Approves The Legal Framework Of The Local Business Sector, Revoking Law No 58/98 Of 18 August

Original Language Title: Aprova o regime jurídico do sector empresarial local, revogando a Lei n.º 58/98, de 18 de Agosto

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Read the untranslated law here: http://app.parlamento.pt/webutils/docs/doc.pdf?path=6148523063446f764c3246795a5868774d546f334e7a67774c336470626d6c7561574e7059585270646d467a4c316776644756346447397a4c33427762446b784c5667755a47396a&fich=ppl91-X.doc&Inline=false

1 PROPOSAL of law No. 91/X explanatory memorandum to the amendment of the legal framework for the Local Business Sector is a priority of the XVII constitutional Government. There are several reasons for this option. In fact, the local companies are an essential tool in the development of public action, allowing a flexible approach which is not possible according to the rules of the State administrative action. On the other hand, and given the permanent movement of decentralization, the number of assignments to the municipalities has been increasing, with predictable and desirable that such movement to continue and intensify. In this context, there are many gestionárias decisions to adopt the business model, as a way of achieving efficient municipal competencies. In view of the exponential development of the number of local companies, as well as the qualitative diversity adopting, it is essential to undertake a modernization of the applicable legal regime in order to make it more modern, efficient and adapted to the legal traffic. The modernization imperative is also behind need to harmonise the legal framework for the Local Business Sector with Business Sector of the State Regime, and with the Commercial companies code. In fact, there is no justification for that, currently, local businesses are subject to a legal regulation model distinct from that applicable to public undertakings of the State and to back off unjustifiably of general corporate law. When the specialty is not justified, the adoption of the General principles becomes mandatory. Indeed, the adoption of the General legal regulation models has several virtues, as it allows a standardization of procedures and an effective managerial accountability for managing local business. On the other hand, local entrepreneurship should be limited to the scope of municipal assignments. In principle it is not acceptable for the development of local entrepreneurship in areas where private business traffic is fully effective in meeting the needs of citizens. Under these conditions, any intervention agencies have necessarily private motivation 2 1 and not public, which contradicts the principle of subsidiarity. In this context, and in view of the recent developments in Community law, the corporate object of the municipal companies must be calibrated in substantive and not a merely formal. Legal-financial qualification of the objects of local companies pass the answer primarily to the type of activity carried out, which has inevitable repercussions at the level of the rules applicable to public procurement and accounting for any operating deficits. Thus, all forms of collective organisation for business-are renewed to the legal framework for the Local Business Sector, while so-called municipal companies foro essentially are administrative arrangements Public Sector renewed site. This is the only way to safeguard the principle of reality over appearance. On the other hand, and given the characteristics of the various forms of business organization, the broad adoption of diverse forms of intra and inter-business collaboration, allowing the adoption of models of mixed economy and public-public partnerships and private audience is essential, without infringing the competition rules and the obligation of impartiality in the choice of partners. Thus, the inadequacy of the current legal regime of municipal and regional companies can be seen in a double perspective. On the one hand, there are problems arising from the application itself to a degree that does not respond effectively to the problems of public enterprises, public capital companies and private equity firms mostly public; on the other, there is a concept of company which does not apply to corporations created under corporate law and therefore are not subject to a minimum set of public rules as legally provided for the State or other public entities State, when they hold the majority of the capital or of the voting rights, or the possibility to appoint or dismiss a majority of the members of the administrative or supervisory body. In this way, adopts a broad concept of local business sector: it integrate the municipal companies, InterCity and Metro area; This law aims to regulate all activity of the municipalities in the form of enterprise, including stakes in partnerships with public and private entities. Similarly, the legal definition of local company is huge, and all societies formed under the commercial law, in which the municipalities, associations of municipalities and 3 metropolitan areas of Lisbon and Porto can exercise a dominant influence, directly or indirectly, as well as local business entities-legal persons governed by public law with business nature, assembled exclusively public capital local or regional scope (intermunicipal). As for the subject, there are three types of municipal companies:-undertakings entrusted with the operation of services of general interest;
-undertakings entrusted with the promotion of local and regional development;

-undertakings entrusted with the operation of concessions. Presiding over the creation of local businesses and your activity the principle of transparency: the creation of local firms, or taking of shares conferring dominant influence depends on the completion of a preliminary study of economic and financial viability, in which must be identified and quality gains resulting from the development of rationality added activity through a business entity; the activity of local companies is regulated by contract management (in the case of undertakings entrusted with the operation of services of general interest) or by contract-program (in the case of undertakings entrusted with the promotion of local and regional development), contractual instruments that define, in detail, the terms of the contractual relationship, maxime your object, necessity, the purpose and the efficiencies and effectiveness resulting from the conclusion of the relevant contract; establishes a principle of prohibition of compensation and operating subsidies; accountability mechanisms envisaged by the authorities ' negative results of local companies; relevance is attributed to debts of companies for the purpose of calculating the limits of municipal debt, if not supported the negative results. Between the municipalities and the local business sector there is a system of autonomy: the municipal shareholder function is carried out through the issuance of guidelines; dedicates the rule of incompatibility between the exercise of executive functions in the local authorities and local companies; and established limits to the remuneration of local managers.

So: under d) of paragraph 1 of article 197 of the Constitution, the Government presents to the Assembly of the Republic the following Bill: 4 CHAPTER I General provisions article 1 Scope 1-this law establishes the legal regime of the local business sector. 2-the system provided for in this Act applies to all business entities constituted under the rules applicable to associations of municipalities and the metropolitan areas of Lisbon and Porto.

Article 2 local 1 Business Sector-the local business sector is part of the municipal companies, InterCity and Metro area, hereinafter called ' undertakings '. 2-commercial companies jointly controlled by various public bodies are in the business sector of aggregate public sector holdings, holds the largest participation.

Article 3 municipal companies, InterCity and Metro area 1-Are municipal companies, InterCity and Metro area companies formed under the commercial law, in which the municipalities, associations of municipalities and metropolitan areas of Lisbon and Porto, respectively, may exercise directly or indirectly a dominant influence by virtue of any of the following circumstances: the Detention of most of the capital) or of the voting rights; b) right to appoint or dismiss a majority of the members of the administrative or supervisory body. 2-are also municipal companies, InterCity and Metro area business nature regulated entities in Chapter VII of this law.

5 article 4 member companies 1-municipalities, associations of municipalities and the metropolitan areas of Lisbon and Porto, may constitute member companies by quotas laid down in commercial law. 2-Any of the entities referred to in the preceding paragraph may still constitute a limited company of whose shares is the only holder, pursuant to commercial law. 3-the Constitution of a public limited-liability company pursuant to paragraph unipessoal must comply with all other requirements for the formation of public limited liability companies.

Article 5 objects 1-companies have obligatorily subject to the holding of activities of general interest, the promotion of local and regional development and the management of concessions, being prohibited the creation of companies for the development of administrative activities exclusively or predominantly market order. 2-cannot be created, or subsidiaries, under municipal, metropolitan or intermunicipal whose aims do not enter within the tasks of the municipality or Association of municipalities. 3-the provisions of the preceding paragraphs shall apply to mere participation in commercial companies in which exert a dominant influence within the meaning of this law.

Article 6 legal framework companies governed by this law, by the respective statutes and, in the alternative, by the business sector and the standards applicable to commercial companies.

6 article 7 management principles the company management should link up with the objectives pursued by the respective public entities participating in the share capital, aiming at the satisfaction of needs in the general interest, the promotion of local and regional development and the efficient exploitation of concessions, ensuring your economic viability and financial stability.

Article 8 Establishment


1-the creation of enterprises, as well as the decision of acquisition of shares conferring dominant influence in terms of this Act, shall: a) the municipal scope, on a proposal from the City Council, the municipal Assembly; b) intercommunal concern, on a proposal of the Governing Board, to the House and intermunicipal assent of the municipal assemblies of the municipalities members; c) the metropolitan-wide, on a proposal from the Board of Metropolitan, Metropolitan Assembly, with assent of municipal assemblies of the municipalities. 2-the creation of enterprises or the decision to acquire a social participation conferring dominant influence within the meaning of this law shall be communicated to the General Inspectorate of finance, as well as the regulator of the sector. 3-the Constitution of companies contract must be in writing, unless required solemn form for the transmission of goods which are the subject of the entries. 4-where the companies are incorporated by public deed, is also the private notary of the municipality where the company has your thirst. 5-the competent registry office must, ex officio, at the expense of the company, communicating the Constitution and the statutes, and the relevant amendments, the Public Ministry 7 and ensure their publication in accordance with the provisions of the Código das Sociedades Comerciais. 6-the name is accompanied by the indication of your municipal or intermunicipal nature Metropolitan (in, EIM, EMT). 7-The electronic site of the Directorate-General of local authorities is set out in a list, permanently updated, of all local business entities.

Article 9 economic and financial Viability and economic rationality 1-under penalty of nullity and of financial responsibility, the decision to create the companies, as well as the decision-making of a participation that dominant influence should always be preceded by the necessary technical studies, including project plan, on investment, exploitation and funding, demonstrating the economic viability of the units which identify the quality gains and rationality due to development activities added through a business entity. 2-the allocation of subsidies or other financial transfers from the participating entities in the social capital requires the signing of a management contract, in the case of pursuing general interest purposes, or of a contract-program, if your subject if you integrate within the local or regional development function. 3-in the case of the company to benefit from a special or exclusive right as defined in article 3 of Decree-Law No. 148/2003, of 11 of July, this advantage must be accounted for to Scouting of your financial viability. 4-The studies referred to in paragraph 1, as well as the draft statute accompany proposals for creation of and participation in companies, being the subject of consideration by the competent deliberative bodies.

Article 10 entry for the competition rules 1-companies are subject to the General rules of national and Community competition. 8 2-relationships between companies and entities participating in the capital cannot work situations that, in whatever form, are likely to prevent or distort competition in whole or in part of the national territory. 3-companies are governed by the principle of financial transparency and your accounts must be organized in order to allow for the identification of any financial flows between them and entities participating in the share capital, ensuring compliance with national and Community requirements on competition and public aid. 4-the provisions of paragraphs 1 and 2 shall be without prejudice to the derogations duly justified special, where the application of the General rules of competition is likely to frustrate, in law or in fact, the missions entrusted to local businesses entrusted with the operation of services of general economic interest.

Article 11 sectoral Regulation The local business sector entities that pursue activities within regulated sectors are subject to the regulatory powers of the respective regulatory authority.

Article 12 procurement rules and choice of private partner 1-Without prejudice to the provisions of the applicable Community rules, companies must adopt mechanisms for transparent and non-discriminatory procurement, ensuring equal opportunities to interested parties. 2-selection of private entities shall apply the procedures set out in concursais legal regime of concession of public services concerned and, in the alternative, in public procurement legal systems in force, which best fits with the activity to continue. 3-the award shall be admissible only in exceptional situations provided for in applicable degrees, in accordance with the preceding paragraph.

9 Article 13 prohibit Compensation are not acceptable any forms of farm subsidies, investment or supplement the equity participations which are not provided for in the preceding articles.

Article 14 public-private partnerships public-private partnerships developed by the companies referred to in this law shall apply the regime of Decree-Law No. 86/2003, of 26 April, with the necessary adaptations.

Article 15 Function shareholder rights of the holders of the capital are exercised, respectively, through the City Council, the Governing Board of the Association of municipalities or Metropolitan Board, in accordance with the guidelines laid down in the following article.

Article 16 strategic guidelines


1-are defined strategic guidelines relating to the exercise of shareholder function in companies covered by this law, in accordance with the following paragraph, and should the same be reviewed, at least with reference to the term of Office of Directors fixed by their Charter. 2-the competence for the adoption of the strategic guidelines belongs:) in municipal companies, to City Hall; b) Intercity companies, the Governing Board; c) Metropolitan enterprises, to the Metropolitan Board. 10 3-strategic guidelines referred to in the preceding paragraphs define the objectives to be pursued in order to promote local and regional development or the form of continuation of services of general interest, containing quantified targets and contemplating the conclusion of contracts between public authorities and local business sector corporations, referred to in articles 19 and 22 of this law. 4-the strategic orientations should be reflected in the annual guidelines set out in General Assembly and management contracts to be concluded with the managers.

Article 17 1-delegation of powers to the municipalities, associations of municipalities and the metropolitan areas of Lisbon and Porto can delegate powers in companies incorporated by them or mostly reported under this law, provided that the record of the statute expressly. 2-in the cases referred to in the preceding paragraph, the statutes of the company define the prerogatives of undertaking performing any of the functions of the authority, in particular in the context of supervisory powers.

CHAPTER II undertakings entrusted with the operation of services of general interest article 18 undertakings entrusted with the operation of services of general interest for the purposes of this law, shall be deemed to be undertakings entrusted with the operation of services of general interest to those whose activities are to ensure the universality and continuity of the services provided, the satisfaction of basic needs of citizens, economic and social cohesion and regional and local protection of users without prejudice to the economic efficiency and respect for the principles of non-discrimination and transparency.

11 article 19 guiding principles undertakings entrusted with the operation of services of general interest should continue the missions they are assigned in order, as the case may be, of: a) provide the services of general interest in local or regional constituency, without discrimination of rural areas and the interior; b) promote access of the majority of citizens, balanced financial conditions, essential goods and services, to the extent possible, to adjust the fees and charges due to the real situations of users, in the light of the principle of equal material; c) Ensure that the requirements of the provision of universal services in relation to economic activities whose access is legally forbidden to private companies and other entities of the same kind; d) Ensure the provision of services or the management of activities that require huge investments in the creation or development of infrastructure or distribution networks; and to ensure the effectiveness of management) of public services, seeking, inter alia, that the production, transportation and distribution, infrastructure construction and the provision of such services set proceed in articulate, taking into account the organizational modifications imposed by technical or technological innovations; f) Fulfil specific obligations, security-related, with the continuity and quality of services and the protection of the environment, and should these obligations be clearly defined, transparent, non-discriminatory and likely to control.

Article 20 1-management contracts for the provision of services of general interest by the local business sector companies depends on the conclusion of management contracts with the participating entities. 2-The contracts referred to in paragraph 1 defines in detail the grounds of the necessity of the establishment of the contractual relationship, the purpose of the 12 same relationship as well as the effectiveness and efficiency to be achieved with the same, implemented a set of indicators or benchmarks that allow to measure the achievement of sectoral objectives. 3-the development of pricing policies of which held annual operating revenues lower than the annual costs is objectively justified and depends on the adoption of cost accounting systems where you identify the difference between the development of the activity at market prices and the subsidized price on general interest. 4-the development of pricing policies in accordance with the preceding paragraph depends on prior negotiation with public shareholders of the terms governing the financial transfers needed to finance the annual activity of general interest, which are set out in the management contract.

CHAPTER III undertakings entrusted with the promotion of local and regional development article 21 Companies responsible for local and regional development promotion 1-for the purposes of this Act, shall be deemed to be undertakings entrusted with the promotion of local or regional economic development those whose activities should ensure the promotion of local and regional economic growth, eliminating asymmetries and strengthening economic and social cohesion regional or local without prejudice to the economic efficiency and respect for the principles of non-discrimination and transparency. 2-undertakings entrusted with the promotion of local or regional economic development can develop activities that fall within the scope of responsibilities of the entities, namely: a) serves the promotion, maintenance and conservation of urban infrastructure and urban management; b) renovation and urban rehabilitation, management of built heritage and promotion of urban and rural development; c) real estate management and promotion of social housing; d) Qualification and training; 13 and) development of local and regional benefits; f) Promotion and management of collective equipment and provision of educational services, cultural, sports, recreational, health and tourism; g) structures and the provision of support services for the elderly, children or disadvantaged citizens.

Article 22 guiding principles


Undertakings entrusted with the promotion of local or regional economic development must proceed the missions they are assigned in order, as the case may be, of: a) Conform, adjust and transform the socio-economic order in local or regional constituency, without discrimination of rural areas and the interior; b) Promote local and regional economic growth, supporting the activities and own Valances, eliminating asymmetries in the national territory; c) Develop business activities in territorial and regional constituency, integrating them in the context of structural economic policies of technological development and distribution networks; d) Promote risk investments and innovative entrepreneurial activities; e) optimize the resources from programs of national and Community financial support; f) Ensure the provision of services or the management of activities that require huge investments in the creation or development of infrastructure; g) comply with specific obligations, security-related, with the continuity and quality of services and the protection of the environment and quality of life, and such obligations be clearly defined, transparent, non-discriminatory and likely to control.

Article 23 Contracts-1 program-undertakings entrusted with the promotion of local or regional economic development must conclude contracts-program where you set your aim and 14 in detail the mission as well as the functions of local and regional economic development. 2-The programme contracts shall apply the provisions of paragraphs 2, 3 and 4 of article 20, and of them exist in the amount of the mandatory contributions that companies have the right to receive in return for the obligations undertaken.

CHAPTER IV Firms entrusted with the operation of article 24 grants Undertakings entrusted with the operation of concessions for the purposes of this law, shall be deemed to be undertakings entrusted with the operation of those concessions that, not integrating in the previous rankings, have as their object the management of concessions awarded by public authorities.

Article 25 1 guiding principles-undertakings entrusted with the operation of concessions should continue the missions assigned to them, without prejudice to the economic efficiency and respect for the principles of non-discrimination and transparency, submitting fully to competition standards. 2-undertakings entrusted with the operation of concessions should conclude contracts with public entities with grantors and the concessionaires, which identify the rights and obligations of the grantor that are assumed by the concessionaires, as well as the supervisory powers which remain in public. 3-is not allowed any form of financing on the part of the participating entities to undertakings entrusted with the operation of concessions.

Chapter V economic and financial Regime article 26 15 1-financial control companies shall be subject to financial control designed to ascertain the legality, economy, efficiency and effectiveness of your management. 2-Without prejudice to the powers conferred by the law to the Court of Auditors, the financial control of companies it is the Inspectorate General of Finance. 3-companies adopt adequate internal control procedures to ensure the reliability of the accounts and other financial information, as well as the articulation with the entities referred to in the preceding paragraph.

Article 27 special duties of information without prejudice to the provisions of commercial law as regards the provision of information to the holders of shares, should the companies provide the following elements to the City Council, the Governing Board of the Association of municipalities or Metropolitan Board, as appropriate, with a view to your monitoring and control: a) drafts of plans annual and multiannual activity programmes; b) drafts of annual budgets, including estimation of financial transactions with the State and local authorities; c) annual accounting documents; d) quarterly reports of budgetary implementation; e) any other information and documents requested for the monitoring of the situation of the company and of your activity, with a view, in particular, to ensure the sound management of public funds and the evolution of your financial situation.

Article 28 sole auditor oversight is exercised by an auditor or audit firm carrying out the statutory audit, responsible for, among other things: 16 a) Supervise the action of the Board of Directors; b) verify the correctness of the books, records and documents that support them; c) Participate to the competent bodies any irregularities, as well as the facts that consider developers of serious difficulties in achieving the object of the company; d) Proceed to the verification of assets values of the company, or received as collateral, deposit or other title; and Mail to the executive body every six months), the Association of municipalities or in, as appropriate, information on the economic and financial situation of the company; f) rule on any subject of interest to the company, the request of the Board of Directors; g) formulate an opinion on the provisional management tools, as well as on the Board of Directors report and accounts for the financial year; h) issue an opinion on the value of the compensatory allowances received by the company; I) issue the legal certification of accounts.

Article 29 accountability Documents


1-the instruments of accountability of companies to be drawn up annually with reference to December 31, are as follows, without prejudice to other laid down in their statutes or in other legal provisions: a) balance sheet; b) income statement; (c)) notes to balance sheet and income statement; d) statement of cash flows; and) of companies capital participation and funding in the medium and long term; f) report on the implementation of the multi-annual investment plan annual; g) Board of Directors report and proposed application of results; 5:00 pm) auditor's opinion. 2-the report of the Board of directors should allow a clear understanding of the economic and financial situation on the exercise, examining the evolution of the management of the company's activity sectors, in particular with regard to investments, costs and market conditions, and enjoy your development. 3-the auditor's opinion must contain an assessment of the management, as well as the report of the Board of Directors and the assessment of the accuracy of the accounts and of compliance with the laws and bylaws. 4-the annual report of the Board of Directors, the balance sheet, the income statement and the auditor's opinion shall be published in the Municipal Bulletin and one of the most read newspapers in the area. 5-the accountability of enterprises is carried out in accordance with relevant legislation.

Article 30 Reservations 1-businesses should constitute the reserves and funds provided for in the respective statutes, being, however, mandatory legal reserve imposed in the commercial companies code, and the organs competent to decide on the application of results to decide the Constitution of other reserves. 2-the Constitution of the legal reserve shall be assigned an annual allocation of not less than 10% of the net profit or loss for the year less the amount required to cover losses carried forward. 3-the legal reserve may only be used for incorporation in the capital or to cover losses carried forward. 4-the statutes may provide for the use of reserves subject to restrictions.

CHAPTER VI financial consolidation 18 article 31 1-accounts balance companies annual balanced results in operating activities, investing and financing. 2-Notwithstanding the provisions of paragraph 5 of this article, in the case of annual operating result increased operating financial burdens if present negative is mandatory for a financial transfer to the partners in proportion to their social participation with a view to balance the operating operating results for the year in question. 3-public partners of the companies provide in their annual budgets the estimated amount necessary to cover the annual operating losses plus finance charges that are your responsibility. 4-in the case of the annual budget of the year in question does not contain enough money to cover the losses referred to above, must be entered a supplemental budget in the budget of the following year, making the transfer in the month following the date of closure of the accounts. 5-whenever the balance of the company can only be gauged multiannual perspective covering the entire period of the investment, is presented to the General Inspectorate of Finance a forecast plan demonstration maps of net cash flows on multi-year balance updated the results of exploitation. 6-in the situation provided for in the preceding paragraph, public participants in the share capital of companies provide in their annual budgets the estimated amount required to cover the financial variances recorded in the annual operating result plus financial charges in respect to initial map which are of your responsibility, in terms similar to those provided for in paragraphs 3 and 4 of this article. 7-is allowed to correct the forecast plan demonstration maps of net cash flows since the participants proceed to financial transfers necessary for the support of any accumulated losses as a result of deviations to the forecast plan.

19 article 32 1-Loan borrowings by businesses are to the limits of the debt capacity of municipalities in case of non-compliance with the rules laid down in the preceding article. 2-is prohibited lending businesses in favor of participating entities and as guarantees of loans or other debts. 3-a participant may not grant loans to companies in the local business sector.

CHAPTER VII local Business Entities article 33 1-Constitution, municipalities, associations of municipalities and the metropolitan areas of Lisbon and Porto can be legal persons governed by public law, with business nature, hereinafter known as ' local business entities». 2-the contract of Constitution of local business entities must be in writing, unless required solemn form for the transmission of goods which are the subject of entries in kind. 3-in cases where companies are constituted by public deed, is also the private notary of the municipality where the local business entity has your thirst. 4-local business entities are subject to registration in accordance with the adjustments that are necessary. 5-the competent registry office must, ex officio, at the expense of local business entity, communicating the Constitution and statutes, as well as the respective amendments to the Prosecutors and ensure their publication under the business registration Act. 20 article 34 Legal Regime 1-entities set up pursuant to the preceding article shall be governed by the rules of this chapter and, in the alternative, by other standards of this Act. 2-to municipal and intermunicipal nature set up pursuant to Decree-Law No. 58/98, of 18 August, existing at the date of entry into force of this law, shall apply the system provided for in the preceding paragraph.

Article 35 independence and legal capacity 1-local business entities have administrative, financial and patrimonial autonomy. 2-the legal capacity of local business entities covers all rights and obligations necessary or convenient to the pursuit of your subject.

Article 36 Designation


The name of the local business entities must integrate the municipal, inter-municipal nature or your Metropolitan («MES», «EEIM», «EEMT»).

Article 37 1 Capital-local business entities have a capital, called ' statutory capital», held by the entities referred to in paragraph 1 of article 32 or by other public bodies, and which is intended to respond to their need. 2-statutory capital can be raised under the conditions laid down in the statutes.

21 Article 38 1 Bodies-administration and supervision of local business entities structure in accordance with the procedures and with the designations laid down for public limited liability companies. 2-management and supervisory organs have generic competences laid down in commercial law, without prejudice to the provisions of this law. 3-the statutes may provide for the existence of another deliberative or consultative bodies, defining the respective competences. 4-the statutes will govern, with compliance with the applicable legal standards, the competence and the mode of appointment of members of the organs referred to in the preceding paragraphs. 5-the statutes may provide for the existence of other organs, consultative or deliberative setting, in particular, their competencies, as well as the mode of appointment of its members.

Article 39 1 Supervision-financial and economic tutelage of local business entities is exercised by local authorities, governing boards of associations of municipalities and the Metropolitan joints, as appropriate, without prejudice to the respective powers of supervision. 2-the tutelage covers: a) the approval of the strategic plans and activities, budget and accounts, as well as appropriations for capital allowances and compensation payments; b) the approval of prices or rates the practice by business entities operating services of general economic interest or exercising their activity under exclusive, unless your definition compete to other independent entities; (c)) The other powers expressly referred to in the Statute.

22 article 40 provisional management tools in the economic management of local business entities is regulated by the following provisional management tools: a) multi-annual and annual activity Plans, and financial investment; b) annual budget; (c) annual operating Budget), broken down into income and budget cost budget; d) annual budget of Treasury; and) a forecast balance sheet.

Article 41 Accounting accounting of local business entities respect the Official Accounting Plan and must respond to the needs of business management, enabling a permanent budgetary control.

Article 42 documents of account the instruments of accountability of local business entities, to draw up annually with reference to December 31, are as follows, without prejudice to other requirements provided for in the statute or in other legal provisions: a) balance sheet; b) income statement; (c)) notes to balance sheet and income statement; d) statement of cash flows; and) of companies capital participation and funding in the medium and long term; f) report on the implementation of the multi-annual investment plan annual; g) Board of Directors report and proposed application of results; h) opinion of the supervisory organ. 23 article 43 restructuring, merger and restructuring 1-extinction, merger or extinction of local business entities within the jurisdiction of the municipality or association responsible for your creation, who is up to set the terms of the liquidation of its assets. 2-local business entities shall be extinguished when the municipality or association responsible for your Constitution has to comply with obligations undertaken by the agencies of the local business entity for which the respective assets is insufficient.

CHAPTER VIII other provisions article 44 staff 1 Status-the status of personnel of enterprises is the contract of employment. 2-the story concerning the collective bargaining governed by general law.

Article 45 1 service commissions-The employees and agents of the central, regional and local administration, including public institutes, can serve in the local business sector entities under earmarked or special-providing, pursuant to general legislation in the field of mobility. 2-Can still serve in the local business sector entities, workers of any public undertakings, in providing occasional regime laid down in the labour code. 3-the framework of local authority services that will be processed in companies, under this law, you can choose between integration within the company or within the municipality, in accordance with the procedure laid down in Protocol 24 to be concluded between the municipality and the company, and may not occur, in any case, loss of pay or of any other right or regalia.

Article 46 1-location Manager Status is prohibited the simultaneous exercise of full-time or part-time duties in city councils and executive duties paid in the municipal companies, InterCity and Metro area. 2-the salaries of members of the management bodies of the undertakings referred to in the preceding article are limited to the remuneration of the mayors of the cities of Lisbon and Oporto.

CHAPTER IX final provisions article 47 of the Statute 1-Adaptation within a maximum period of two years from the date of publication, municipal and intermunicipal enterprises already established should adapt its statutes to the provisions of this law. 2-the provisions of this Act takes precedence over the bylaws of the entities referred to in the preceding paragraph that, within there mentioned, have not been reviewed and adapted.

Article 48 set Standard is revoked the law No 58/98 of 18 August.

25 article 49 entry into force this law shall enter into force on 1 January 2007.

Seen and approved by the Council of Ministers of 27 July 2006 Prime Minister the Minister of Parliamentary Affairs Minister Presidency