Types of Companies in Portugal

Image by <a href="https://pixabay.com/users/cristinamacia-2697130/?utm_source=link-attribution&utm_medium=referral&utm_campaign=image&utm_content=1458814">Cristina Macia</a> from <a href="https://pixabay.com/?utm_source=link-attribution&utm_medium=referral&utm_campaign=image&utm_content=1458814">Pixabay</a>

Individual Companies

There are three options for individual companies, the first being Sole Proprietorship, typically for agriculture, manufacturing, and service industries. There is no legal difference between the assets of the individual person and those of the business, so if any debts are incurred, the individual has unlimited responsibility. There is no minimum startup capital required and a business contract isn’t necessary. A sole proprietor must have a legal business name.

A Single Shareholder Limited Liability company is a form of sole proprietorship but may be run by one or two people.  This type of company must follow the same rules as a private limited company except those that have more than two partners. The company name must include “Sociedade Unipessoal” or just “Unipessoal” before “Limitada” or “Lda.” The liability is limited to each shareholder. It’s equal to the capital, which must be over 5,000€.

Finally, there is the option for an Individual Limited Liability Establishment. Here, an individual can use business assets to run the company or activity. There is a legal difference between those assets of the business and those of the individual. The capital must be at least 5,000€ and a minimum of two-thirds is to be paid, the remaining third can be used as a pledge. Before the official incorporation date, the full capital must be released. The individual’s name must be in the company name as well as “Estabelecimento Individual de Responsabilidade limitada” or “Lda.”

Public Limited Companies (S.A)

In order to establish this type of company, there must be a minimum of five individual or legal entity shareholders, either foreign or native. It is also possible for a foreign company to set up an S.A if there is a sole owner of the shares. The minimum capital is 50,000€ and must be divided among the shareholders. Liability is set at the amount of share capital a person has. Shares must be divided equally with a minimum nominal value of 0.01€. 70% of the initial capital can be deferred for a period of no more than 5 years.

You are not obliged to publish financial statement but they must be submitted online via the IES. 50% of the annual profits have to be shared unless a different amount has been noted in the Articles of association.

Legally, S.As must hold back 5% of the net income until this reserve reaches 20% of the capital. Again, the Articles of Association may state a higher amount.

Private Limited Liability Company (Lda.)

This is probably the most common type of business in Portugal. Shareholders are limited in the liability of debt while between them; they might be responsible for the initial capital that was paid in. There are usually two or more shareholders, however, it can be one for a maximum of the first year. Company members are individually liable up to the limit of shares and then jointly liable for the original capital. At least one of the partners may be liable to the company’s creditors if stated in the Articles of Association.

The due date for the release of the capital can be up to the date of incorporation. When legally permitted, the capital can be paid in until the end of that fiscal year.  Partners are able to set periods of time for cash entry. While there is no minimum capital, a certain amount must be represented as shares with a minimum value of 1.00€.

Sometimes, depending on the Articles of Association, there are restrictions on the transfer of shares. The transferring of shares must be in writing and approved of by the company, unless between spouses, children, and parents.

Financial statements do not have to be published but should be submitted online via the IES each year. They must also be approved by the General Assembly 3 months prior to the end of the financial year.

50% of the annual profits must be divided unless otherwise stated in the Articles of Association. Shareholders can distribute profits as long as the Articles of Association allow it and it meets legal and economic stipulations.

Like an S.A, 5% of the net income must be reserved until 20% of the capital is reached, this must be more than 2,500€. Again, the Articles of Association might state a higher amount.

Partnership Company

There is unlimited liability in a partnership company. The company’s assets and then the partner’s assets will be used to cover losses. There must be at least two shareholders. When a share amount has been defined, industry partners can also be shareholders and subject to the same liability. However, industry partners are only liable for company debt.

There is no minimum initial capital, as the shareholders have unlimited liability. At least one of the partner’s names must appear in the company name. The name must be followed by “e Companhia” or “Cia.” or “e Irmaos” in the case of various partners.

Limited Partnership Company

 In this case, one of the partners has unlimited liability, whereas the others are only liable for the amount of capital that is subscribed to them. There are two forms that a limited partnership company can take on. There is a simple partnership that doesn’t require share capital and a partnership limited shares. There is a minimum of two shareholders for a simple partnership. For a partnership limited by shares, there must be at least five limited partners and one general partner.

The partners with unlimited liability contribute to goods or services while the limited partners contribute in cash capital. If you register as a simple limited company, your business name must include the name of one general partner and “em Comandita” or & Comandita”. If the company is a partnership limited by shares, “em Comandita por Acçöes” or “& Comandita por Acçöes”.

European Limited Liability Companies

The partners in a European limited liability company must be from an E.U country and the business must be registered in one of the E.U countries. There will be capital in shares and partners have limited liability.

A European limited liability company will have the letters S.E after it and will be able to operate in any of the other E.U countries.


Two or more people form an agreement to carry out specific activities or make specific contributions to follow some of the objectives stipulated by law. A member is appointed the head of the consortium provides activities to other parties outside of the agreement. Members aren’t jointly liable to third parties. That being said, compensation to third parties can be divided.

Enterprise Group (A.C.E.)

This group of individuals or companies form in order to advance their performance or results. There is no initial capital needed. Party members are generally responsible for the group’s debts. The ACE follows the same rules and taxation as a partnership company.

The Memorandum of Association for an ACE has to include the following:

  • The name
  • The purpose of the group
  • The registered office
  • The duration of the agreements
  • The contributions made by each member

The memorandum should be registered with the National Company’s Register three months prior. A certificate must be attained for the name registration.

ACEs are not permitted to buy real estate unless its for a head office or business location. ACEs aren’t allowed to participate in civil companies or trade with other ACEs.

Pure Holding Company (SGPS)

SGPSs can be private limited companies or public limited companies and own stock in other companies. Their objective is to manage these groups of companies. An agreement is made for the SGPS to provide technical and admin services in return for remuneration. This type of company must hire a chartered accountant and submit annual financial statements, an inventory of stocks and an approved balance sheet.