Several advantages exist to run a commercial activity through a limited liability company instead of running same under individual name. Companies in Portugal acquire legal personality upon registration, this is, they become entities separate from their shareholders.
As an entity with legal personality, the company has powers to act in the most varied areas permitted by law and by the company’s corporate object. As an example, a company may execute agreements, may buy and sell within the ambit of its activity, sue and be sued and be even responsible for the breach of law.
As an entity with legal personality, a company is liable for its own debts. In general, the shareholders, managers or officers are not liable for the company’s obligations. If a company suffers losses, the company itself must face such loss by way of its own resources and not by way of the personal estate of its shareholders, managers or officers, its liability being limited to the totality of its patrimony.
Losses are, thus, only reflected in the shareholders up to the amount of their entries in the company’s share capital.
It should be noted that managers, provided the fact results from the breach of their legal or contractual duties, answer before the company’s creditors when the company’s patrimony becomes insufficient to satisfy the respective credits.
Unless the company’s articles of association provide otherwise, the company is incorporated for an undetermined period of time, irrespective of the death or disability of its shareholders, managers, officers, etc.
Learn more about the main types of companies in Portugal.