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COMMERCIAL CODE

^ ] Commercial Code - Table of Contents ] Commercial Code - Table of Article ] [ Decree-Law no. 40/99/M ] Commercial Code - Art. 1 - 100 ] Commercial Code - Art. 101 - 200 ] Commercial Code - Art. 201 - 300 ] Commercial Code - Art. 301 - 400 ] Commercial Code - Art. 401 - 500 ] Commercial Code - Art. 501 - 600 ] Commercial Code - Art. 601 - 700 ] Commercial Code - Art. 701 - 800 ] Commercial Code - Art. 801 - 900 ] Commercial Code - Art. 901 - 1000 ] Commercial Code - Art.1001 - 1100 ] Commercial Code - Art. 1101 - 1200 ] Commercial Code - Art. 1201 - 1268 ]


Decree-Law no. 40/99/M

August 3

See also: Law no. 6/2000

The Commercial Code now approved answers a need to localize and modernize the private law concerning the exercise of commercial activities.

With this law, a profound reform is enacted in the legislation of Macao. The Commercial Code of 1888 has been in force for over one hundred years, a factor which alone explains its outdating regarding the evolution experienced by the economy of the Territory and the need to provide entrepreneurs and enterprises with an adequate legal framework.

The Commercial Code of 1888, prepared at the height of the industrial revolution, was based on individualist and liberal conceptions.

The Code now approved could not fail to reflect the rich and varied experience of more than a century, characterized by profound computing and technological revolutions. While recognizing the invaluable contribution of private initiative to progress, in a context of market competition, it is also necessary to consider imperative demands of social justice.

Therefore, the Code regulates in detail matters that were not mentioned in the law or which were addressed only incidentally, putting an end to doubts and controversies.

Not disregarding the continuity of current legal regulation, and respecting our legal tradition, as arising from doctrine and jurisprudence, the Commercial Code, while drawing inspiration and teachings from the most up-to-date commercial legislation of jurisdictions in the Roman-German tradition, and especially those with which our legal system has greatest affinity, has not failed moreover to take into account the teachings of Anglo-Saxon legal systems, given the position of Macao in the Asia-Pacific region. On the other hand, commercial law tends internationally to increasing uniformity, a new lex mercatoria is nowadays even mentioned, in a trend that the new Commercial Code has tried to interpret in accordance with the interests and specificities of the Territory.

The Code chose the commercial enterprise as the fundamental category, on the basis of which the whole new regulation of commercial activity is built. Similarly, that of the commercial entrepreneur assumes particular importance. These categories occupy, in terms of importance, the role that the categories of commercial act and merchant had in the Commercial Code of 1888, which, while not disappearing, are relegated to a secondary role. The Code has also here followed the most modern trends of comparative law, placing the Territory in the vanguard of the most modern systems of commercial law.

The choice of the commercial enterprise as the founding category of the new system of commercial law has determined a new structure for the Code, which involved the separation of the regulation of companies and other forms of exercise of collective enterprise or co-operation in the exercise of an enterprise, and the introduction of a book entirely dedicated to negotiable instruments.

In an innovative manner, the Code specifically regulates the commercial enterprise and the various legal transactions of which it can be the object. It establishes a right of ownership over the enterprise, a right that is more than, and different from, the various rights which confer upon the subject powers over each and every good which is part of it at any given moment. This solution will allow the protection of matters which up to now could not be protected, or only achieved partial but still insufficient protection by means of confining regulation, such as for example unfair competition.

Adequate regulation is provided for the main economic actors in private law - companies -, with the goal of simplification and economy of procedure in their creation and of great strictness and transparency in their functioning, while at the same time new forms of co-operation between entrepreneurs are introduced.

The contracts that inherently suppose or presuppose an enterprise are regulated, but the duplication of regimes, civil and commercial, for the same contract, is kept to an indispensable minimum, thereby advancing the simplification of the legal rules of private economic activities.

The formulation of a regime of negotiable instruments as a generic category is another of the most noteworthy innovations of the Code, in which the negotiable instrument is enshrined as a legal category.

Besides a general theory of negotiable instruments, the Code incorporates the uniform laws on bills of exchange, promissory notes and cheques. This is a merely formal option, in order to avoid the dispersion of instruments essential to commercial activity.

Accordingly;

After hearing the Consultative Council;

The Governor decrees, under paragraph 1 of article 13 of the Organic Statute of Macao, as law in the territory of Macao, the following:

Article 1

(Approval of Commercial Code)

The Commercial Code published in annex to this law, which is an integral part of it, is hereby approved.

Article 2

(Entry into force)

1. This law and the Commercial Code approved by it shall come into force on 1 October 1999.

2. The Code is not, however, applicable to legal proceedings pending on the day of its entry into force.

[Note: as a result of article 2 of Decree-Law no. 48/99/M, of September 27, the entry into force of the Commercial Code was delayed to 1 November 1999.]

Article 3

(Revocations)

1. Notwithstanding the next paragraph, all legislation pertaining to matters regulated in the Commercial Code is revoked, namely:

a) articles 1 to 206 and 224 to 484 of the Commercial Code, approved by Carta de Lei of 28 June 1888, extended to Macao by Decree of 20 February 1894, published in a supplement to Official Bulletin no. 16, of 27 April 1894;

b) Law of 11 April 1901, extended to Macao by Royal Decree of 22 April 1906, published in Official Bulletin no. 22, of 2 June 1906;

c) Law of 12 June 1901, published in Official Bulletin no. 1, of 4 January 1902;

d) Decree of 10 October 1901, published in Official Bulletin no. 1, of 4 January 1902;

e) Decree with force of law of 24 May 1911, published in Official Bulletin no. 28, of 15 July 1911;

f) Portaria no. 41, of 22 August 1913, published in Official Bulletin no. 40, of 4 October 1913;

g) Law no. 394, of 6 September 1915, published in Official Bulletin no. 16, of 21 April 1923;

h) Decree no. 13 004, of 12 January 1927, published in Official Bulletin no. 18, of 30 April 1927, extended to Macao by Decree no. 13 115, of 1 February 1927, published in Official Bulletin no. 13, of 26 March 1927;

i) Decree no. 15 623, of 25 June 1928, published in Official Bulletin no. 35, of 1 September 1928, extended to Macao by Decree no. 15 682, of 9 July 1928, published in Official Bulletin no. 34, of 25 de August 1928;

j) Decree no. 19 490, of 21 March 1931, published in Official Bulletin no. 24, of 14 June 1958;

l) Decree no. 19 638, of 21 April 1931, extended to Macao by Decree no. 20 235, of 19 August 1931, published in Official Bulletin no. 39, of 26 September 1931;

m) Decree no. 17 969, of 17 February 1930, published in Official Bulletin no. 12, of 22 March 1930;

n) Decree-Law no. 29 833, of 17 August 1939, extended to Macao by Portaria no. 9 811, of 7 June 1941, both published in Official Bulletin no. 47, of 22 November 1941;

o) Decree-Law no. 48 744, of 5 December 1968, published in Official Bulletin no. 51, of 21 December 1968;

p) Decree-Law no. 397/71, of 22 September, published in Official Bulletin no. 17, of 22 April 1972;

q) Decree-Law no. 154/72, of May 10, extended to Macao by Portaria no. 534/72, of September 14, both published in Official Bulletin no. 40, of 30 September 1972;

r) Decree-Law no. 598/73, of November 8, published in Official Bulletin no. 39, of 28 September 1974;

s) Decree-Law no. 679/73, of December 21, extended to Macao by Portaria no. 49/74, of January 26, both published in Official Bulletin no. 6, of 9 February 1974;

t) Decree-Law no. 31/83/M, of June 25;

u) Decree-Law no. 11/87/M, of March 9;

v) paragraph 2 of article 9 of Decree-Law no. 24/89/M, of April 3;

x) articles 2 and 3 of Law no. 4/92/M, of July 6;

z) article 110 of the Financial System Act [Regime Jurídico do Sistema Financeiro], approved by Decree-Law no. 32/93/M, of July 5;

aa) Decree-Law no. 52/93/M, of September 20;

bb) articles 79 and 80 of Decree-Law no. 56/95/M, of November 6;

cc) articles 49 to 53 of Decree-Law no. 16/96/M, of April 1.

2. The provisions of the Commercial Code do not revoke any legal norms providing special regimes for the matters regulated in the Code.

Article 4

(Conventions on bills of exchange, promissory notes and cheques)

1. The Geneva Convention of 7 June 1930, providing for a Uniform Law for Bills of Exchange and Promissory Notes, published in a supplement to Official Bulletin no. 6, of 8 February 1960, is incorporated in the Commercial Code under articles 1134 to 1211.

2. The Geneva Convention of 19 March 1931, providing for a Uniform Law for Cheques, published in a supplement to Official Bulletin no. 6, of 8 February 1960, is incorporated in the Commercial Code under articles 1212 to 1268.

Article 5

(Interest rate on bills of exchange, promissory notes and cheques)

The holder of bills of exchange, promissory notes and cheques, issued and payable in Macao, if the payment is in delay, can continue to demand that the compensation due for the delay be the default interest rate.

Article 6

(Reference to provisions revoked or incorporated)

If legal or contractual provisions refer to provisions revoked by or incorporated in this law, it is considered that such references point to the corresponding provisions of the Commercial Code, unless their interpretation requires a different solution.

Article 7

(Amendments to Commercial Code)

1. All future amendments to be made to matters included in the Commercial Code shall become part of it, and shall be inserted in the appropriate place, by means of the replacement of the amended articles, the suppression of the provisions that are to be eliminated or the addition of provisions as may be needed.

2. Any amendment to the provisions on bills of exchange, promissory notes or cheques will only have effects in Macao strictly within the limits allowed by the respective international agreements.

Article 8

(Follow-up committee)

The Governor shall appoint a committee made of jurists and entrepreneurs to follow-up, during the first five years, the application of the Commercial Code; it shall receive submissions towards the improvement of the Code and shall propose to the Governor such measures as it deems fit.

Article 9

(Temporal application)

The application of the provisions of the Commercial Code to past facts is subordinated to the rules of article 11 of the Civil Code, with the modifications and clarifications mentioned in the following articles.

Article 10

(Forbidden contractual clauses)

1. Clauses of contracts regulated by the Commercial Code, concluded before its entry into force, which are not permitted by it, are deemed automatically replaced by the imperative provisions of the new Code; it is however possible to make use of the default provisions appropriate to each case.

2. In the case of companies, the previous paragraph does not prejudice the powers that the law grants to the shareholders to pass amendments to the articles of association.

Article 11

(Continuity of firms)

Merchants can keep the firms that they legally used on the date of the entry into force of this law.

[As amended by Law no. 6/2000, of April 27]

Article 12

(Creation of a single shareholder private company by individual commercial entrepreneur)

1. Individual commercial entrepreneurs can, within 180 days from the entry into force of the current law, create a single shareholder private company for the exercise of their enterprise, being exempted from any fees upon the transfer.

2. If the creation of the company, given the nature of the goods that compose the enterprise, has to be notarized, the notary fees shall be reduced to one fifth.

Article 13

(Civil companies under commercial form)

1. Civil companies under commercial form, if they do not want to be subject to the new rules of the Commercial Code, must cancel their entry in the commercial register, within 90 days from the entry into force of the current law, and remove from their firm the addition that indicates their chosen commercial form.

2. If the time limit mentioned in the previous paragraph expires without any of the initiatives there mentioned being acted upon, the company is considered as a commercial entrepreneur in accordance with subparagraph b) of article 1 of the Commercial Code, with all the ensuing consequences.

Article 14

(References to commercial companies)

References made in legal provisions to commercial companies are understood to be made to the companies covered by the new Code, unless the result of the interpretation of such provisions is that they apply only to companies whose object is the exercise of a commercial enterprise.

Article 15

(Plural vote)

1. Rights of plural vote legally created before the entry into force of this law shall be maintained.

2. Such rights can be extinguished or restricted by a resolution of the shareholders, passed in accordance with the terms applicable to the amendment of the articles of association; the assent of the shareholders holding such rights is not necessary.

3. However, if such rights were granted in return for special contributions to the company, other than the entries, the company shall pay a fair compensation for their extinction or restriction.

4. The compensation mentioned in the previous paragraph can be judicially claimed within 60 days from the date on which the shareholder knew of the decision or, if it is contested, the moment from which the respective judicial decision can no longer be appealed.

Article 16

[Revoked by Law no. 6/2000, of April 27]

Article 17

(Minimum capital)

1. The minimum capital required by the new Code does not apply to companies created before the date of its entry into force.

2. The nominal values of shares as stipulated in accordance with the previous legislation can be maintained, even if they are lower than the minimum amounts set by the new Code, which, however, shall apply as soon as there is an increase of capital.

[As amended by Law no. 6/2000, of April 27]

Article 18

(Maximum capital and maximum number of shareholders)

Private companies regularly created that, by the date of the entry into force of this law, have a capital higher than as provided in paragraph 3 of article 359 of the Commercial Code, or a number of shareholders higher than that set in paragraph 1 of article 358 of the same law, are exempted from executing the necessary amendments or from their transformation into public companies.

Article 19

(Irregularity by lack of registration)

Articles 188 to 190 of the Commercial Code apply, without prejudice to effects already produced, in accordance with the law then in force, to companies which, by the date of entry into force of this law, are in any of the situations there mentioned.

Article 20

(Collective persons in organs of administration or supervision)

Collective persons which, by the date of entry into force of the new Code, exercise functions in organs of administration or supervision, can continue to do so, but they shall register the name of the individual who represents them.

[As amended by Law no. 6/2000, of April 27]

Article 21

(Own shares)

1. Shares of private companies redeemed prior to the entry into force of the new Code, mentioned in the balance sheet as such, are considered as extinguished from this date; the shares of the other shareholders are proportionally increased, if the shareholders do not pass a corresponding resolution of reduction of capital within 90 days from the said date; the shareholders can also decide to create a new share equal to the share redeemed, to be transferred to one or more shareholders or to third parties.

2. Public companies which, by the date of entry into force of this law, hold own shares, can keep them for three years from the said date.

3. The transfer of own shares to third parties, during the three years mentioned in the previous paragraph, can be decided by the board of administration.

4. Any own shares that the company holds after the three years mentioned in paragraph 2 shall be automatically annulled on that date, to the extent that they exceed 10% of the capital.

Article 22

(Communication of dominant participation)

1. The communication, in accordance with article 472 of the Commercial Code, of a dominant participation existing at the date of its entry into force, shall be done within the following 90 days.

2. Public companies shall give notice to shareholders, by adequate means, of the provision of the previous paragraph.

Article 23

(Loss of half of the capital)

The administration of commercial companies existing at the date of the entry into force of this law, whose net worth is less than half of the value of the company capital, shall call a general meeting for the purpose of paragraph 1 of article 206 of the Commercial Code, within 60 days from its entry into force.

Article 24

(Compliance with the Commercial Code)

1. Commercial companies existing at the date of the entry into force of the Commercial Code shall promote the amendments to their organic structures that may be necessary to comply with the provisions of the said Code, whenever, for any reason, an amendment to the articles of association takes place.

2. The previous paragraph applies, with the necessary adaptations, to permanent representations, registered by the date of entry into force of this law, of companies that do not have their main administration or registered office in the Special Administrative Region of Macao.

[As amended by Law no. 6/2000, of April 27]

Article 25

(Rules applicable to special judicial procedures)

Special procedures mentioned in the Commercial Code in the field of company law shall be regulated by the general provisions on the incidents of judicial proceedings [incidentes da instância] mentioned in the Civil Procedure Code, in everything that is not contrary and with the necessary adaptations.

Article 26

(Junior law bachelors [solicitadores])

Solicitadores can exercise the function of company secretary.

Article 27

(Transformation of existing companies into economic interest groupings)

1. Companies or associations already created, with objectives analogous to those designated in the Commercial Code for economic interest groupings, can transform themselves into one of these, without losing their legal personality, provided that they comply with the conditions mentioned in the Code.

2. Economic interest groupings cannot transform themselves.

3. Registration fees due as a result of the transformation mentioned in paragraph 1 are reduced to one fifth.

Article 28

(Fees)

Notary and register fees that might be due as a result of the acts required by the previous articles are reduced to one fifth.

Approved 2 August 1999.

To be published.

The Governor, Vasco Rocha Vieira.


Law no. 6/2000



^ ] Commercial Code - Table of Contents ] Commercial Code - Table of Article ] [ Decree-Law no. 40/99/M ] Commercial Code - Art. 1 - 100 ] Commercial Code - Art. 101 - 200 ] Commercial Code - Art. 201 - 300 ] Commercial Code - Art. 301 - 400 ] Commercial Code - Art. 401 - 500 ] Commercial Code - Art. 501 - 600 ] Commercial Code - Art. 601 - 700 ] Commercial Code - Art. 701 - 800 ] Commercial Code - Art. 801 - 900 ] Commercial Code - Art. 901 - 1000 ] Commercial Code - Art.1001 - 1100 ] Commercial Code - Art. 1101 - 1200 ] Commercial Code - Art. 1201 - 1268 ]


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