The possibility of selling shares in a company may be unknown to many people, or some aspects of this topic may not be widely known. However, the truth is that it is possible to sell shares in a company. 

With this article from Advogados em Braga you will learn everything about the sale of shares and how a lawyer can contribute to the effectiveness of the process. 

What is a limited liability company?

A limited liability company, also known as limited company (Lda.) It is a type of company where the Share capital In a limited liability company (Lda.), ownership is divided into quotas, meaning that the company's partners do not have their personal assets used to cover the company's debts. However, the partners' liability is limited to their contributions. Managers may be secondarily liable for the company's tax/social security debts under certain conditions (e.g., de facto management and negligence), in accordance with applicable law.

What are the characteristics and advantages of a limited liability company?

A limited liability company (sociedade por quotas) presents certain characteristics and advantages for those who use this type of company, most notably:

Features

• The company has one or more managers;
• The company name must include "Lda";
• The partners and the value of each share must be indicated;
• Each share has a minimum value of 1 euro; there is no maximum value.

Advantages

• The personal assets of the company's partners are protected;
• There is less bureaucracy compared to a public limited company (SA);
• Shares and capital stock are tailored to the needs of the shareholders. 

What are quotas in a limited liability company?

In a limited liability company, the shares represent the value of a company's share capital that corresponds to each partner. 

Shares vs. stock: What's the difference?

The main difference between quotas and shares lies in the type of company in which they are used. While quotas are used in limited liability companies, shares are used in public limited companies. 

Step-by-Step Guide to the Legal Process of Selling Shares?

For the sale of shares to be properly conducted, there are legal steps that must be taken into account, such as:

• Verify the social contract (consent/rights of preference).
• To put the share transfer agreement in writing.
• Obtain the consent of the company, when required (there is no default rule of unanimity; see articles of association and legal exceptions).
• Request the commercial registration of the assignment within 2 months of the title being issued.
• Update the RCBE within 30 days if the transfer changes the beneficial owners.
• Confirm tax communications (some actions are reported through the registry; however, validate with the Tax Authority/Social Security).

What are the costs and timelines for selling shares?

The costs are not arbitrary: registration and notary services are governed by the Fees Regulation for Registries and Notaries and the official price lists of the IRN (National Institute of Registries and Notaries). The final amount depends on the type of service (e.g., registration by deposit/transcription), the urgency, and any associated services.

How do you calculate the value of a company's share?

The company's value, such as net worth or projected cash flow, are some of the factors considered when calculating the value of a company's share. 

How can I sell my share in the company?

It is possible to sell your share in the company, but to do so you must follow these steps:

• Confirm the social contract (consent/preference).
• Communicate the intention to the partners and, if applicable, obtain the company's consent.
• Sign the assignment agreement (in written form).
• Register the transfer at the Land Registry (within 2 months).
• Update RCBE (if applicable) and validate tax/social security communications.

Are there rules for buying and selling shares?

Yes. The buying and selling of shares follows certain rules, such as the following:

• The transfer of shares is possible, but if it is not between spouses or ascendants, it may require approval from the company.;
• The transfer generally requires the company's consent; this may be waived if it is between spouses, ascendants/descendants, or between partners, unless otherwise stipulated in the articles of association.
• The right of first refusal exists if it is stipulated in the articles of association (very common); the agreement defines the terms and deadlines.
• The transfer is subject to commercial registration.

How do I declare the sale of company shares?

The sale of company shares must be declared on your income tax return, and there are firms that specialize in doing it correctly:

• If the seller is a resident individual, the sale generates capital gains (Category G) to be declared in Annex G.
• Default taxation: 28% (you can opt for aggregation).
• The calculation follows the general rules (acquisition value, charges, etc.); the Tax Authority may correct the value if there is a discrepancy with the actual value.
• Free transfers (e.g., donations) may be subject to Stamp Duty, with exemptions for spouses, descendants, and ascendants.

Is unanimous consent from the partners required for the transfer of shares?

There is no legal requirement for unanimity by default. The transfer of shares requires the company's consent, unless it occurs between spouses, ascendants/descendants, or between partners. The articles of association may require consent or regulate pre-emptive rights.

How can lawyers assist in the process of selling company shares?

Protecting customer rights is the main point regarding the functions of a Solicitor In a company share sale process, the analysis, drafting, or even reviewing contracts to ensure they comply with legal requirements are key aspects of a contract analyst's work. Solicitor in situations involving the sale of company shares. 

At Advogados em Braga, you'll find qualified professionals to provide support in any process related to the sale of company shares. 

Conclusion 

The sale of shares in a limited company (Lda.) is possible and must be formalized in writing, respecting the articles of association (consent and right of first refusal) and registration deadlines. After registration, verify the updating of the RCBE (Register of Beneficial Owners) and compliance with tax obligations (declaration of capital gains or, in the case of a donation, Stamp Duty). Legal counsel helps reduce risks, ensure legal compliance, and guarantee the correct documentation of the process.

A lawyer plays a crucial role in guiding those involved throughout the entire process and ensuring that the documentation is legally correct and safeguards the rights of those involved.