One of the main steps for setting up a business is the legal choice of the company to set up. It is very important to know all types of companies that can be incorporated in Portugal, in order to identify which one best suits the type of business.

Individual Entrepreneur (ENI)

It is the simplest legal form of setting up a company. Thus, no minimum amount is required for the share capital and its creation is only possible in the traditional method. This type of company is led and founded by a single individual or natural person. In the same way, his commercial name must be constituted by the full or abbreviated civil name of the entrepreneur and an expression related to the activity performed, if desired.

It is more aimed at small businesses, with reduced investment and low risk, in the commercial, industrial, agricultural or services sector.

Here, personal assets and business assets are merged. In other words, the responsibility lies entirely with the entrepreneur, who is responsible for the debts incurred by the company.

Like any other type, this one has advantages and disadvantages. The advantages are the owner's total control over the business, the possibility of reducing tax costs, simple constitution and dissolution and the fact that there is no minimum share capital. On the other hand, the main disadvantages are the risk associated with the merger of personal and business assets and the difficulty in obtaining credit for funds.

Sociedade Unipessoal por Quotas

In this type of company, only a single partner, natural or legal person, is designated as holder. Therefore, they hold all of the capital, whether in cash or goods valued in cash. The business name of the company must contain the expression “Unipessoal” or “Sociedade Unipessoal”, followed by “Limitada” or “Lda.”. The creation of the company can be done through the “Empresas online” website or at the counters of the “Empresa na Hora” initiative found throughout the country.

The share capital is distributed in shares and the minimum amount can be defined by the partners. However, this cannot be less than €1 (if the company is formed by two partners, this value is €2.).

Here, only the corporate assets are responsible for the debts incurred by the company.

The advantages of this method are the owner's total control over the business and personal assets are no longer merged with the company's assets. The disadvantages are the greater complexity in setting up the company and the fact that it does not have tax advantages.

Limited Liability Individual Establishment (EIRL)

This type of company is owned by a single individual or natural person. Likewise, the commercial name of the latter must consist of the long or abbreviated civil name of the owner, and a reference to the field of activity and the expression “Individual Establishment of Limited Liability” or its acronym “E.I.R.L.” may be added.

The creation of the company is only possible in the traditional method. The minimum share capital required is €5,000, of which one third of this amount must be in cash, the remainder being in the form of assets.

The company's assets and the owner's personal assets are independent of each other, but there is the possibility of there being combined assets.

In terms of liability, only the company's assets are liable for the debts, except in the case of bankruptcy of the owner related to the company.

Company by Quotas

This type of company requires having at least two partners as holders, none of which may have another company operating in the same sector. Its name must end with the expression "Limitada" or "Lda." and the first part can be composed of the full or abbreviated name of one or more partners, an expression relating to the activity carried out or a mixture of the two.

The creation of the company can be done through the website “Empresas online” or at the “Empresa na Hora” initiative counters found throughout the country. There is no minimum share capital, however each share must have a minimum value of 1 €.

The company's assets are independent of the partners' personal assets. In other words, the liability is limited to the share capital, which is responsible for existing debts.

The advantages of this type of company are the separation of assets, the diversification of experiences and knowledge of the different partners and easier access to funds and investments. On the other hand, the disadvantages are greater complexity in the constitution and dissolution of the company, the partners are not able to put losses of their business to their IRS and there is no total control of the company by an entrepreneur.

Public limited company

To create this type of company, a minimum of 5 partners or a single partner is required, as long as it is a partnership. The company name must be formed from the full or abbreviated name of one or more partners, an expression related to the activity carried out or a combination of both, ending with the expression “Sociedade Anónima” or “SA”.

The minimum capital required is €50,000, which is divided into shares of equal par value with a minimum of one cent. Here, it is the shares that speak the loudest, and these are represented in a titled form, that is, paper documents, or in book-entry form, that is, represented by registration in the purchaser's account, with the recording entity.

The creation of the company can be done through the website “Empresas online” or at the “Empresa na Hora” initiative counters found throughout the country.

The liability of each partner is limited to the number of shares subscribed as well as their value in the company, and only the company is held responsible for possible debts.

The advantages of this type of company are the greater ease in arranging funds and investments, greater ease in the transfer of securities representing the company and each partner is only responsible for their shares in the company. On the other hand, the disadvantages are the great dilution of the company's control, the incorporation and dissolution of the company is complex and costly and if the organization is listed on a capital market, it is subject to rigorous inspections.

Society in Collective Name

In this type of company, at least two partners are required, and they may have other businesses in the same industry. The name of the company must consist of the full or abbreviated name of one or more partners, followed by the expression “and Companhia” or “Cia” or another expression that indicates the existence of more partners.

The creation of this type of company is only possible in the traditional method and does not imply mandatory minimum capital.

Liability is unlimited, subsidiary and joint and the partners, in addition to their contributions, are also responsible for the contributions of all others.

Here, the personal assets of the partners and the assets of the company merge. That is, each partner is responsible for their own debts and for the debts of all other partners.

Limited Partnership

It is a mixed company since there are two different types of partners: limited partners and limited partners. The first contribute with goods or services, while the others contribute with capital assuming the effective management and direction of the society. This type of company also has two forms of incorporation: simple or by shares. In the simple form there is a minimum number of two partners. In the other case, the participations of the limited partners are represented by shares, requiring at least 6 partners, where 5 will be limited partners and 1 general partner.

O nome da empresa poderá ser composto pelo nome completo ou abreviado de pelo menos um dos sócios seguido de “em Comandita” ou “& Comandita” para sociedades do tipo simples, e no caso de sociedades por ações seguido de “em Comandita por Ações” ou “& Comandita por Ações”.

A criação deste tipo de empresa é apenas possível no método tradicional e implica um capital mínimo obrigatório de 50 000 €.

Responsibility varies according to the types of partners. Limited partners have limited liability, being liable only for their inputs. On the other hand, general partners are liable for the company's debts in an unlimited and jointly and severally manner. That is, each partner is responsible for their debts and the debts of others.

In terms of assets, in the case of limited partners, personal assets and the company's assets are separated, while general partners see their personal assets merged with those of the company.

Cooperative

This type of company is a non-profit collective association, freely constituted, with variable capital and composition. Its purpose is to satisfy the interests of its members, whether these needs, economic, social or cultural aspirations. When there is a positive revenue balance, this is distributed among its members according to their investment, as a form of reimbursement.

There are two distinct degrees. The first degree, where the cooperators are natural or legal persons with a minimum number of 5 members and the superior degree with a minimum number of 2 members, where associations are grouped in the form of unions, federations and confederations.

The creation of a company of this type is carried out by public deed and by private instrument and requires a minimum capital of €2,500.

Members' liability is limited to the amount of subscribed capital.