The legal requirements for takeovers can be found in the Companies Code.
Types of takeover
As a concept, a business takeover involves taking over all or part of the capital of a business. This takeover can involve acquiring a minority holding or a controlling holding. The term Mergers and Acquisitions (M&A) normally refers to takeovers where control is taken of the target company’s capital.
It is assumed that a majority holding will lead to management control, whereby whoever has this holding can, in addition to other rights, appoint the company’s management and supervisory bodies.
Retiring business owners need to plan the transfer of their business in advance.
Some standard requirements to be completed when taking over a business are the same as when setting up a new business.
Certain company mergers must be notified to the Competition Authority (AC).
The form to be used for notifying mergers, in accordance with the Competition Act, can be sent to the Competition Authority by e-mail to: email@example.com.
However, notification by e-mail does not replace the requirement to submit a paper copy of the form, which must still be submitted to the Competition Authority within three days of the electronic submission. This protects the legitimate interests of the various participants (notifiers and interested third parties).
The Competition Authority’s Regulation on the Form for the Notification of Mergers is also available in .doc format.
The Institute for Support to Small and Medium-Sized Enterprises and Innovation (IAPMEI) can explain the various types of merger and acquisition.
The Business Gateway also has information on mergers and acquisitions and a Frequently Asked Questions section.
The business development agency AICEP Portugal Global has a database of business opportunities, especially internationally.
To find out about national business opportunities, business operators can consult two on-line information sources: the Institute for Support to Small and Medium-Sized Enterprises and Innovation (IAPMEI), which particularly focuses on the national sector, and the António Sérgio Cooperative Sector Institute (CASES), which specifically covers the Portuguese cooperative sector.
The Business Revitalisation and Modernisation Incentive Scheme (SIRME) was set up specifically to encourage mergers and acquisitions. It acts as a capital partner for businesses wanting to purchase other struggling businesses in order to restructure them.
SIRME is part of the Fund for the Revitalisation and Modernisation of the Business Fabric (FRME), which acts as a financial partner in mergers and acquisitions by investing in the capital of the acquiring business. It can also grant loans or guarantees to businesses in which it invests.
FRME’s financial intervention can be combined with tax benefits, such as exemptions from fees, municipal property tax (IMI), stamp duty and personal income tax (IRS)/corporation tax (IRC) (e.g. capital gains made from the transfer of the company’s goods in lieu of payment and from the sale of goods to creditors), for those businesses with which financial consolidation and corporate restructuring contracts have been signed.
Also in this area, the Rules on Tax Benefits set out the tax benefits for contractually agreed investments. In particular, they eliminate double taxation, under the terms and conditions laid down in the Corporation Tax Code (CIRC), during the contractual period, where the investment involves the formation or acquisition of foreign companies.