Under Portuguese statutory law, a Sociedade por Quotas requires at least one managing director, unless the articles of association of the company specify a higher number of managing directors, in which case the body will function collegiately. There is no maximum number of managing directors of a Sociedade por Quotas.
In general, there is no maximum duration of the appointment of managing directors of a Sociedade por Quotas. As a result the appointment of a director continues until they resign, until action is taken to replace/remove them or, in case a term for the appointment is established, until that term expires.
The managing directors are not required to be resident in Portugal, however they should be able to enter Portugal in order to comply with their duties and obligations and, if that is not possible, someone should be empowered to carry out locally those tasks on behalf of the director.
Additionally, a foreign director will need to obtain a Portuguese Tax Identification Number (NIF) and, should the person in question be resident outside Portugal or the European Union, they must appoint a tax representative.
There are no formal qualifying requirements for directors. Any natural person with full legal capacity (ie at least 18 years of age and not regarded as mentally ill) can be appointed a Managing Director unless certain restrictions apply.
You are restricted in your capacity to act as a managing director if you fall into any of the follow categories:
Further, the managing director s has to be a natural person. It is not possible to appoint a legal entity as a managing director.
There must be at least one director and there is no maximum number of directors. Should there be more than one director, the company will be managed by a unitary board structure. The majority rule applies to board decisions, but formal board meetings are not frequent. Board meetings may take place wherever and whenever required, but – particularly when resolutions are passed – minutes of the meeting should be drafted and signed by all members of the board.
Pursuant to Portuguese statutory law, except for some powers (for example the merging of the company with another one or the disposal of real estate, the latter unless otherwise stated in the articles of association) which are to be exercised by the shareholders in a general meeting, the managing directors have unlimited signature rights and powers for any kind of legal transaction or legal act in connection with the administration of the Company. The material scope of the signatory rights and powers of the managing directors towards third parties can be restricted by the stipulations of the articles of association or by shareholder’s resolution. However, these restrictions are only enforceable against third parties where the company proves that the third parties were aware or should have been aware of the restriction.
When appointing a managing director, the company can grant him sole representation powers, however this must be registered with the commercial register.
However, the shareholders, by shareholders’ resolution, could limit the authorities of a managing director to a certain extent (eg actions requiring the prior approval by the shareholders), but this would only have internal effect, ie the managing director could still carry out these actions and bind the company to third parties, unless it is proven that the third parties were aware or should have been aware of the restriction. Normally, a managing director would request instructions from the shareholders before undertaking any extraordinary actions.
Whilst there is no specific provision in Portuguese companies’ law regulating conflicts of interests, it is generally accepted that, under the duty of loyalty towards the company, directors should not take decisions or enter into contracts where there is a conflict of interest situation. In such scenario, the director may become liable towards the company for any damages arising from the breach of that duty.
Additionally, the managing directors are restricted from self-dealing, unless the articles of association or his appointment resolution specify otherwise. Furthermore, and unless the shareholders give their consent, directors are prohibited from conducting, directly or indirectly, any competing activity with the company, becoming liable towards the company for the breach of this duty.