Take a seat


Typical legal form for start-ups

Sociedade anónima (S.A.).

Brief information

Most often Portuguese start-ups are incorporated as private limited liability companies (sociedade por quotas) (see below). They almost surely will convert into a public limited company (sociedade anónima) when closing a seed or series A financing round.

A PE/VC Fund generally monitors/controls its investment through a board seat and/or contractual observer rights. For a German PE/VC Fund an observer right is required, to maintain the asset management status. As an observer, the fund may attend meetings of the Board and have access to its documentation but will not be entitled to vote.

The mandatory corporate bodies of a S.A. are the Shareholders' Meeting, the Board of Directors and a supervisory body – the latter in one of the forms provided for under the law (notably, Supervisory/Audit Board or Statutory Auditor).

The Board of Directors manages the company and may be monistic (no legal distinction between executives and NEDs) or dualistic (executive and non-executive committees) – the latter model is rarely seen, even in listed companies.

It is necessary to carry out a case-by-case analysis as to whether the participation of a PE/VC Fund is permissible/advisable and on what terms.

A PE/VC Fund can also in principle accept an observer seat, in which case the contractual arrangements are decisive. The observer may not exercise any influence on the management decisions.

Other legal forms

Sociedade por quotas (Unipessoal Lda. or Lda.)

Brief information

Initially, Portuguese start-ups opt by the legal form Lda. since it requires a minimum share capital of EUR 1 per shareholder.

The mandatory corporate bodies of a Lda. are the Shareholders' Meeting and the manager or managers. A supervisory body or auditor is not initially mandatory.

The information in our toolbox provides managers of private equity or venture capital funds with an initial overview of certain framework conditions in the respective country. It does not provide advice on the law of any country, neither does it substitute such advice. Before taking over a board seat in a portfolio company, it is at all times necessary to seek expert advice. Our team is happy to assist you with all questions at any time.

In collaboration with: Morais Leitao Galvao Teles, Soares Da Silva & Associados

Sources: Wegen/Spahlinger/Barth, Gesellschaftsrecht des Auslands 2. EL Januar 2018