We hereby inform the business community and other interested parties that the new Commercial Code has been adopted/approved. In general, this new legislation aims to respond to the development of the private sector and the socio-economic dynamism that has occurred in recent years. The commercial legislation currently in force was repealed by three new Decree-Laws in equivalent parts.
With this publication we intend to briefly highlight some of the changes brought by the new Commercial Code. In effect, Decree-Law no 1/2022 approves the Commercial Code, repeals articles 1 to 476 of the Commercial Code approved by Decree-Law no 2/2005, of 27 December, as amended by Decree-Laws no 2/2009, of 24 April and 1/2018, of 4 May.
Due to the changes it introduces in the legal system, some provisions of the Code of Civil Procedure, the Notary Code, the General Statute for Micro, Small and Medium Enterprises, the Industrial Activity Regulation and the Annex to the Regulation for Contracting Public Works, Supply of Goods and Services to the State were also repealed.
The new Code introduces new types of business companies, eliminating those which were considered to have fallen into disuse. We understand that this change is intended to improve the business environment and modernize the process of incorporation and operation of companies by allowing, for example, that the registration and publication of certain company acts be published through the internet, migrating from the current system of using the Official Gazette and largest circulation newspapers.
As another innovation, the new Code allows the corporate bodies to hold their meetings by electronic means, without all of them having to be gathered in the same physical space. With this change, we understand that the legislator intends to make the process of corporate decision-making more flexible by taking into account modern practices and technological advances, thus making the functioning of the corporate bodies more practical and faster.
In addition, in order to meet international practices, we now have the prevision of a new corporate body. We refer to the figure of the Company Secretary whose basic function is to provide secretarial services to the corporate bodies, ensure that the company's books are up to date and in order, promote the registration and publication of corporate acts, inform the directors on legislation that affects the company, among other competencies. Another novelty regarding this body is that it will now be designated in the act of incorporation of the company, coinciding with the administration's mandate.
The new Code has also sought to standardize some concepts applicable in the business/corporate scope that were dispersed in various diplomas and with different criteria. This is the case of the concept of micro, small, medium and large companies, of applicability in several areas, each applying its own concept. The concepts have been standardized and are found in the same diploma, making it easier for interested parties to make use of it.
Regarding the vicissitudes of companies, the new Code brings more clarity to these processes, making them, we believe, more practical.
The new Code also regulates the relations between companies that are in group situations in their various forms of manifestation. Also, the penal provisions have been strengthened.
The new Code will come into force on 22 September 2022. We hope that with the entry into force of this Code there will be improvements in the business environment as a whole and that the regulated processes will be made easier through the use of technology and modern ways of acting in the corporate and commercial world.