Decree-Law 79/2017, of 30 June 2017, was published last Friday and amends both the Insolvency and Corporate Recovery Code and the Companies Code, in order to implement the goals of the “Programa Capitalizar” approved by Council of Ministers Resolution 42/2016, of 18 August 2016

Simplified share capital increase by conversion of shareholders loans

The main amendments are designed to implement a simplified mechanism for share capital increase by conversion of shareholders loans at limited liability companies by quotas as follows:

Notwithstanding the fact that this type of share capital increase is an increase in kind, it may be made by mere statement of the certified accountant or statutory auditor (where the statutory audit is a legal requirement), setting out the amount in the accounting records, its source and the date. The wording of new Article 87.4 of the Companies Code raises a few issues however, particularly because it only refers to shareholders of “limited liability companies by quotas” while at the same time referring to “managers” and “directors”, and being included in the general provisions of the Code.

The relevant bill submitted to public consultation did not restrict the simplified mechanism to members of limited liability companies by quotas, and so we could arguably infer that the legislator intended afterwards to limit the mechanism to limited liability companies by quotas having “forgotten” to remove the references to “directors” (paragraph 4), “board of directors” (paragraph 5) – which should have been replaced with board of managers –, and to insert the new regime under the chapter dedicated to limited liability companies by quotas.

This doubt should be addressed by rectifying the statute.

This new regime also waives the rules of equality between members, as:

As part of the development of one of the State’s modernization axes – streamlining –, another amendment was made to the Companies Code, specifically Article 4-A, to expressly recognize that the demand for or requirement of a signed document under the Companies Code will be deemed satisfied with electronic signatures. The door is open for the

implementation of one of the measures set out in the Simplex+ program, namely the adoption of electronic minute

books. It will be interesting to see how Registry Offices and Notary Services will react to this amendment and the new

documents issued under it. The amendments come into force on 1 July 2017. VdA is available to provide more detailed clarifications on the consequences of the new decree-law.