# Company Law - Responsibility of "Socio Gerente"



## Puzzikatt (Jun 25, 2010)

Good morning, Anyone out there know much about Portuguese Company/Commercial Law? I am an equal shareholder in a Sociedade por Quotas - Limited company. My partner was nominated "Socio Gerente" (Managing Partner) - As per a message on this subject last year, is it still the case that any debts to the state (Tax Man, Social Security, etc) are the solely the responsibility of thie Socio Gerente, and not me, who is merely a "Socio" (shareholder)? Any advise much appreciated.


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## omostra06 (Sep 11, 2007)

Puzzikatt said:


> Good morning, Anyone out there know much about Portuguese Company/Commercial Law? I am an equal shareholder in a Sociedade por Quotas - Limited company. My partner was nominated "Socio Gerente" (Managing Partner) - As per a message on this subject last year, is it still the case that any debts to the state (Tax Man, Social Security, etc) are the solely the responsibility of thie Socio Gerente, and not me, who is merely a "Socio" (shareholder)? Any advise much appreciated.



For the type of business you have, you (and all partners) are equally responsible for debt. regardless of who you all registered as the manager, everyone has an equal responsibility when it comes to the company, this means debt as well as share of profits.


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## Puzzikatt (Jun 25, 2010)

*Thanks..... but another question*



omostra06 said:


> For the type of business you have, you (and all partners) are equally responsible for debt. regardless of who you all registered as the manager, everyone has an equal responsibility when it comes to the company, this means debt as well as share of profits.


Thanks for that.... another question. Can the Socio-Gerente with whom I have a 50/50 equal partnership with in the company, and with whom I agreed to be designated Socio Gerente pass on this responsibility to a third party, who has no shares whatsoever in the company. He has given power of attorney to this third party and I was not consulted. Any help appreciated! Thanks


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## yorkshire lass (Apr 18, 2010)

I know someone who was in an equal partnership of a limited company here in Portugal and the partner along with family went on a spending spree for the company making decisions without consultation, and the debts just grew and grew. He was liable for 50% pf the debt, so he sold out to the partner and was absolved of all responsibility. It became the only thing to do at the time. If you don't trust your partner, come out of the business and cut your losses.


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## omostra06 (Sep 11, 2007)

yorkshire lass said:


> I know someone who was in an equal partnership of a limited company here in Portugal and the partner along with family went on a spending spree for the company making decisions without consultation, and the debts just grew and grew. He was liable for 50% pf the debt, so he sold out to the partner and was absolved of all responsibility. It became the only thing to do at the time. If you don't trust your partner, come out of the business and cut your losses.


I agree with that, it is possible for anyone in the partnership (or staff) to run up company debts and then you as the partner will have a responsibility to pay.

As for your partner giving POA to someone else without consulting you, i would suggest a very quick vist to a lawyer to see where you stand, i would also be looking at dissolving the parnership if you have lost trust in your partner, seek professional advice quick....


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## Gabriel_S (Apr 21, 2010)

Hello Puzzikatt,

As initially stated, as a shareholder, you are only responsible for any company debt up to your share capital (€2.500 if you are partners in equal parts). You are not "personally" responsible for that debt, which would mean that all your property would respond for that debt.

However, you have to make sure that you were not also designated as a sócio gerente in the articles of incorporation, which would change things quite a bit.

In a sociedade por quotas (the closest English company type is a limited liability private company), the liability is limited, meaning that it is limited to the proper property of the company.

However, as a sócio *gerente* there are two types of responsibility that can arise for company debts.

In the normal life of the company, if you raise debt that you are unable to pay, the creditors can pay themselves by way of the companies goods, property, bank accounts, etc. If the debt was raised through gross negligence, then the manager(s) can also be held liable.

However, if as a sócio gerente, your partner happens to run up debt concerning contributions to the Portuguese Revenue or Finances (meaning that you didn't pay tax or social security payments when you should), then you're in a much more complicated situation. Even though you may not know that your partner ran up debt with the Revenue, as a co-manager you are legally obliged to know what is going on in your company, and therefore are "automatically" considered equally liable for the debt, and can be held criminally responsible if that debt is above €7.500,00. You would have to effectively prove that you didn't know what was happening with the company. Or say that you didn't pay tax/social security because of financial difficulties/in order to pay employee wages, etc.

Anyhow, the best thing you can do is see a lawyer, as you would have to explain the whole situation to get a proper answer. Long story short, as a sócio, you can never be responsible for more than your share capital.

Kind regards,




Puzzikatt said:


> Good morning, Anyone out there know much about Portuguese Company/Commercial Law? I am an equal shareholder in a Sociedade por Quotas - Limited company. My partner was nominated "Socio Gerente" (Managing Partner) - As per a message on this subject last year, is it still the case that any debts to the state (Tax Man, Social Security, etc) are the solely the responsibility of thie Socio Gerente, and not me, who is merely a "Socio" (shareholder)? Any advise much appreciated.


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## saintstommy (Apr 14, 2009)

For what it is worth to anyone reading this guys problems... the long and short is, be very careful in Portugal when setting up any type of business. only 4% of Portugal born people wish to go self employed. it is not due to a lack of ambition as deemed by many expats, its purely due to the minefield into which you step. Although I am sure the previous reply is correct, you may well go and see 4 or 5 different legal advisors and end up with as many answers.


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## Gabriel_S (Apr 21, 2010)

Oops, should have put a disclaimer before my previous post, something like "This information contained in this post is provided "as is" and does not constitute legal advice. I make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained in this post, and in no event shall I be liable for lost profits, or any special, incidental, or consequential damages arising out of or in connection with any information stated in this post, etc. etc."

What saintstommy says is very true. From an economic and legal standpoint, opening your own business in Portugal is a very difficult affair. Every year a large percentage of start-up companies end up in liquidation/bankruptcy. Some say that this is to blame on the very strict labour code that Portugal has, which doesn't allow for workforce flexibility in times of financial difficulties.

Despite it being the European country with highest number of lawyers per capita, legal advice does not come cheap in Portugal.

I think that _caveat emptor_ applies to every facet of life in Portugal in general...




saintstommy said:


> For what it is worth to anyone reading this guys problems... the long and short is, be very careful in Portugal when setting up any type of business. only 4% of Portugal born people wish to go self employed. it is not due to a lack of ambition as deemed by many expats, its purely due to the minefield into which you step. Although I am sure the previous reply is correct, you may well go and see 4 or 5 different legal advisors and end up with as many answers.


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## saintstommy (Apr 14, 2009)

LOL to be honest knowing how it s here we both should have put disclaimers!!!! Never knew fact on lawyers, but does not surprise me. Also from what I undersatnd on liquidation or insolvency, of a business or person in Portugal, you have to pay for it here and insolvency can last for 20 years and may even then not eleviate any debts to the state.... 

As my Lawyer said to me too late... If you want to make a small fortune in Portugal.... bring a bigger one!!!!!


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## Gabriel_S (Apr 21, 2010)

Yup, unfortunately insolvencies take a looooong time in Portugal, especially if you're a creditor, and you rarely get any money back, considering how credits are ranked/graduated here. The Revenue and Social Security are always paid first, and there's rarely anything left after they are paid. 

Anyways, 9 times out of 10 in an insolvency, the company will have no goods at all. They won't even own their company headquarters, their equipment and their cars, it'll all be leased.



saintstommy said:


> As my Lawyer said to me too late... If you want to make a small fortune in Portugal.... bring a bigger one!!!!!



This is pure poetry. Never heard of that saying before, but it is so very true.


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## Catx (Apr 15, 2009)

Gabriel_S said:


> Yup, unfortunately insolvencies take a looooong time in Portugal, especially if you're a creditor, and you rarely get any money back, considering how credits are ranked/graduated here. The Revenue and Social Security are always paid first, and there's rarely anything left after they are paid.
> 
> Anyways, 9 times out of 10 in an insolvency, the company will have no goods at all. They won't even own their company headquarters, their equipment and their cars, it'll all be leased.


That is true, but not just in Portugal. In Ireland, too, the state will take their slice first which, to me is a good idea, if it it protects forner employees pensions and social security entitlements.

I so agree, too, do not come here to get rich. If you can cover your costs, you are rich. Those of us who can survive here are the lucky few.


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## Gabriel_S (Apr 21, 2010)

Catx said:


> That is true, but not just in Portugal. In Ireland, too, the state will take their slice first which, to me is a good idea, if it it protects forner employees pensions and social security entitlements.
> 
> I so agree, too, do not come here to get rich. If you can cover your costs, you are rich. Those of us who can survive here are the lucky few.


Seems like we all agree that Portugal isn't exactly the land of opportunity, especially for foreigners that lack the every-important "cunhas". 

But at least the weather is great, supposed to climb to 37ºC on Sunday!


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