Recently, there has been a significant increase in the number of Portuguese companies initiating dissolution and liquidation processes. This trend is the result of several cyclical and structural factors, such as increased operating costs, economic instability, difficulties in accessing financing, reduced domestic demand, and the shortage of skilled labor, especially in the commercial, industrial, and restaurant sectors.<\/p>\n
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According to articles 141 and 165 of the Commercial Companies Code (CSC), there are three procedures for terminating a company: dissolution, liquidation, and division of assets. These procedures are often confused, and therefore, it is essential to distinguish between them.<\/p>\n
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1. Dissolution<\/b><\/p>\n
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The dissolution of a company is the action that initiates the process of its extinction. If this decision is initiated by its shareholders, a general meeting must be convened for this purpose, and the dissolution must be approved by at least three-quarters of the votes corresponding to the capital, except when there are requirements inherent in Article 270 of the CCC in the case of a limited liability company and Article 464 of the CCC in the case of a public limited liability company.<\/p>\n
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If the company owns real estate, it will be necessary to schedule\/schedule a public deed for the process to begin, and the respective registration must be requested at the Real Estate Registry Office.<\/p>\n
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As a result of the decision, and based on Article 149 of the Companies Code, the entity’s financial statements as of the date of this decision must be presented to identify the company’s assets to be liquidated.<\/p>\n
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If the company has employees at this stage, it must notify them of the decision and inform them about the notice periods – which may vary depending on the employees’ years of service and the types of contracts.<\/p>\n
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2. Liquidation<\/b><\/p>\n
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After the dissolution deed, the company enters the liquidation phase. It is during this phase that the realization of assets and payment of liabilities occurs, namely, the sale of assets, the collection of outstanding invoices, and the payment of any debts the company may have. The objective of this phase is to ensure that the company has no liabilities in both accounts so that it can proceed to the next phase: Asset Sharing.<\/p>\n
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Without prejudice to the provisions of Article 148 of the CCC, in conjunction with Articles 147 and 156 of the same code, if the company has no debts on the date of dissolution, the partners may immediately proceed with the distribution of the company’s assets, thus enabling an “on-the-spot dissolution and liquidation.”<\/p>\n
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3. Asset Sharing<\/b><\/p>\n
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The last, but no less important, phase is the distribution of the remaining assets, which can also be considered part of the liquidation. These assets are used to reimburse the amount of contributions made by the partners. If there are insufficient assets, they must be distributed in proportion to their shareholding, as provided for in Article 156 of the Companies Code.<\/p>\n
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After this process, and in accordance with Article 160.2 of the Companies Code, the company is considered officially dissolved upon registration of the closure of the liquidation. With this declaration, and based on Article 8.5 of the Corporate Income Tax Code, the company is also considered terminated for IRC purposes, requiring the submission of a Form 22 declaration by the last day of the 5th month following the dissolution. It will also be necessary to complete the IES (Individual Income Tax Return), indicating that the company has been dissolved.<\/p>\n
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However, when the dissolution and liquidation period does not coincide with the end of the liquidation, a Form 22 declaration must be submitted for the period between the beginning of the tax period and the date of the dissolution, as per Article 79 of the Corporate Income Tax Code (CIRC), and another declaration must be submitted between the day following the dissolution and the day of the tax period in which it occurred.<\/p>\n
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If the company is able to opt into the “instant dissolution and liquidation” feature, as mentioned above, notification to the Federal Revenue Service and Social Security is made immediately. If this option is not available, the company has 15 days after the dissolution to do so, in the case of the Federal Revenue Service, and until the 10th day of the month following the termination in the case of Social Security.<\/p>\n
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For VAT purposes, a declaration of cessation of activity must also be submitted to be considered extinct for VAT purposes.<\/p>\n
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We also emphasize that the company must record all transactions it makes, and is required to maintain records for a period of 10 years, in accordance with Article 123, No. 4 of the CIRC and Article 52 of the CIVA.<\/p>\n","protected":false},"excerpt":{"rendered":"
Recently, there has been a significant increase in the number of Portuguese companies initiating dissolution and liquidation processes. This trend is the result of several cyclical and structural factors, such as increased operating costs, economic instability, difficulties in accessing financing, reduced domestic demand, and the shortage of skilled labor, especially in the commercial, industrial, and […]<\/p>\n","protected":false},"author":1,"featured_media":1222,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[53],"tags":[],"class_list":["post-2136","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-outsourcing-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/uhy.pt\/en\/wp-json\/wp\/v2\/posts\/2136","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/uhy.pt\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/uhy.pt\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/uhy.pt\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/uhy.pt\/en\/wp-json\/wp\/v2\/comments?post=2136"}],"version-history":[{"count":0,"href":"https:\/\/uhy.pt\/en\/wp-json\/wp\/v2\/posts\/2136\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/uhy.pt\/en\/wp-json\/wp\/v2\/media\/1222"}],"wp:attachment":[{"href":"https:\/\/uhy.pt\/en\/wp-json\/wp\/v2\/media?parent=2136"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/uhy.pt\/en\/wp-json\/wp\/v2\/categories?post=2136"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/uhy.pt\/en\/wp-json\/wp\/v2\/tags?post=2136"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}