the payment of the capital participations arising from the increase;
d) the reserves to incorporate, if the increase of capital is done by incorporation of reserves;
e) whether only shareholders participate in the increase and under what conditions, or if it will be open to third parties, namely through a public offer;
f) if new shares are created or if the nominal value of the existing ones is increased.
(Increase by means of new entries)
A resolution of increase of capital by means of new entries can only allow a delay in payment of participations within the limits set by the law.
(Increase by means of incorporation of reserves)
1. If it is not approved in the general meeting that approves the accounts of the accounting period or in the following 60 days, an increase of capital by incorporation of reserves can only take place with the approval of a special balance sheet, organized, approved and registered in accordance with the rules of the annual balance sheet.
2. The company's own shares participate in the increase, except if there is a resolution by shareholders to the contrary.
3. If there are company participations subject to usufruct, the usufruct shall apply in the same manner to the new participations arising from the increase by incorporation of reserves.
REDUCTION OF CAPITAL
(Requirements of reduction resolution)
1. A resolution approving a reduction of capital shall clarify its purpose as well as the respective type, mentioning if the nominal value of the participations is reduced or if there is extinction of participations and, in the latter case, which are the shares affected by the reduction.
2. A reduction not motivated by losses can only be approved if the net worth of the company will become at least 20% in excess of the sum of the capital, the legal reserve and the compulsory reserves created in accordance with the articles of association, certified through a report to be prepared by an accounting auditor or firm of auditors, which shall be attached to the resolution.
(Registration and publication of resolution)
A resolution approving a reduction of company capital shall be registered and published.
(Moment in which reduction of company capital takes effect)
Company capital is reduced with the registration of the resolution on the reduction of the capital.
(Protection of company creditors)
1. Guarantees shall be provided to creditors whose credits were created before the publication of the resolution on the reduction and who cannot claim payment yet, provided that they demand such guarantees within 30 days from such publication; the creditors shall be informed of the right mentioned in this paragraph in the publication of the resolution.
2. Creditors whose credits are already guaranteed cannot exercise the right granted to them in the previous paragraph.
3. Payments to shareholders on the basis of the reduction of capital cannot be made before 60 days from the date of publication of the resolution of reduction, and only after guarantees have been given or payment made to creditors who have demanded it.
(Reduction motivated by losses)
1. The previous article does not apply:
a) if the reduction is motivated by losses;
b) if the purpose of the reduction is the creation or the reinforcement of the legal reserve.
2. In the cases mentioned in the previous paragraph the shareholders are not released from their obligations of payment of capital.
(Simultaneous increase and reduction of capital)
1. It is allowed to approve the reduction of capital to an amount lower than the minimum required by the law for the respective type of company if such reduction is expressly subject to the condition of an increase of capital, to an amount equal or higher than that minimum, to be made within 60 days from such resolution.
2. The provisions on minimum capital for each type of company do not affect the validity of a resolution of reduction if the transformation of the company into a type that can legally have a capital of the reduced amount is simultaneously approved.
MODIFICATION OF COMPANY OBJECT
(Rights of creditors)
If the effect of an amendment of the articles of association is an essential modification of the object, or if it involves a complete change of activity, any creditor of the company can claim the early payment of his credits within 30 days from the registration of the resolution, except if there is a prior agreement to the contrary.
MERGER OF COMPANIES
(Concept and types)
1. Two or more companies, even if they are of different types, can merge into a single one.
2. The merger can be done:
a) by the global transfer of the patrimony of one or more companies to another one, and the attribution to the shareholders of the former of parts or shares in the latter;
b) by the creation of a new company, to which the patrimonies of the merged companies are globally transferred, the shareholders of the latter being given parts or shares in the new company.
(Merger project)
1. The administrations of companies wanting to merge shall prepare together a merger project which, besides other elements necessary or convenient for the perfect knowledge of the operation aimed at, shall mention:
a) the type, motivation, conditions and objectives of the merger, in relation to all participating companies;
b) the firm, registered office, amount of capital and registration number of each of the companies;
c) the participation that any of the companies may have in the capital of the other;
d) especially prepared balance sheets of the intervening companies, mentioning the value of the elements of the assets and liabilities to be transferred to the absorbing company or to the new company;
e) the parts or shares to be allocated to shareholders of the company being absorbed in accordance with subparagraph a) of paragraph 2 of the previous article, or of the companies being merged in accordance with subparagraph b) of that paragraph and, if any, the amount in money to be paid to the same shareholders, specifying the ratio of exchange of the company participations;
f) the draft amendment to be introduced in the articles of association of the absorbing company, or the draft articles of association of the new company;
g) the measures to protect the rights of creditors;
h) the rights ensured by the absorbing company or by the new company to shareholders holding special rights;
i) in mergers in which the absorbing company or the new company is a public company, the types of shares of such companies and the date from which the shares will be handed over and will provide a right to profits, as well as the modalities of this right.
2. The project, or an attachment to it, shall indicate the appraisal criteria adopted, as well as the bases of the exchange ratio mentioned in subparagraph e) of the previous paragraph.
(Supervision of project)
1. The administration of each of the participating companies shall communicate the merger project and its attachments to the respective supervisory board or single supervisor, to have their opinion or, in their absence, to an accounting auditor or firm of auditors.
2. The supervisory board or the single supervisor, the accounting auditor or firm of accounting auditors can request from all participating companies any information and documents needed, and can undertake necessary verifications.
(Registration of project and call of general meeting)
1. A merger project shall be submitted for resolution to the shareholders of each of the participating companies, in a general meeting, irrespective of the type of company; the general meetings shall be called after the registration of the merger project and shall meet no earlier than 30 days from the date of sending or publication of the call, in accordance with paragraph 2, depending upon which takes place later.
2. A public notice of the registration of the merger project shall be made according to the form provided for in article 326, stating that the project and the attached documentation can be consulted by the respective shareholders and creditors at the registered office of each company and stating the dates for the general meetings.
(Consultation of documents)
1. From the publication of the notice required by the previous article, the shareholders and creditors of any of the companies participating in the merger have the right to consult the following documents in the registered office of each company, and to obtain, free of charge, a full copy of:
a) the merger project;
b) reports and opinions prepared by the supervisory organs or by accounting auditors.
2. They can also consult the accounts, reports of the organs of administration, reports and opinions of the organs of supervision and resolutions of the general meetings on those accounts, covering the last three accounting periods.
(General meeting)
1. In the meeting, the administration shall start by expressly declaring if, since the elaboration of the merger project, there has been any relevant change to the factual elements on which it is based and, in the affirmative case, what are the modifications of the project that are necessary.
2. If there has been a relevant change in accordance with the previous paragraph, the general meeting shall decide if the merger process must be restarted, or if it will continue with the consideration of the proposal.
3. The proposals presented to the various general meetings must be strictly identical; any modification introduced by a general meeting is considered as a rejection of the proposal, without prejudice to its renewal.
4. Any shareholder can demand, in the general meeting, any information about the participating companies that may be indispensable for him to understand the merger project.
(Resolution)
1. In the case of lack of special provision, the resolution shall be taken in accordance with the terms prescribed for the amendment of the articles of association.
2. The resolution can only be executed after the assent of the prejudiced shareholders is obtained, if it:
a) increases the obligations of all or some shareholders;
b) affects special rights that some shareholders hold;
c) modifies the proportion of their company participations in relation to the other shareholders of the same company, except to the extent to which such modification arises from payments demanded in order to comply with legal provisions imposing a determined or minimum value for each unit of participation.
3. If any of the participating companies has various categories of shares, the merger resolution of the respective general meeting is only effective after its approval by a special meeting of each category.
(Participation of a company in the capital of another)
1. If any of the companies holds a participation in the capital of another, it cannot make use of a number of votes higher than the sum of those of all the other shareholders.
2. For the purpose of the previous paragraph, to the votes of the company shall be added the votes of other companies controlled by the former in accordance with article 212, as well as the votes of persons acting in their own name but for the account of some of these companies.
3. As an effect of a merger by absorption, the absorbing company shall not receive parts or shares of itself in exchange for parts or shares in the absorbed company which are held either by the former or by the latter or by persons acting in their own name but for the account of any of these companies.
(Right to voluntary exoneration from a company)
1. If the law or the articles of association grant to a shareholder who has voted against a merger project the right to exonerate himself from the company, the shareholder can demand, within the 30 days following the date of the publication required by paragraph 1 of article 282, that the company acquires, or have a third party acquire, his company participation.
2. Except if otherwise stipulated in the articles of association, or if there is an agreement of the parties, an accounting auditor without connection with the merging companies shall determine the value of the participation.
3. The company must pay the value set within 90 days; if not, the shareholder can request its dissolution.
4. The right of the shareholder to transfer his participation by other means is not affected by the provisions of the previous paragraphs; the limitations prescribed by the articles of association of the company do not apply to such transfer, if effected within the time limit there mentioned.
(Merger document)
1. Once the merger has been approved by resolution of the general meeting of each of the participating companies, the respective administrations shall sign the respective merger document.
2. If the merger takes place through the creation of a new company, the provisions that apply to such creation shall be complied with, except if otherwise arises from their justification.
(Publicity of merger and opposition of creditors)
1. The administration of each of the participating companies shall promote the registration and publication of the resolution that approves the merger project.
2. Creditors of the participating companies can judicially oppose the merger within 30 days from the last publication done in accordance with the previous paragraph, based on the damage arising from it to the payment of their credits, if the latter are prior to such publication.
3. The creditors mentioned in the previous paragraph shall be given notice of their right of opposition in the publication mentioned in paragraph 1 and, if their credits are mentioned in books or documents of the company or are by any other means known to it, by registered mail.
(Effects of opposition)
1. Judicial opposition by any creditor prevents the registration of the merger until any of the following facts have taken place:
a) it is judged without merit, by a decision that can no longer be appealed, or, if the case was dismissed for procedural reasons [absolvição da instância], if the opposing creditor does not initiate new proceedings within 30 days;
b) the opposing creditor withdraws the proceedings;
c) the company has paid the opposing creditor or posted bail of an amount set by agreement or by judicial decision;
d) the opposing parties agree to the registration;
e) the amounts due to the opposing parties are judicially deposited [consignação em depósito].
2. If the court allows the opposition, the court shall order the reimbursement of the credit of the opposing party or, if it cannot yet be demanded, the posting of a bail.
3. The provisions of the previous article and of paragraphs 1 and 2 do not obstruct the application of contractual clauses that give the creditor the right to the immediate payment of his credit if the debtor company merges with another company.
(Bondholder creditors)
1 The provisions of articles 282 and 283 apply to bondholder creditors, with the modifications mentioned in the following paragraphs.
2. Meetings of the bondholders of each company shall take place; they shall be called by the common representative for each issue, in order to assess the merger in relation to possible damage to these creditors; resolutions shall be adopted by absolute majority of the bondholders present or represented.
3. If the meeting does not approve the merger, the right of opposition shall be collectively exercised through the common representative.
4. The holders of obligations, convertible or not into shares, enjoy, in relation to the merger, the rights that have been attributed to them for such case; if no specific rights were attributed to them, they enjoy the right of opposition, in accordance with this article.
(Holders of other instruments)
The holders of instruments other than shares, to which special rights are inherent, shall continue to enjoy at least equivalent rights in the absorbing company or in the new company, except if:
a) it is decided, in an extraordinary meeting of the instrument holders and by absolute majority of the number of each type of instrument, that the said rights can be modified;
b) if the special extraordinary meeting is not foreseen in the law or in the articles of association, all bearers of each kind of instrument individually assent to the modification of their rights;
c) the merger project foresees the acquisition of such instruments by the absorbing company or by the new company, and the conditions for such acquisition are approved, in an extraordinary meeting, by the majority of the bearers present or represented.
(Registration of merger)
After the period mentioned in paragraph 2 of article 282 has elapsed without any opposition or any of the facts mentioned in paragraph 1 of article 283 having taken place, the administration of any of the companies participating in the merger, or the new company, shall proceed with the commercial registration of the merger.
(Effect of registration)
With the registration of a merger:
a) the absorbed companies or, in the case of creation of a new company, all merged companies, are extinguished; their rights and obligations are transferred to the absorbing company or to the new company;
b) the shareholders of the extinguished companies become shareholders of the absorbing company or of the new company.
(Condition or term)
If the effects of a merger are dependent upon a suspensive condition or a suspensive term and, before the occurrence of such, relevant modifications take place in the factual elements on which the resolutions were based, the general meeting of any of the companies can decide to petition the court for the rescission or modification of the merger, its effect being delayed until the moment when the decision pronounced in the proceedings can no longer be appealed.
(Liability arising from merger)
1. The administrators, the members of the supervisory board or single supervisor and the secretary of each of the participating companies are jointly and severally liable for damage caused by the merger to the company and to its shareholders and creditors, if they have not observed the diligence of a systematic and ordered manager in verifying the patrimonial situation of the companies and in concluding the merger.
2. In relations among themselves, the co-obliged parties are liable in accordance with paragraph 2 of article 192.
3. The extinction of companies caused by a merger does not hinder the exercise of the right to compensation mentioned in paragraph 1, nor of their rights and obligations arising from the merger; such companies are considered to be in existence for this purpose.
(Enforcement of liability in case of extinction of company)
1. The rights mentioned in the previous article, if relating to companies mentioned in its paragraph 3, are exercised by a special representative, whose appointment can be requested from the court by any shareholder or creditor of the company.
2. Such special representative shall invite the shareholders and creditors of the company, by means of a notice published according to the form prescribed for company notices, to claim their rights of compensation, within a time limit stated by him, of no less than 30 days.
3. Compensation granted to the company shall be used in the payment of the respective creditors, to the extent that they have not been paid or guaranteed by the absorbing company or by the new company; any excess shall be distributed by the shareholders, in accordance with the rules applicable to the distribution of the balance of a liquidation.
4. Those shareholders and creditors who have not timely claimed their rights are not included in the sharing mentioned in the previous paragraph.
5. The special representative has a right to reimbursement for expenses that he has justifiably made and to remuneration for his activity; the court, using prudent discretion, shall determine the amount of the expenses and the remuneration, as well as the extent to which they shall be paid by the shareholders and interested creditors.
(Absorption of a company totally controlled by another)
1. The previous articles shall apply, with the exceptions mentioned in the following paragraphs, to the absorption by a company of another of whose parts or shares the former is the only holder, directly or for its account but under a separate name.
2. In this case the provisions on the exchange of company participations, on the reports of company organs of the absorbed company, and on the liability of those organs shall not apply.
3. The merger document can be prepared without previous resolution by the general meetings, provided that the following cumulative requirements are met:
a) the merger project indicates that if the respective call is not requested in accordance with subparagraph d) the document shall be signed without previous resolution by the general meetings;
b) the publicity required by article 275 has been made at least two months in advance in relation to the date of the document;
c) the shareholders were able to gain knowledge, at the registered office, of the documentation mentioned in article 276, at least from the eighth day following the publication of the merger project, and they have been informed of this in the same project or simultaneously with its communication;
d) up to 15 days before the date set for the preparation of the document, no general meeting to decide upon the merger has been requested by shareholders holding 5% of the company capital.
(Nullity of merger)
1. The nullity of a merger can only be declared on the basis of lack of a document or of a previous declaration of nullity or annulment of any of the resolutions of the general meetings of the participating companies.
2. Proceedings to declare the nullity of a merger can only be initiated while the existing defects have not been corrected, but not after six months from the publication of the registered merger, or from the publication of a judicial decision that can no longer be appealed declaring void or voiding any of the resolutions of the said general meetings.
3. The court shall not declare the nullity of a merger if the defect producing it is corrected within a time limit that it shall state.
4. A judicial declaration of nullity is subject to the same publicity required for a merger.
5. The effects of the acts practiced by the absorbing company, after the entering of a merger in the register and before the decision declaring nullity, are not affected by this declaration, but the absorbed company is jointly and severally liable for the obligations contracted by the absorbing company during that period; the merged companies are liable in the same manner for the obligations contracted by the new company, if the merger is declared void.
DIVISION OF COMPANIES
GENERAL PROVISIONS
(Concept and types)
1. A company is allowed to:
a) separate part of its patrimony in order to create a new company with it;
b) dissolve itself and divide its patrimony, each of the resulting parts being used to create a new company;
c) separate parts of its patrimony or dissolve itself, dividing its patrimony into two or more parts, in order to merge it with existing companies or with parts of the patrimony of other companies, separated by identical processes and with the same purpose.
2. Division can take place even if the company is in liquidation.
3. The companies resulting from a division can be of different types from the divided company.
(Division project)
1. The administration of a company that is to be divided or, in the case of a division-merger, the administrations of the participating companies, shall together prepare a division project which, besides all other elements necessary or convenient for the perfect knowledge of the operation aimed at, shall mention:
a) the modality, motivation, conditions and objectives of the division in relation to all participating companies;
b) the firm, registered office, capital value and registration number of each of the companies;
c) any participation that any of the companies may have in the capital of another;
d) the complete enumeration of the assets to be transferred to the absorbing company or to the new company, and the values attributed to these;
e) in the case of a division-merger, the balance sheet of each of the participating companies, prepared in accordance with subparagraph d) of paragraph 1 of article 273;
f) the parts or shares of the absorbing company or of the new company as well as, if applicable, the amounts in money to be distributed to the shareholders of the company being divided, specifying the ratio of exchange of the company participations and the basis for this ratio;
g) the categories of shares of the companies arising from the division, if they are public companies, and the dates from which such shares shall be made available;
h) the date from which the new participations grant the right to receive profits, as well as any possible specificities related to this right;
i) the rights ensured by the companies resulting from the division to shareholders of the divided company who hold special rights;
j) the project for the amendments to be introduced in the articles of association of the absorbing company or the draft articles of association of the new company;
l) measures to protect the rights of creditors;
m) measures to protect third party non-shareholders' rights to participate in the profits of the company;
n) the attribution of the contractual position of the company or intervening companies arising from labor contracts concluded with their employees, which are not extinguished as a result of the division.
2. The project or an attachment to it shall indicate the appraisal criteria adopted, as well as the bases of the exchange ratio mentioned in subparagraph f) of the previous paragraph.
(Applicable provisions)
The provisions on the merger of companies apply to division, with the necessary adaptations.
(Exclusion of novation)
The attribution of debts of a divided company to the absorbing company or to the new company does not cause novation.
(Liability for debts)
1. A divided company is jointly and severally liable for the debts that, as a result of the division, have been attributed to the absorbing company or to the new company.
2. Companies benefiting from the entries resulting from a division are jointly and severally liable, up to the value of such contributions, for debts of the divided company created prior to the registration of the division.
3. A company that pays debts that have not been attributed to it as a result of the joint and several liability prescribed in the previous paragraphs has a right of return against the main debtor.
SIMPLE DIVISION
(Requirements of simple division)
1. The division mentioned in subparagraph a) of paragraph 1 of article 293 is not possible:
a) if the value of the patrimony of the divided company becomes lower than the sum of the value of the company capital, the legal reserve and the compulsory reserves created in accordance with the articles of association, and the corresponding reduction of the company capital is not effected before or together with the division;
b) if the capital of the company to be divided is not fully paid.
2. For the purpose of subparagraph a) of the previous paragraph, in private companies the amount of the supplementary payments made by the shareholders and not yet refunded shall be added.
3. The verification of the conditions required in the previous paragraphs shall be expressly mentioned in the opinions and reports of the organs of administration and supervision of the companies, as well as by the accounting auditor or firm of accounting auditors.
(Separable assets and liabilities)
1. In a simple division, only the following elements can be separated for the creation of the new company:
a) participations in other companies, whether they are all or part of those that the company to be divided holds, and only for the formation of a new company whose exclusive object is the management of company participations;
b) assets that are coordinated within the patrimony of the company to be divided so that they form an autonomous unit.
2. In the case of subparagraph b) of the previous paragraph, it is possible to attribute to the new company the debts that are economically related with the creation or the functioning of the unit there mentioned.
(Capital reduction of company to be divided)
The capital reduction of the company to be divided is only subject to general
rules to the extent to which it does not remain within
the global amount of the
capital of the new companies.
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URL: http://www.asianlii.org/mo/legis/laws/cca201300141