CreditHub: Portugal

• Ownership open to the public.
• Minimum capital of EUR 50,000.

A public limited company (Sociedade Anónima - S.A.) is a corporation whose ownership is open to the public. Anyone can buy shares in the company’s stocks. The financial liability of individuals is restricted to their capital investment, which is a minimum of EUR 50,000.

Best for large businesses seeking public investment.

• Owned by a small number of shareholders.
• Minimum capital of EUR 5,000.

A private limited company (Sociedade por Quotas - L.D.A.) is owned by a relatively small number of shareholders, and the sale of company shares is handled privately. The owner's financial liability is limited to their investment in the company. The minimum corporate capital required is EUR 5,000.

Ideal for small to medium-sized businesses with private investment.

• Available at Portal de Serviços.

Corporate information can be found at the Portal de Serviços: www.eportugal.gov.pt.

Easy online access to corporate data.

• Financial state information available.
• Provided by Portal de Serviços and private agencies.

You can obtain information on the financial state of affairs for companies and industry at the Portal de Serviços. There are also numerous private reporting agencies offering credit checks.

Evaluate financial health of businesses.

• Credit reports provide judgment information.

Normally you can obtain judgment information as part of a credit report from private reporting agencies.

Check for legal judgments in credit reports.

• Necessary documents include invoices, CMR, original cheques, and signed documents.

In order to apply for legal proceedings, you will need:

• Copies of the invoices
• The CMR or any other documents that prove the merchandise or service delivery to the debtor
• The original cheques or bills of exchange issued by the debtor
• Any documents signed by the debtor, in which the debtor acknowledges the debt
• Any other documentation shared between the parties

Maintain detailed records for legal processes.

• Legal ownership of goods reserved by supplier until full payment.
• Must be acknowledged by the debtor.

According to the Portuguese Civil Code (Art. 409 – “Reserva de Propriedade”), it’s possible to reserve the legal ownership of the goods to the supplier if the ownership is associated with a particular service or goods – usually, the full payment of the goods in question – by incorporating in the contract a retention of title clause. To be valid, there must be evidence of the debtor’s acknowledgment of a retention of title clause. This may be done in a contract signed by both parties or a signature on the general terms and conditions prior to receipt of the first sale.

Ensure retention of title clauses are acknowledged.

• Not mandatory but good practice to send a warning notice.

A warning notice to the debtor is not mandatory before filing any enforcement claims. Good practice dictates that a notice should still be given which contains:

• Creditor name and overview of the claim
• The total amount of the claim, including penalties (interest)
• Payment method required
• A warning that the claim will be enforced through the enforcement authority in case the claim is not settled by the required date
• Information on how to dispute the claim

If this measure has been taken and the payment still has not been made after a notice period, the creditor may file for enforcement.

Send a warning notice before legal action to encourage payment.

• Interest charges must be outlined in terms and conditions.
• Collection costs chargeable only if specified in contracts.

In the amicable phase, you can settle agreements with or without interest, depending on the payment plans in place. However, in legal proceedings the current interest rate may be applied. No lower than EUR 40 may be charged for any internal administrative collection costs.

Specify interest and collection costs in terms and conditions.

• General limitation period is 20 years.
• Shorter periods apply for specific claims.

There are no specific time limits on bringing or issuing class actions, except for the ordinary terms of criminal, civil, and administrative statutes of limitations. Under the Civil Code, the general civil statute of limitation is 20 years. However, the statutes of limitation vary depending on the type of claim, and shorter limitation periods are applicable. Rents, interests, and any periodically renewable benefits have a limitation of five years, whereas claims for non-contractual liability have a three-year deadline from the date when the party became aware of the right it holds. Limitation periods may be halted should the debtor be subject to judicial proceedings.

Be aware of the 20-year general limitation period and shorter periods for specific claims.

• Includes arbitration and mediation.
• Mediation is voluntary and not obligatory.
• Enforceability of mediation settlements.

The Law No. 29/2013, which entered into force on 20 May 2013, lays down the general principles applicable to mediation in Portugal. Under the law, mediation remains a voluntary procedure prior to court action (Princípio da voluntariedade, Article 4) and is not an obligatory process. Any mediation actions should be executed in writing to ensure agreement validity. The enforceability of a mediation settlement without the need for court approval (Princípio da executoriedade, Article 9) is a legislative innovation in Portugal. The rule applies if the following premises are met:

• (i) a dispute may be the subject of mediation and no specific provisions require a specific court approval
• (ii) the parties have capacity to enter into it
• (iii) it was reached through mediation conducted in accordance with the terms set out in the law
• (iv) its content is not against the public order
• (v) the mediation was conducted by a mediator officially registered by the Ministry of Justice.

Mediation settlement agreements signed in another EU Member State are also enforceable if points (i) and (iv) above are complied with and as long as under the laws of such Member State the given agreement is enforceable.

Mediation in Portugal is voluntary and enforceable if specific conditions are met.

• Two types of claims: Simple claim and Claim.

There are two types of court claims that can be executed:

• Simple claim (“Injunção”): Covers undisputed debt values up to EUR 15,000 and is generally cheap and relatively quick.
• Claim (“Acção Declarativa”): Utilised when the creditor foresees strong opposition or significant objection from the debtor. In the result of a judgment from the court, the creditor is expected to undertake collections costs. Should a party disagree with the judgment, an appeal can be lodged with the immediate superior court.

Use "Injunção" for undisputed debts up to EUR 15,000; "Acção Declarativa" for disputed claims.

• Must be lodged within 10 days from notification of judgment.

The most common appeal in Portugal is “Recurso de Apelação” (676 Civil Procedure Code), which must be lodged within 10 days from the notification of the original judgment.

File appeals within 10 days of the original judgment notification.

• Simple claims may last up to three months.
• Claims may take over one year.

“Injunção” may last up to three months, whereas “Acção Declarativa” proceedings could take over one year to obtain the court’s judgment.

Expect "Injunção" to take up to 3 months; "Acção Declarativa" may take over a year.

• Costs are determined by the court based on case value and other factors.

The court costs are determined by the court itself and are determined on the case value, expert/witness involvement, and other extrajudicial costs. In legal proceedings, interest will always be claimed.

Budget for variable court costs based on case value and other factors.

• Responsible for carrying out enforcement measures.

It is the responsibility of an enforcement agent (appointed by the creditor) to carry out all measures involved in the enforcement process which are not attributed to the court registry or are the responsibility of a judge. This includes summons, notifications, publications, database checking, seizure, and registration thereof, liquidation, and payments.

Enforcement agents handle all necessary enforcement measures.

• Enforcement agent must ensure all necessary actions are taken.

In cases where no judgment is made, the enforcement agent or bailiff must still ensure that they have executed all the necessary actions.

Ensure all enforcement actions are taken even without a judgment.

• Settle debts equally among creditors.
• Preliminary proceedings halt individual pursuits.
• Initial claim must be submitted within 30 days of awareness.
• Creditors can file for insolvency with supporting documentation.
• Insolvency administrator appointed by judge.
• Claims lodged within one month after publication in Official State Gazette.
• Duration of proceedings is between two and ten years.

Insolvency proceedings aim to settle the debts of creditors equally and with the same quota through the liquidation of the assets of the debtor company or through the collection of any income of any bankrupt individuals. With the start of the preliminary proceedings, all individual pursuits are halted. The debtor and/or board of the company in question is legally obliged to submit the initial claim to the court within 30 days of becoming aware of the insolvency situation. Creditors are also entitled to file for the insolvency of a debtor. When doing so, the creditor must provide all necessary evidence and supporting documentation. An insolvency administrator is selected by the judge and holds the power to administer and dispose of the insolvent's assets. The deadline to lodge claims after the publication in the Official State Gazette is one month. The whole duration of the insolvency proceedings is between two and ten years.

Understand the process and timelines of insolvency proceedings.