New and important amendments to the Portuguese Companies Law were enacted at the beginning of this year through Decree-Law 257/96 of December 31. One of the most important changes is that from now on it is possible to set up a limited liability company (sociedade por quotas) with a sole shareholder, individual or corporation owning the entire share capital. Hitherto one-person limited liability companies have only been permitted offshore in Madeira and the Azores.
With this amendment Portuguese law has enacted EU Directive 89/667 and aims to meet the long-standing need of Portuguese and foreign entrepreneurs for a single-person company, which had not been addressed by other available vehicles such as the unpopular Individual Establishment with Limited Liability.
The amendments also focus on other aspects of the Companies law such as the auditing of the accounts of Portuguese stock corporations (sociedades anónimas). In line with the European trend in this area and in accordance with the intent of EU Directive 84/253, Portugal has finally replaced the old system of entrusting the auditing of accounts to an audit board with a general principle of assigning this important task to an external independent official, the revisor oficial de contas, irrespective of the company's share capital or turnover.
Moreover, to enact Directive 151/EEC/68, the obligation to file annual company accounts with the Commercial Registry, hitherto generally mandatory for stock corporations and only in special circumstances for limited liability companies, has now been extended to all limited liability companies and other corporate organizations.
Other minor matters are also addressed in the amendments, including the creation of the position of company secretary for companies quoted on the stock exchange and the rules covering the approval of company names, which now permit the use of foreign names in certain circumstances, thereby facilitating the internationalization of the Portuguese economy.
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