Entering into a company contract is not enough for a company to possess full legal personality. A company exists as such from the register date of the memorandum of association, which must occur within 90 days of entering into the memorandum of association.
Up to that point, all parties intervening in business carried out on behalf of the company are jointly and severally liable, to an unlimited extent, for all contracted obligations.
Relations prior to signing the memorandum of association
If two or more individuals create the false appearance that there is a company contract between them, then they shall be held jointly, severally and unlimitedly liable for the obligations contracted in these terms by any one of them.
If the formation of a commercial company is agreed to by its members, but they commence business before entering into the memorandum of association, then the provisions related to civil companies are applicable to relations between the members and between the members and third parties.
Relations prior to registration
In the period between signing the memorandum of association and its final registration, relations between members shall be subject, with the necessary adaptations, to the rules established in the memorandum of association and in the Portuguese Companies Act, except when such relations depend on the final registration of the memorandum.
The transfer of ownership of company equity holdings between living persons and amendments to the memorandum of association always require the unanimous consent of the members.
All those acting in representation of a company, as well as the members that authorised the business in question, bear joint, several and unlimited liability for all business conducted on the company´s behalf, in the period between signing the memorandum of association and final registration thereof. The other members are liable to the extent of their initial capital contribution in the company, plus any sums received by way of profits or the distribution of reserves.
The provision set forth in the previous paragraph ceases if the business conducted is expressly dependent on the registration of the company and the coming into effect thereof.
Invalidity of the memorandum of association prior to registration
Until such time as the final registration of the memorandum of association takes place, the rendering invalid of the memorandum of association or of one of the business statements is subject to the provisions applicable to null or voidable legal transactions, notwithstanding the provisions of Article 52 of the Portuguese Companies Act.
Invalidity arising from incapacity may be claimed by a contracting party who is incapacitated, or by its legal representative, against the other contracting parties and third parties alike. Incapacity arising from defective will or usurious practices may only be invoked against other members.
Taking on of business by the company prior to registration
With the final registration of its memorandum of association, a company fully takes on the following:
- The rights and obligations arising from the normal use of an establishment which constitutes a capital contribution in kind or which has been acquired by the company, in compliance with the stipulations of the memorandum of association;
- The rights and obligations emerging from legal transactions concluded prior to entering into the memorandum of association and which are specified therein and expressly ratified;
- The rights and obligations arising from legal transactions conducted by the management or directors under the authorisation granted by all members in the memorandum of association.
The rights and obligations arising from other legal transactions conducted in the company´s name prior to the registration of the memorandum of association may be taken on by the company by means of a decision by the management, which must be communicated to the counterparty within 90 days of the registration.
The company shall not assume obligations derived from legal transactions which are not mentioned in the memorandum of association and which entail special benefits, incorporation costs, initial capital contributions in kind or the acquisition of assets.
Registration of Quotas
Material events relating to quotas shall not legally bind the company whenever a request for registration, when required, is not made.
The company is responsible for ensuring the registration of facts which have in some way involved the intervention of or have been requested by a transferee, a transferer, a resigning member, a usufructuary or a secured creditor.
Registration applications must respect the order of the respective requests. In cases where the registration of various events relating to the same quota is requested on the same date, the registrations must be requested in order of event age. In the event of the fact referred to in the previous paragraph having been certified on the same date, registration must be processed in the order of their respective subordination.
So as to ensure that the company is able to process the registration of deeds modifying the ownership of quotas and rights conferred by them, the registered owner must have intervened in the process.
Duties of the company:
- The company must not apply for registration in cases where the request is not viable, by virtue of the applicable legal provisions, the documents submitted and previous registrations. In particular, the legitimacy of the interested parties, the compliance of the constitutional documents with regulations and the validity of the deeds contained therein must be verified;
- The company must not seek registration of a deed which is subject to charges of a fiscal nature, without proof that these have been paid;
- The documents certifying information relating to quotas or to their owners must be filed at the registered office of the company until closure of the settlement process;
The company must grant access to the documents referred to in the previous paragraph to any person expressing a credible interest in consulting them, within five days of such a request.