Commercial companies can only be incorporated in the Macau SAR by adopting one of the forms set forth in the Commercial Code: general partnerships (sociedades em nome colectivo), limited partnerships (sociedades em comandita), limited liability companies by quotas (sociedades por quotas) or limited liability companies by shares (sociedades anónimas) (Section 174 of the Macau Commercial Code, or MCC).

Companies with a registered office and/or head management in the Macau SAR are subject to the MCC (Section 175).

People interested in investing in the Macau SAR are welcome to do so via the incorporation of local entities, regardless of their (ie, the investor's) nationality or residence. However, the investor’s suitability may have to be verified by regulatory authorities prior to their entry in the capital of companies acting in regulated sectors such as gaming or financial.

In general partnerships, each partner is subsidiarily liable with the company and jointly liable with other partners for the company's debts, even with regard to the ones constituted before the individual/entity took a shareholding position (Section 331). The partners can contribute with capital or with industry (Section 332) and the articles of association shall value the contributions in industry to determine the profit-sharing structure (Section 333).

Limited partnerships can be created in the form of simple limited partnerships (comandita simples) or in the form of limited partnerships by shares (comandita por acções) when the shareholding of the partners with limited liability (sócios comanditários) is represented by shares (acções).

In a limited liability company by quotas, the capital is divided into shares designated as “quotas” and every shareholder is jointly liable for the payment of the other shareholders’ shares (Section 356). The maximum number of shareholders is 30 (Section 358). The share capital of this type of company shall correspond to the sum of the nominal value of all quotas, with a minimum of MOP25,000 (Section 359).

In a limited liability company by shares, the minimum number of shareholders is three (individuals and/or entities), while the registered share capital cannot be less than MOP1 million. The share capital is split into shares, all with the same nominal value, each of which cannot be lower than MOP100. Shareholders are only liable for the payment of the value of their subscribed shares (Section 393).

The shares can be ordinary or preferred: ordinary shares grant voting rights as well as the right to receive a dividend out of the distributable profits, whilst preferred shares do not grant a voting right, but rather a right to a priority dividend and priority repayment upon the liquidation of the company (Section 408).

The major law to regulate shareholders' rights is the MCC; in particular, Sections 194 to 213.

Generally speaking, regardless of the type of company incorporated, shareholders are entitled to:

• receive a share of the profits;
• elect the board of directors and the supervisory body, receive accounts and reports from them, and start liability actions against them;
• obtain information on the company’s activity; and
• attend and vote in the company’s general meetings (Section 195).

Special rights may be created but only through stipulation in the articles of association. However, such a provision shall neither determine a fixed share remuneration to shareholders, nor grant a special right to obtain information on the activity of the company to certain shareholders (Section 195). Suppression or variation of a special right requires the agreement of its respective beneficiary/holder, except if otherwise expressly provided in the articles of association (Section 184).

Rights such as that to receive profits pro rata to the share in the capital and to be appointed or to appoint members of the corporate bodies, or limitations of the right to participate in general meetings, may be customised in the company’s articles of association, and/or resolved by the shareholders, as applicable. In respect of the right to receive profits, it cannot be changed in such a manner that a shareholder is prevented from receiving any profits at all.

Changes to the articles of association are subject to mandatory registration with the Companies and Movables Registry Office and are hence available for public consultation.

Changes to those rights by means of a shareholders' agreement is subject to the limitations on scope and enforceability vis-à-vis the company, as referred to in 1.5 Shareholders' Agreements/Joint-Venture Agreements.

Shareholders’ agreements and joint-venture agreements are admissible and common in the Macau SAR.

By entering into a shareholders' agreement, shareholders can undertake to act in a manner that is not prohibited by law; namely, in respect of the exercise of the right to vote. However, they cannot validly agree to determine the actions of the company's directors or supervisory bodies. The agreement is effective between the signatory shareholders but does not bind the company, meaning that shareholders cannot challenge the company’s actions, or the actions of shareholders vis-à-vis the company, on the grounds that these breach their agreement.

Shareholders' agreements are null and void if, by virtue of them, a shareholder undertakes (i) to always vote following the instructions of the company or of one of its bodies, (ii) to approve their respective proposals, or (iii) to exercise the right to vote, or to abstain from exercising it, in return for a special advantage (Section 185).

Investors may also enter into joint-venture agreements of different types. Besides incorporated joint ventures (where investors pursue their business goals as company shareholders), investors may start unincorporated joint ventures, either in the form of a consortium (consórcio, in which two or more business persons or companies undertake to perform a certain action or make a contribution, with the purpose of executing a certain enterprise, providing goods to third parties, researching natural resources, etc) or an association in partnership (associação em participação, in which an individual or entity associates with another’s business enterprise, participating in the latter’s profits or profits and losses). These are regulated in Sections 528 to 562 of the MCC. Only a consortium is subject to written form.

Although joint-venture agreements are enforceable, the partners’ liability vis-à-vis third parties varies with the particulars of the joint venture in question.

In general, all shareholders have the same rights vis-à-vis the company, some of which are, of course, measured pro rata to their respective shareholding (eg, the right to vote or the right to dividend). This is without prejudice to the existence of special rights for certain shareholders (eg, the right to be appointed as director), as mentioned in 1.4 Main Shareholders' Rights, which must be expressly set forth in the company’s articles of association.

There are, however, certain rights that require a minimum threshold to be exercised, as in the following situations:

• the articles of association can provide for a manner of distribution of dividends between shareholders different than pro rata to respective shareholding percentage, but the articles would be null and void if a certain shareholder was prevented from sharing any profits (Section 197);
• the articles of association may limit the right to request information in respect of the management of the company from the directors to shareholders holding a certain percentage of the capital, which, in any event, cannot be above 5%;
• only shareholders holding 10% of the registered share capital can call an extraordinary general meeting (please refer to 1.9 Calling Shareholders' Meetings and 2.1 Legal and Regulatory Provisions);
• in limited liability companies by shares, only shareholders holding 10% of capital can request the removal of directors (please refer to 1.12 Shareholders' Rights to Appoint/Remove/Challenge Directors); and
• in limited liability companies by shares, the articles of association may require a certain number of shares to attribute the right to vote in the general meeting; however, if such is the case, the shareholders who do not meet such limit may require representation by a joint representative (Section 450).

Section 209 of the MCC sets the general rule with regard to accessing the company's documents and information, stating that shareholders have the right to:

(a) check the meeting minutes books of the general meeting and of the supervisory body;

(b) check the charges and securities book;

(c) check the shares registration book;

(d) check the attendance lists, if any;

(e) check all the documents that should be made available to shareholders before general meetings in accordance with the law and the articles of association (such as the documents in respect of the annual accounts, or the proposals submitted to the board of the general meeting in respect of any item of the agenda);

(f) request from the directors, the sole supervisor or supervisory board, and the company secretary anything related to the matters in the agenda of the general meeting before voting, when reasonably necessary for the informed exercise of the right to vote;

(g) request the directors to provide in writing information regarding the management of the company; in particular, in respect of certain transactions or specific business; and

(h) request copies of resolutions or records mentioned in (a) to (d).

The scope of information the shareholders may access pursuant to (g) above can be limited in the articles of association. Furthermore, as mentioned in 1.6 Rights Dependent upon Percentage of Shares, such shareholders with limited liability may be restricted in the exercise of such right if their shareholding is less than 5%.

If the shareholders are denied access to the information, they can start legal action to enforce such right and if the court finds that access to the information should have been granted, the relevant director(s) may be liable to compensate the shareholder for the damages caused and reimburse them for the expenses they have reasonably incurred in.

If the shareholder receives false, incomplete or unclear information in respect of the management, they have the right to seek a court order for the judicial examination of the company, which, following the report of the management, is conducted by a registered auditor. The court may order several remedies on account of discrepancies or irregularities found by the auditor, including the winding up of the company. The applicant shareholder may, however, be called to provide a bond before the examination.

On the other hand, the misuse of information obtained by a shareholder renders the latter liable for the damages caused to the company, even if access to the information was valid.

In general partnerships, further to the rights mentioned above, all the shareholders who are not directors have the right to be informed about the status of the company's businesses and its patrimonial situation. The directors shall also let the shareholders inspect the company’s assets and check the company’s accounts, books and documents. While doing so, the shareholder can be accompanied by professionals.

Furthermore, the shareholders have the right to check the relevant information and documents before the general meeting. After the date when the call notice is sent and published, such access shall take place during office hours and at the registered office of the company and the following can be checked (Section 430):

• all documents essential to consider before making a resolution in respect of any items included in the meeting agenda;
• the text of the proposal that the board of directors, the supervisory board or the sole supervisor has decided to submit to the general meeting;
• the text of the proposal that any shareholder has submitted to the company; in particular, when such shareholder has requested the meeting to be convened; and
• the complete identification and curriculum of people that the board of directors has proposed to take up the company’s corporate positions.

Consultation of the elements mentioned above can be done by the shareholder or anyone who can represent them in the general meeting. The shareholder or their representative can also get a copy of these elements and choose to be accompanied by auditors or professionals when consulting them. The articles of association may allow that all such information be made available on the company’s website, starting from the day when the call notice is issued.

Without prejudice to other matters specially attributed by law to be resolved by the shareholders, in general terms shareholders can resolve on the following issues (Section 216):

• the election and removal of directors and of members of the supervisory board;
• the balance, profit and loss account, and the directors' report;
• the supervisory board or the sole supervisor's report and opinion;
• the application of the financial results of the year;
• the modification of the articles of association;
• the increase and reduction of the company capital;
• the demerger, merger and transformation of the company;
• the winding up of the company; and
• the issues that, according to the law or the articles of association of the company, the other corporate bodies are not competent to approve.

Shareholders of limited liability companies by quotas are further competent to resolve on other matters, such as the exercise of pre-emptive rights, the exclusion of a shareholder from the company, or the calling for quasi-capital contributions.

Contrary to limited liability companies by quotas (in which the shareholders have the right to resolve on matters of management of the company and directors must act in accordance with such resolutions), shareholders of limited liability companies by shares can only resolve on matters of management when specifically asked by the directors to do so.

In particular, directors of limited liability companies by shares are competent to resolve on the following management matters, among others:

• the sale, purchase and charge of assets;
• the provision of corporate and real securities by the company;
• the opening and closure of business enterprises; and
• major changes in the company’s activity.

Shareholders' general meetings are generally called by the chairman of the respective board, with the exception of the first general meeting after incorporation, which shall be called by the shareholders (Section 221). The chairman of the board of the general meeting is elected by the shareholders and, in their absence, the duty shall be undertaken by any of the directors (Section 223).

Should the chairman of the board fail to call a general meeting, when they should have, the directors, the supervisory body or the shareholders who have requested that the general meeting be convened can by law call it directly (Section 221).

Mandatory contents of the call notice are the following (Section 222, paragraph 1):

• the company’s name, registered office and the registration number with the Commercial and Movables Registry Office of Macau;
• the location, date and time of the meeting;
• the type of meeting; and
• the agenda, with details of the topics that have to be decided by the shareholders.

It must also state that the relevant documents are available at the company’s registered office, or, when it is permitted by the articles of association, on the company’s website for the shareholders to check (Section 222, paragraph 2). Please refer to 1.7 Access to Documents and Information regarding the shareholders' entitlements in terms of information when preparing for shareholders' meetings.

If the call notice is not signed by the chairman or any other person with capacity thereto, or if it does not refer to the date, time, location or the agenda, the meeting will be deemed as not called and any resolution passed therein will be deemed null and void.

Pursuant to Section 222, paragraph 3 of the MCC, the general meeting can take place at:

• the company’s registered office, or, if the chairman deems it more convenient, at any other place within the Macau SAR;
• a location outside the Macau SAR, subject to the unanimous agreement of the shareholders; and
• if the articles of association allow it and regulate its respective terms and procedure, the general meeting can take place virtually, by telematics, subject to the assurance of the authenticity and security of the communications by the company.

Except if otherwise is validly stipulated in the articles of association, all shareholders have the right to participate at the general meeting and to discuss, make proposals and vote on any items in the agenda (Section 218). When in a situation of conflict of interests, the shareholder in question shall not vote, neither by themselves nor through a representative (Section 219).

The rules concerning the manner in which the voting rights are attributed to shareholders, when special quorums are required for resolutions by the general meeting and how majorities are formed vary for each type of company (Section 225).

There are matters for which the law requires a special quorum (rather than simple majority) for passing resolutions. The articles of association may also contain any such stipulation.

In limited liability companies by quotas, as a general rule, resolutions on changes to the articles of association, as well as on merger, demerger, transformation and winding up of the company, require favourable votes corresponding to at least two thirds of the capital. Resolutions with regard to other matters (eg, the exercise pre-emptive rights, the exclusion of shareholders and amortisation of their respective shares) only require favourable votes of the majority of the capital if the general meeting resolves in first call, or the majority of the capital present or represented, when resolving on second call (Section 382).

In limited liability companies by shares, resolutions on changes to the articles of association, as well as on merger, demerger, transformation and winding up of the company, require the presence of at least a third of the capital (opening quorum) and favourable votes of at least two thirds of the capital present or represented (deliberative quorum). If resolving in second call, the opening quorum is waived.

In either type of company, if a resolution is not passed with the minimum quorum required by law or the articles of association, it is deemed as not passed.

Whilst the typical way for shareholders to resolve on matters of their competence is through a general meeting, following the rules on respective calling, participation and voting, shareholders may resolve by:

• means of written resolution, as long as all the shareholders declare their vote in a written document that includes the proposal; and
• means of written voting (if expressly set forth in the articles of association), in which case the chairman of the board of the general meeting sends a registered mail containing the actual proposal of the resolution to all the shareholders accompanied by the necessary documents for its respective understanding. The written vote must identify the proposal and declare the direction of the vote.

There is no specific provision in the MCC for electronic voting.

Please refer to 1.8 Shareholder Approval regarding the matters to be included in the agenda and to be resolved by the shareholders.

Please refer to 1.8 Shareholder Approval, 1.9 Calling Shareholders' Meetings and 1.10 Voting Requirements and Proposal of Resolutions. The election and removal of members of a board of directors are resolved by shareholders in a general meeting.

The composition, appointment, removal and duties of the management follow the rules set for each type of company, whereas the first directors must be appointed by the shareholders in the company’s act of incorporation.

In general partnerships, unless otherwise stipulated in the articles of association, all shareholders are directors and only through their unanimous resolution may non-shareholders be elected as directors (Section 345).

In limited partnerships, unless otherwise stipulated in the articles of association, all the shareholders with unlimited liability are directors. The appointment of non-shareholders as directors requires a unanimous resolution of the limited liability shareholders and of two thirds of the limited liability shareholders (Section 353).

In limited liability companies by quotas, the company is managed and represented by one or more directors (or by a board of directors), who can be shareholders or not. The directors are appointed in the act of incorporation or elected through resolution by the shareholders (Sections 383 and 384).

In limited liability companies by shares, the company's management is entrusted to a board of directors composed of a minimum of three directors who can be shareholders or not. The articles of association can also authorise the appointment of substituting directors up to the maximum of three, and their order of precedence should be established in the respective resolution (Section 454).

Please refer to 1.8 Shareholder Approval regarding the different management competence of shareholders (as such, not as directors) of limited liability companies by quotas as compared to limited liability companies by shares.

Please refer to 1.8 Shareholder Approval, 1.9 Calling Shareholders' Meetings, and 1.10 Voting Requirements and Proposal of Resolutions. The election and removal of the members of a board of directors are resolved by shareholders in a general meeting.

General Partnerships

Unless the articles of association regulate to the contrary, directors who are shareholders can only be removed if there is cause, by a resolution approved by the majority of the remaining shareholders, or by a court decision in proceedings initiated by any of those shareholders.

If the company only has two shareholders, or if the shareholder to be removed is appointed as such by a special clause in the articles of association, the removal can only be decided by a court. A director who is not a shareholder can be removed at any time by a shareholders’ unanimous resolution, or by majority only when with cause (Section 345).

Limited Partnerships

Unless the articles of association regulate to the contrary, the directors who are unlimited liability shareholders can only be removed if there is a justified reason, by resolution approved by the majority of the remaining unlimited liability shareholders and the majority of limited liability shareholders, or by a court decision from proceedings initiated by either of those shareholders.

If the company only has one or two unlimited liability shareholders and either of them, or both, are the only directors, the removal can only be decided by a court and with cause. A director who is not a shareholder can be removed at any time by getting the same number of votes necessary for their election, and if there is a justified reason, it is only necessary to get votes from a majority of the shareholders of limited liability and from a majority of the shareholders of unlimited liability (Section 353).

Limited Liability Companies by Quotas

Shareholders can resolve the removal of directors at any time. The articles of association can establish that the removal of one or more directors has to be resolved by a qualified majority. If a shareholder is granted a special right to the management of the company (which must be stipulated in the articles of association), they cannot be removed by a shareholders’ resolution; only by court decision.

Any director can be removed with cause, by means of court decision, or per the request of any other shareholder or director. "Cause" means a material or continuous breach of the directors' duties, understood as the failure or undue delay to register facts or acts that must be registered, the failure to maintain the company's books in proper order and to keep them updated, and the exercise of competing activities (Section 389).

Limited Liability Companies by Shares

A director’s mandate can be terminated at any time by a shareholders' resolution, without prejudice to the compensation rights granted to such director; in particular, if terminated without cause. Besides, shareholders holding 10% or more of the capital may request the court to terminate a director’s appointment with cause at any time (Section 463).

Directors are also liable for the actions made and decisions taken in the exercise of their duties. Please refer to 3.2 Legal Remedies against the Company for actions and remedies against the directors.

The supervisory body is not mandatory for all types of companies. If a company is bound to have a supervisory body, or chooses to have one, the respective duties shall be trusted to either a single supervisor, who must be a registered auditor or an auditing firm, or a supervisory board, composed of three members, one of whom must also be an auditor or audit firm.

The single supervisor or the supervisory board are appointed by resolution of the shareholders in the annual general meeting and, as a general rule, stay in office until the following annual general meeting. The chairman of the supervisory board (when applicable) must be designated by the shareholders as well.

Shareholders may not take the duty of the single supervisor, but may be elected as members of the supervisory board, provided that there is still a place left for an auditor or audit firm (or respective representative).

The shareholders are only entitled to terminate the single supervisor or the members of the supervisory board with cause and subject to prior hearing (Article 241, paragraph 6).

In general terms, companies’ books, correspondence and documents are secret and shall only be disclosed by a court and in the limited cases prescribed in the law.

The identity of companies’ shareholders, though, is available to public consultation at the Commercial and Movables Registry Office in respect of general partnerships, simple limited partnerships and limited liability companies by quotas. The identity of the shareholders of both limited partnerships by shares and limited liability companies by shares is not publicly available at the Commercial and Movables Registry Office. However, in limited liability companies by shares, the identity of the dominant shareholder has to be disclosed in the published annual report (Article 472).

In certain situations expressly set forth in the law, the company may be under the obligation to report, to a certain extent, the identity of its shareholders and the changes in its respective shareholding structure. For example, gaming concessionaires are bound to publish a list of their qualified shareholders (holding shares representing 5% or more of the respective share capital) every year, as per Section 31, paragraph 1, subparagraph 1 of Law 16/2001; credit institutions must also publish a list of their qualified shareholders annually, as per Section 75, paragraph 1, subparagraph g) of Decree Law 32/93/M.

Shareholders are entitled to constitute liens or charges over their shares in companies’ capital, within the limitations set forth in the law and in the articles of association (where applicable). The constitution of liens or charges over shares of gaming concessionaires is subject to prior authorisation from the government, as per Article 17, paragraph 7 of Law 16/2001.

Limitations on the disposal of shares vary depending on the type of company in question, without prejudice to the limitations that may be agreed upon in the articles of association (within the limits of the law).

In general partnerships, any shareholder who wishes to transfer their share (the transferor) must obtain prior unanimous consent from the other shareholders to complete an inter vivos transfer of the shares (Section 337).

In limited partnerships, the transfer (inter vivos or mortis causa) of shares of unlimited liability shareholders requires unanimous consent from the remaining unlimited liability shareholders as well as a resolution passed by the majority of the limited liability shareholders; on the other hand, inter vivos transfers of shares by limited liability shareholders require a favourable resolution by the majority of all the remaining shareholders (Section 354).

In limited liability companies by quotas, unless there is a stipulation to the contrary in the articles of association, there are no restrictions for the inter vivos transfer of a quota (Section 367). The transfer shall be documented in writing, with certification of signature by a notary and further registration. However, the transfer is only effective vis-à-vis the company after being communicated in writing (Section 366).

Transfers of shares of limited liability companies by shares incorporated by means of public subscription shall be unrestricted, except in respect of those shares that shall be subscribed and paid by the underwriter (Section 407). Transfers of shares of limited liability companies by shares, in general, are only subject to the limitations expressly set forth in the articles of association (eg, pre-emptive right of the existing shareholders). Such limitations shall be expressly referred to in the shares’ scripts.

At the end of the financial year, if the directors find that the company’s net asset value (NAV) is lower than half of the nominal value of the registered share capital, the directors shall call the matter to the attention of the shareholders and propose the winding up of the company or the reduction of its respective share capital, unless the shareholders pay an amount necessary to reinstate the company’s NAV up to the nominal value of its registered share capital (such payment to occur within 60 days from the resolution passed by the shareholders on the directors’ proposal). As a general rule, the matter shall be discussed and subject to a vote in the annual general meeting.

If the directors do not act in the manner so prescribed, or the shareholders do not pass either of the resolutions above, any shareholder or creditor may, at any time the capital situation persists, request the winding up of the company at court. However, the shareholders may still replenish the capital within 90 days after receiving a summons (citação) to the court proceedings (Section 206).

Besides, if a shareholder suspects the existence of material irregularities in the company’s activity, they may request a judicial examination to assess the substantiation facts from the court. If the court verifies the existence of any such irregularity, it may order the winding up of the company, should that be the most adequate remedy (Section 211, paragraphs 1 and 6).

A resolution or court decision to wind up the company has the result of putting the company into liquidation (Section 316). As a result of the company’s liquidation, shareholders are entitled to share the remaining assets (if any) in the manner described in the articles of association or, in the absence of any such stipulation, as prescribed in the MCC (first, for reimbursement of the cash contributions, pro rata to the shareholder's share in the company’s capital).

There are no changes to the relevant laws and regulations as a result of the COVID-19 pandemic.

Please refer to 1.8 Shareholder Approval and 1.11 Shareholder Participation in Company Management in respect of shareholders' competence in matters of management. Shareholders of limited liability companies by quotas retain the right to resolve on management matters and directors must respect such decisions; hence, a shareholder or group of shareholders with the required voting rights (in particular, where the law or the articles of association may require qualified majorities to resolve) may to a great extent direct the management of the company as they deem convenient.

Shareholders of limited liability companies by shares are generally prevented from passing resolutions on matters of management and may only do so, aside from the specific matters set forth in the law, when requested by the directors. Hence, their activism usually takes place indirectly, by means of the exercise of voting rights (eg, in respect of the appointment and removal of directors), the access to the company’s business information, the request for a judicial examination of the company’s activities, or the commencement of judicial proceedings to enforce liability against directors.

Please refer to 1.6 Rights Dependent upon Percentage of Shares, 1.7 Access to Documents and Information and 1.10 Voting Requirements and Proposal of Resolutions. The exercise of the rights mentioned above – such as the right to participate in, and vote at, general meetings or the right to request information from the management in respect of the company’s business – is (or may be) limited to a minimum shareholding position.

Similarly, only unlimited liability shareholders or shareholders holding 10% or more of the capital may file an action to seek liability against directors (Section 248).

The rights and mechanisms described in 2.1 Legal and Regulatory Provisions are set forth in the law and/or in companies’ articles of association, hence they are enforceable. It is common to have court actions for the enforcement of various such rights, such as the right to information or to seek liability against directors.

Shareholders and their respective advisers are aware of the existence and enforceability of the above rights and make use of them as necessary or convenient.

It is a common situation in the day-to-day business of Macau companies that shareholders with majority voting rights (or majority shareholders) take decisions that may not suit the interests of the remaining shareholders, while minority shareholders may either group with others to vote differently, or use eventual blocking rights in matters that require qualified majorities.

There is no significant recent change in the level of shareholders' activism.

The most common interest shareholders pursue is to secure a majority of the capital, or at least a majority of the voting rights, in order to take decisions on key matters of the company to the extent permitted by law and the articles of association, and/or to appoint the companies' governing bodies. Access to information is also a key goal of shareholders; in particular, in order to assess the adequacy of the management’s conduct and financial results.

Their agenda may be of a financial (increasing their share in the company’s annual net profits, or blocking a capital variation) or non-financial nature, as would be the case of pursuing a company’s restructuring or blocking certain major transactions.

One of the strategies that shareholders may adopt to build their stake in a company is to establish a shareholders' agreement among those who can form a majority, or a blocking minority, in the company. Please refer to 1.5 Shareholders' Agreements/Joint-Venture Agreements regarding the matters that can and cannot be covered by such agreements, as well as the terms of respective enforceability.

Beside shareholders' agreements, another strategy that can be used by an activist shareholder to increase their stake in the company is to provoke, and vote in favour of, a capital increase when they expect that the remaining shareholders (or a significant part of them) will not be able, or interested, to exercise their right to contribute pro rata, therefore being diluted.

Another strategy that may be used by activists is to procure changes in the company’s management team.

There has not been a noticeable change in these strategies and agendas as a result of the COVID-19 pandemic.

There are no particular industries or sectors that have been recently targeted by activist behaviour.

Although it may happen in the near future, there currently is no stock exchange in the Macau SAR; hence, local companies are not targets in view of the variation of their stock price. It is known that holding companies of several high-profile Macau-based companies, such as the gaming concessionaires, are listed on the Hong Kong Stock Exchange, but it has not been reported that either of them has recently been the subject of any such activism.

There are no particular active groups or active shareholders, as the phenomenon is not a feature in the Macau SAR jurisdiction. These are matters of private nature for private entities and there are only rare cases of public attention in their respect.

There is no particular data released in respect of the fulfilment of activist demands in the Macau SAR jurisdiction.

The position or mechanisms available to the company vary with the particulars of the interests and agenda of the shareholders in question.

The company must assess whether the shareholder is misusing or misrepresenting certain corporate rights. If the shareholder is found to be rightfully exercising their rights, the company shall endeavour to comply with the relevant provisions set forth in the law and the articles of association.

Similarly, when shareholders make decisions on management matters in a legal and binding manner, directors shall comply with, and adequately and conveniently implement, them.

In matters that substantially affect the company’s business, management members shall act in a reasonable manner and avoid disputes with the shareholders, sharing information with them in advance and/or inviting them to find a resolution on the matter, even if not legally required.

Companies incorporated and registered in the Macau SAR have separate legal personality, distinct from that of their shareholders, from the moment of registration of their respective act of incorporation in the Commercial and Movables Registry Office (Section 176).

A reference must be made to Sections 188 to 190 of the MCC, regarding the effects of the actions performed before the registration and the relationships between shareholders and vis-à-vis third parties.

Upon registration, the company shall reimburse taxes and fees incurred in the context of the registration procedure and the directors may also undertake to settle other related expenses incurred prior to registration, if they so decide, and accordingly notify the provider/creditor within 30 days.

Upon registration, subject to the above-mentioned deadline, the company undertakes the rights and obligations resulting from actions performed in its name beforehand, waiving the direct liability of those who would otherwise be liable for such actions.

Notwithstanding the above, the act of incorporation produces some effects immediately upon execution (in other words, before registration is completed):

• the relationships between shareholders are governed by the articles of association and the legal provisions applicable to the type of company in question; and
• if business was commenced, those who acted on behalf of the company, as well as the shareholders who may have authorised such people, are personally liable for such actions, where such liability is joint and unlimited (without prejudice to a possible waiver, in the terms described in the previous paragraphs).

Only in very limited situations may the company’s personality be waived and some shareholders be personally and directly responsible vis-à-vis the company or the remaining shareholders: situations where the MCC calls for the liability of dominant shareholder(s) (Section 212) and when it calls for the liability of the sole shareholder (Section 213). Please refer to 3.3 Legal Remedies against the Company's Directors.

Companies act through their directors, attorneys and representatives. Shareholders are allowed to file lawsuits if there are any unlawful actions or omissions by corporate bodies, attorneys and representatives, in the terms prescribed in Sections 245 to 251 of the MCC. Although action against a director, attorney or representative to seek their liability vis-à-vis the company may be brought directly by shareholders, only those who bear unlimited liability or hold 10% or more of the share capital are entitled to do so. That, however, does not affect the minority shareholders' right to seek compensation for their own personal damages under the general terms of the civil law.

Directors are not liable vis-à-vis the company if the above actions or omissions are made in the context of the execution of a resolution passed by the shareholders, unless such resolution was passed upon a director’s proposal or if the respective execution is the result of fraud.

Please refer to 3.3 Legal Remedies against the Company's Directors for more details on the matter of compensation claims against directors.

Unlawful resolutions passed by shareholders are also subject to invalidation, either by declaration of nullity or annulment with regard to procedural or substantive irregularities, in the cases specified in the law (Sections 228 and 229).

As a general rule, a declaration of nullity may be pursued by all shareholders, whilst irregularities sanctioned with annulment may only be argued before a court by shareholders:

• who participated in the general meeting and voted without the winning majority in an unlawful resolution;
• who were illegally prevented from participating in the meeting; or
• who failed to participate because the meeting was not properly convened.

Annulment proceedings shall be started within 20 days from the date on which the resolution is passed, or the date on which the shareholder had knowledge of the resolution if they have been irregularly prevented from participating in the meeting (Section 229, paragraphs 1 and 3). Differently, an action shall be filed up to five years after the date of registration of the respective resolution for the situations the law sanctions with nullity (Section 228, paragraph 3).

Shareholders may also seek interim relief by requesting the suspension of a shareholders' resolution or of its respective effects (Section 232).

The MCC and the Civil Procedure Code further provide for special legal mechanisms and special forms of procedure for the enforcement of shareholders’ rights, such as the judicial examination of the company, the appointment, suspension or removal of members of corporate bodies and the provision of information. These remedies are available to minority shareholders.

Lastly, shareholders may, subject to the verification of the requisites set forth in the law, resolve on the winding up of the company – in particular, by filing for bankruptcy – and in such context pursue the inhibition of its respective directors to continue doing business or undertaking duties as members of corporate bodies in any other companies.

Where the management of the company belongs to a board (as is the case with limited liability companies by shares, and may be the case with limited liability companies by quotas, if so chosen by the shareholders), resolutions are subject to annulment or declaration of nullity in similar terms to those described in 3.2 Legal Remedies against the Company. That was also confirmed by Awards 848/2009, 981/2009, 878/2012 and 73/2014 of the Court of Second Instance and by Award 71/2012 of the Court of Final Appeal. However, depending on the particulars, decisions by non-collegial management may also be challenged and their respective execution prevented by the shareholders.

There are two other sets of legal remedies to be adopted by shareholders against the directors:

• the dismissal of directors during their office term; and
• compensation claims due to the breach of legal or statutory duties.

Regarding the termination or dismissal of directors, as a general rule all directors can be removed by simple majority at any time even without any justified reason, unless the director is a shareholder with a special right to management. In this exceptional case, the dismissal is only possible with cause (Section 389, paragraphs 1 and 3 and Section 463).

In general partnerships, if the directorship is undertaken by the shareholders, directors are only subject to dismissal with cause; otherwise, the dismissal can occur at any time without any reason (Section 345, paragraphs 3 and 5). In limited partnerships, the dismissal of directors who are unlimited liability shareholders can only occur with cause and with the quorum rules set forth in 1.12 Shareholders' Rights to Appoint/Remove/Challenge Directors, or by a court.

Compensation claims against directors to cover losses resulting from the breach of legal or statutory duties may be started upon resolution of the shareholders in a general meeting, by simple majority, and within three months from the date of resolution. A shareholders' resolution such as this implies the dismissal of the targeted directors (Section 247, paragraphs 1 and 2). While the company does not resolve to, and/or does not, start such action, shareholders with 10% or more of the capital may do so.

Shareholders are further entitled to initiate a claim against company directors seeking compensation for the damages caused directly to them, and not as a mere reflection of their shareholding position in the company (ie, the loss of profits). Direct actions against directors are available to minority shareholders as well.

There is a mechanism by virtue of which minority shareholders can claim compensation against the dominant shareholder of a company for the damages caused by the abuse of their position of dominance.

In respect of the definition of a "dominant shareholder", the MCC states that it is an individual or entity that, by itself or together with other companies controlled by it, or with other shareholders by means of a shareholders' agreement, holds a majority stake in the share capital of the company, holds more than half of the voting rights, or has the ability to elect a majority of the members of management (Section 212, paragraph 1).

Pursuant to Section 212, paragraphs 2 and 3, the dominant shareholder may have to compensate the company and the minority shareholders when:

(a) knowing that the individual is morally or technically incapable of complying with the duties, they elect them as directors or members of a supervisory board;

(b) they induce a director, a manager, an attorney, a member of a supervisory board or a secretary to practise an unlawful act;

(c) they enter into contracts with a company they dominate in favourable and discriminatory conditions, to their own benefit or to the benefit of a third party;

(d) they induce the directors of the company to enter into contracts with third parties in favourable and discriminatory conditions, to their own benefit or to the benefit of a third parties; or

(e) they pursue the approval of resolutions with the purpose of obtaining an undue advantage, for themselves or for a third party, to the detriment of the company, other shareholders or creditors thereof.

Shareholders who intentionally compete with their votes for the approval of the resolution in (e) above are jointly liable alongside the dominant shareholder for the damage caused, whilst the directors, managers, members of the supervisory board or secretary who contribute to the situations mentioned in (b), (c), (d) and (e) above are liable to the company and minority shareholders in the same terms as the dominant shareholder (Section 212, paragraphs 4 and 5).

Another remedy available, when a shareholder acts in a manner that causes relevant harm or damages to the company, is their exclusion, which may take place in the terms and subject to the conditions set forth in the law or the articles of association, or when ordered by a court. Further to being excluded from the company, the defaulting shareholder may have to indemnify the company for the damages caused.

Although such remedy is expressly set forth in the MCC only for general partnerships (Section 342) and limited liability companies by quotas (Section 371), there are grounds to sustain that such mechanism may also be used for limited liability companies by shares, subject to the verification of certain particulars.

The dismissal of any members of the supervisory board – inter alia, the auditor or auditing firm – is only allowed with cause. The single supervisor or the member of the supervisory board shall be given the opportunity to explain themselves in the general meeting convened to resolve on the proposal of respective dismissal.

The single supervisor or the members of the supervisory board are liable vis-à-vis the company and the creditors for the damages caused by their respective actions or omissions. Such liability may be joint with that of the directors, for actions or omissions of the directors, if the damages resulting therefrom would not have been verified were the supervisors to exercise their supervision duties with due care and attention (Sections 245 to 250 ex vi termini Section 251).

As a general rule, an action to seek a director’s liability shall be brought before a court by the company upon resolution of the shareholders. While the company does not act in such a manner, shareholders holding 10% or more may start an action in which the company shall be summoned as a party. Please refer to 2.1 Legal and Regulatory Provisions and 3.3 Legal Remedies against the Company's Directors.

Shareholders resort to the courts to enforce their rights and, in certain situations, leverage their position vis-à-vis other shareholders, as a way to buy them out or be acquired.

An action to obtain access to information may have different purposes, as it may be simply to assess a shareholder’s financial rights (eg, proper accounting of revenues and expenses, and proper assessment of the distributable results of the financial year) or to be up to date in respect of transactions substantial to the company’s business progress and future.

Court actions against directors for damages are usually only a last resort and most of the time do not benefit the company or the shareholders much, due to the reduced chances of enforcing a favourable decision as a result of the amount of monies usually involved in the affected transactions or of the fact that the directors are no longer in the Macau SAR.

Interim injunctions for the suspension of a company’s resolutions are common in Macau; in particular, to prevent the execution of major, sometimes cross-border, transactions (eg, related to real estate).