Simplified procedure for share capital increase by conversion of shareholder loans

On July 1st it was enacted Decree Law no. 79/2017 of 30 June, which, within the Capitalising Program (Programa Capitalizar), has created a simplified mechanism for the share capital increase by means of conversion of shareholder loans, thereby amending the Companies Code.

With this new mechanism the shareholder who, by himself or jointly with other shareholders, holds the majority of the voting rights required to amend the by-laws, may convert in share capital its/his/her shareholders loans in the company, evidenced by the last balance sheet approved, by serving a written notice to the managers or directors and provided that no objection is raised by the remaining shareholders of the company in the following 10 days upon receipt of a notice served by the managers or directors of the company for such purpose.

The share capital shall be deemed increased, for internal purposes, once the 10 days period has elapsed without any objection being raised.

The shareholders loans granted to be company must be confirmed by way of a statement issued by a certified accountant or by the chartered accountant (when the auditing of the accounts is legally mandatory), mentioning the amount in the accounting regimes, as well as its origin and the relevant date shall suffice. This statement must be deposited upon the registry of the share capital increase and shall be subject to the disclosure formalities foreseen in the Companies Code.