May 2023

_the may│2023 edition of our Newsletter has the following highlight:

– Change in jurisprudence on the exclusion of partners in limited liability companies


_ Change in jurisprudence on the exclusion of partners in limited liability companies


The understanding of the Judiciary on the flexibility of the exclusion of minority partners from limited liability companies due to simple disagreements with other partners has faced changes with decisions that have established the reinclusion of partners who have proven the inexistence of relevant errors causing the exclusion.


Pursuant to article 1,085 of the Civil Code, when partners representing more than half of the corporate capital decide that one or more partners are endangering the continuity of the company, due to acts of undeniable gravity, they may exclude them from the company.


In the previous interpretation of said provision, the simple breach of affectio societatis (subjective element involved in the incorporation of a company which entails the partners’ intention to enter into a partnership between them) was used as argument for exclusion of a partner.  Disagreements between partners were enough to justify said decision. However, recent judgments of the São Paulo State Court of Justice (proceedings No. 1000422-16.2021.8.26.0068, No. 1018472-86.2019.8.26.0577 and No. 1128795-76.2015.8.26.0100) and even of the Superior Court of Justice (REsp 1.129.222-PR) have been rendered in a contrary manner, in view of the inexistence of a serious fault that would justify the exclusion of the partner.


This change in jurisprudence supports the guarantee of freedom of expression by minority partners, who previously could be subject to the exclusion from the company for expressing an idea contrary to the other partners. Thus, recent decisions aim to reduce abuses by majority partners in limited liability companies. According to minister Nancy Andrighi, in order to judicially exclude a partner, it is not enough to allege a breach of the affectio societatis, but rather to demonstrate just cause, that is, the reasons that caused such a breach (REsp 1.129.222-PR).


Therefore, the new jurisprudential interpretation of article 1,085 of the Civil Code, traces a new path, which aims to ensure the best interests of the company by demanding proof of acts of undeniable gravity to allow the exclusion of a partner.


May 2022

_the may│2022 edition of our Newsletter has the following highlight:

– Controversy regarding separate election in publicly held companies

– Former partner’s liability for debts of a limited liability company

– Brazilian Securities and Exchange Commission sanctions managers of a publicly held company for irregularities in a Shareholders’ Meeting

_Controversy regarding separate election in publicly held companies


The season for ordinary shareholders’ meetings is approaching and several companies, in addition to approving the management accounts and the financial statements, must deliberate on the election or reelection of directors for a new term. Considering the several modalities of elections that can be adopted, a matter that usually leads to different interpretations is the applicability of the separate election in publicly-held companies.


The separate election of a member of the board of directors, contemplated in paragraph 4 of article 141 of the Brazilian Corporation Law, is a mechanism to protect minority shareholders and aims to ensure their representation on the board of directors. This structure is applicable only to publicly held companies and exclusively to minority shareholders that provide evidence of uninterrupted ownership of their shares in the company during the three months immediately prior to the shareholders’ meeting in question. For the separate election to be applicable, the uninterrupted ownership of shares must be of 15% of the voting capital or 10% of the capital stock, nevertheless, the Brazilian Securities and Exchange Commission(“CVM“) understands that, for companies that only issue voting shares (common shares), the percentage of 10% applies.


Diverse interpretative currents

The controversy regarding the applicability of the separate election arises at the moment that shareholders of corporations  without a controlling shareholder or defined block of control, consider electing separately a member of the board of directors, exercising this right guaranteed by the Brazilian Corporation Law. CVM has not yet expressly stated its position on the matter, and, therefore, two interpretative currents may be identified.


Although this issue is rarely addressed in a specific and public manner by legal experts, who end up discussing the matter in individual opinions and consultations with clients, many believe that the adoption of the mechanism of separate election presumes the existence of a controlling shareholder or a defined block of control. For many of them, as a mechanism to protect minority shareholders from abuses by controlling shareholders, it would be contradictory that the separate election could be adopted in a company without a defined controlling shareholder, since there would be no shareholder to be prevented from participating in such separate election. In other words, in this case, if there is no controlling shareholder, all shareholders could qualify as “minority” in the separate election.


Nevertheless, some legal experts argue that the adoption or not of the separate election mechanism in companies that do not have a controlling shareholder, or a defined block of control should be analyzed on a case-by-case basis, taking into consideration the company’s capital structure and the behavior of the shareholders with greater preeminence in management over time. The defenders of this position argue that the adoption of separate election would make sense in case the relevant minority shareholder has participation exceeding the legal quorums (of 10% and 15%) and the power to elect alone the majority of the members of the board of directors in a certain meeting (or all of them, in the case of election of a short list).


Despite the discussion, in practice there are publicly held companies that do not even provide the questions related to the separate election in the remote voting bulletin, as is the case of B3. And according to public information, none of them have been questioned about this practice so far.


CVM has already expressed its position on the topic indirectly in the analysis report of the public hearing on the amendment of CVM Instruction No. 481, released on December 20, 2017. At the time, the Commission acknowledged that the distance voting bulletin items regarding the separate election may not be applicable to all companies, but did not expressly agree that such a mechanism could not be adopted generally by corporations without a controlling shareholder.


Until CVM is provoked to specifically address the issue more clearly, the discussion is likely to continue.


The text above was published in Portuguese in the Legislação & Mercado section of Capital Aberto on March 15, 2022, and can be accessed through the link below:


_Former partner’s liability for debts of a limited liability company


The liability of a partner after selling its quotas in a limited liability company or the dissolution of the company is often discussed.


The Brazilian Civil Code establishes that the assigning partner is jointly liable with the assignee, before the company and third parties, for the obligations it had as a partner, up to two years after the amendment to the articles of association regarding its withdrawal from the company.


It is important to emphasize that this legal provision does not constitute an unlimited, unrestricted, joint and several liability of the assignor partner for any debts of the company. It constitutes, however, the liability of the assignor for the obligations it had as a partner, and the obligations of the partner are not to be confused with the obligations of the company itself.


As a rule, the liability of each partner is limited to the value of their quotas and all are jointly and severally liable for the payment of the capital stock. In other words, as a general rule, partners and former partners are not liable for the debts of a limited liability company.


As stated in the Brazilian Civil Code, “the patrimonial autonomy of legal entities is a legal instrument of risk allocation and segregation, established by law with the purpose of stimulating undertakings, for the generation of jobs, taxes, income, and innovation for the benefit of all”.


However, in certain specific cases, limited liability company’s creditors may resort to the assets of the partners (and former partners) to settle debts, among which we highlight the piercing of the corporate veil.


Recently, the Superior Court of Justice (STJ) decided that in the case of former partner liability arising from the piercing of the corporate veil, the former partner is not accountable for the company’s debts incurred after its formal withdrawal, even if the debts refer to the period of two years after its withdrawal. In this case, it was understood that the two-year period provided for in the Brazilian Civil Code is the time limit for collection from the partner for obligations assumed prior to its exit.


Although this STJ decision is not binding, it is extremely relevant, because in several decisions from different courts, including the STJ itself, the liability of withdrawing partners has often not been restricted to the period in which they still held ownership.


In another STJ judgment, which discussed the possibility of holding the partners and their personal assets liable for the remaining debt owned by a company that was regularly terminated, the court considered that in limited liability companies, after paying-in the capital stock, the partners are not liable with their personal assets for the debts owed by the company, so that the succession depends intrinsically on proof of the existence of positive net equity and its effective distribution among the partners.


Therefore, there is no increase in the former partner’s liabilities at the time the partner withdraws from the limited liability company, there is only a time limitation on the collection for applicable obligations related to the time of their participation in the company.


The text above was published in Portuguese in the Legislação & Mercado section of Capital Aberto on April 20, 2022, and can be accessed through the link below:


_Brazilian Securities and Exchange Commission sanctions managers of a publicly held company for irregularities in a Shareholders’ Meeting


On April 26, 2022, the Brazilian Securities and Exchange Commission (“CVM“) judged the Administrative Sanctioning Proceeding (“PAS“) CVM SEI No. 19957.003922/2020-50, filed by the Superintendence of Company Relations (“SEP“) to ascertain supposedly abuses of officers during a shareholders’ meeting.


At the time, the controlling shareholders, who were also the chief executive officer and vice president of the company, voted and approved their own accounts as managers, indirectly through other companies controlled by them, aside from an abusive compensation for themselves, in non-compliance with Law No. 6.404/1976 (“Brazilian Corporation Law“).


The defendants argued that the legal prohibitions for approving the accounts would affect only the person of the manager and not companies of which they were shareholders and questioned the conclusion of the technical area regarding the allegation of abusive compensation, declaring that the values approved were in in line with market practices and with the competence and experience of the managers.


In her vote, Reporting Officer Flávia Sant’Anna Perlingeiro, in line with CVM precedents, reinforced that the prohibition imposed on managers for the approval of their own accounts, provided for in articles 115, §1 and 134, §1 of the Brazilian Corporation Law, should affect the legal entities controlled by them in cases where it is not possible to dissociate the will of a particular shareholder, legal entity, from the influence of the shareholder-manager, who is prevented from deliberating on his own accounts, as it was confirmed in the present case.


Regarding the approval of abusive compensation for their own benefit, the Reporting Officer stated that in cases where the compensation of managers is discussed, the commission must interpret article 152 of the Corporation Law, which provides that the compensation of managers must be fixed considering their responsibilities, the time dedicated to their functions, competence and professional reputation and the value of the services in the market, as a beacon. Since it will be from these criteria that the values of the global or individual compensation will be formulated and justified, concluding that, the performance of the controlling shareholder who approves the compensation in disagreement with such guidelines may constitute an abuse of the power of control in the light of article 116 , §1 of the Corporation Law.


In the case under analysis, it was found that the defendants received high compensations when compared to the company’s revenue, and during two fiscal years the remuneration exceeded the company’s revenue, which, according to the Reporting Officer, given the absence of consistent justification in meeting the social interest, reveals a clear disproportionality, even more so considering the company was facing financial difficulties, in a scenario of negative net equity and the impossibility of distributing dividends.


Nevertheless, the Reporting Officer’s acknowledged that the company’s revenue will not always be an adequate criterion for determining the existence of abuse in setting the managers’ compensation, given that the circumstances of each case are relevant to elucidate the fundamentals of compensation and whether they adhere to the social interest.


Finally, CVM’s Board unanimously decided to sentence each of the company’s managers to pay R$210,000.00 (two hundred and ten thousand reais) for the approval of their own accounts and R$ 425,000.00 (four hundred and twenty-five thousand reais) regarding the approval of abusive compensation.


The full text of PAS CVM SEI 19957.003922/2020-50 can be accessed in Portuguese through the following link:

May 2021

_the may│2021 edition of our Newsletter has the following highlight:

– Decision of the Superior Court of Justice points out the necessary formalities for the transfer of shares in a privately held company

_ Decision of the Superior Court of Justice points out the necessary formalities for the transfer of shares in a privately held company


When ruling on the Special Appeal No. 1.645.757, the Brazilian Superior Court of Justice (“STJ“) was asked to decide, at the buyers’ request, on the declaration of absence of a corporate relationship, termination of a share assignment agreement, as well as the return, by the sellers, of the amounts paid due to said agreement, under the argument that the buyers never, in fact, became shareholders of the company because the term of transfer of shares was not drawn up in the corporate book of registration of transfer shares.


In addition, it was alleged that the share assignment agreement provided for the said drawing up in the aforementioned corporate book, and such failure implied in the noncompliance with the obligations established in the agreement, giving rise to its termination.


In the vote of the reporting minister, Mr. Ricardo Villas Bôas Cueva, it was pointed out that Law 6,404/1976 (“Brazilian Corporation Law“) itself, in addition to the doctrine and STJ jurisprudence, provide that the transfer of shares only operates through a transfer deed drawn up in the book of registration of transfer of shares, which must be dated and executed by the assignor and assignee, therefore, the agreement entered into by the parties, by itself, does not count as title to the shares.


In addition, considering that neither the Brazilian Corporation Law nor the agreement established a time limit for drawing up the transfer term in the proper book, the reporting minister pointed out that it would be necessary to define from which moment the absence to execute such transfer deed would characterize the default of the obligations set forth in said agreement.


The reporting minister concluded that, in the absence of a fixed term in the law and in the agreement, the default is only established after the debtor is notified to comply with the obligation, and buyers cannot, from the outset, request the termination of the agreement without giving the opportunity to draw up said transfer deed.


Finally, we emphasize the importance of the formalities involved in this type of transaction, in addition to the execution of an agreement.



More information regarding the Special Appeal No. 1.645.757 can be accessed in Portuguese through the link below:



May 2020

_the May│2020 edition of our Newsletter has the following highlights:

– Board of Trade of the State of São Paulo resumes its activities

– Digital Shareholders’ Meetings during COVID-19 Pandemic

– Brazilian Securities and Exchange Commission regulates debenture holders’ meetings

– Decree No.10.278/2020 establishes techniques and requirements for scanning public or private documents

– Resolution No. 55/2020 simplifies the opening of startups under the Inova Simples regime

_ Board of Trade of the State of São Paulo resumes its activities

The Board of Trade of the State of São Paulo (“JUCESP”) resumed its activities on May 12, 2020, in accordance with official public health regulations.

The opening hours are from 8am to 4pm, by appointment. To ensure social distance, services will be rendered by post or drive-thru. If the delivery of documents is made by post, the protocol numbers will be sent by e-mail and, in the event of further requirements, JUCESP will allow people to schedule an appointment for withdrawal.

Thus, for the purposes of the provisions of article 6 of Provisional Measure No. 931/2020, since May 12, 2020, the term for filing corporate acts before JUCESP which were executed from February 16, 2020, has started (for purposes of retroacting the effects of filing to the execution date, pursuant to Article 36 of Law No. 8.934/1994).

For more information on JUCESP’s services during quarantine in Portuguese, access:

_ Digital Shareholders’ Meetings during COVID-19 Pandemic

The virtual shareholder’s meeting of limited liability companies, cooperatives, closed and publicly-held companies, made possible by Provisional Measure No. 931/2020 (“MP 931”) and regulated by the National Department of Business Registration and Integration in its Normative Instruction No. 79/2020 and by the Brazilian Securities Commission in its Instruction No. 622/2020 (“ICVM 622“), have become an excellent alternative for holding general meetings in a period of social distancing.

In an article published by “Valor Econômico” Newspaper on April 30th, 2020 a survey on publicly-held companies was presented, showing that 19 meetings had already been called to be entirely held digitally, while 20 other companies had called hybrid meetings, in which it is possible to attend the meeting physically or digitally. Although there has been no survey regarding virtual meetings on closed corporations, as well as limited liability companies and cooperatives, the possibility of carrying out corporate resolutions, especially regarding the approval of the management’s accounts and financial statements and the distribution of dividends, without shareholders exposure to a potential contamination by the new coronavirus, it is an alternative that meets the economic and health interests of the shareholders and, in this sense, tends to be used with profusion in Brazil.

Nevertheless, when choosing to hold a virtual shareholders’ meeting, certain additional precautions should be taken by managers. Starting with calling the meeting, which should point out the possibilities of remote participation, until its installation, with additional care for a correct identification of shareholders, as well as the resolutions, which should be taken in platforms which allow for debates, clarifications and decision making, the management of the company will have to act with exceptional diligence on holding this kind of meeting, in order to ensure the proper exercise of shareholders’ rights. 

Although such innovations have come from an urgent need of companies to adapt their legal obligations to the exceptionality of a pandemic, it is worth highlighting that virtual meetings are gaining strength to become a permanent option for companies in Brazil, as it already happens in other countries. 

_ Brazilian Securities and Exchange Commission regulates debenture holders’ meetings

On May 14th, 2020, the Brazilian Securities and Exchange Commission (“CVM”) issued Instruction No. 625 (“ICVM 625”), after holding a public hearing, in order to regulate participation and remote voting by holders of debentures in their meetings, as well as holders of promissory notes and certificates of real estate or agribusiness receivables.

The debenture holders’ meeting provided for in article 71 of Law 6.404/76 (“Brazilian Corporate Law”) was not regulated by CVM until the edition of ICVM 625, with only a few specific provisions in CVM Instruction No. 583/2016. The need for a specific instruction for this matter arose in the scenario of the new coronavirus pandemic, in line with Provisional Measure 931/2020 and the recent amendment to CVM Instruction No. 481/2009.

We emphasize that, in addition to the expansion of the scope provided for in the public hearing to cover securities issued by companies not registered before CVM and which issued securities in a public offer with restricted efforts under the terms of CVM Instruction No. 476/2009, ICVM 625 provides that the responsibilities attributed to the issuing company or the fiduciary agent are related to which of these agents has called the meeting and that the minutes of the meetings must indicate the number of votes for and against and abstentions in relation to each proposal on the agenda, showing the division by series, when applicable.

ICVM 625 came into force on the date of its publication, i.e. May 15, 2020, and can already be applied to meetings of existing securities holders, including those that have already been called, except in cases where the issuance deed expressly prevents remote voting.

ICVM 625 can be accessed in Portuguese at:

_ Decree No. 10.278/2020 establishes techniques and requirements for scanning public or private documents

On March 19th, 2020, Decree No. 10.278 (“Decree No. 10.278/2020”) was published in the Union Official Gazette to establish the technique and requirements for scanning public or private documents, so that the scanned documents have the same legal effects as original documents.

In accordance with article 2, the Decree No. 10.278/2020 is applicable to scanned documents that are produced by (i) public legal entities, even if it involves their relationship with private entities and by (ii) private legal entities or natural persons before (a) public legal entities or (b) other private legal entities or natural persons.

In addition, article 4 of Decree No. 10.278/2020 provides that the procedures and technologies used in the scanning of documents must ensure the integrity and reliability of the document, the traceability and auditability of the used procedures, the technical scanning standards, confidentiality, when applicable and interoperability between computerized systems.

As far as the specific requirements for scanning documents are concerned, in order for them to be compared to physical documents before a pubic legal person, the scanned documents must (i) be digitally signed with digital certification under the Brazilian Public Key Infrastructure (Infraestrutura de Chaves Públicas Brasileira – ICP-Brasil) standards; (ii) follow the minimum technical standards provided for in Schedule I of said Decree and (iii) contain, at least, the metadata specified in Schedule II of said Decree.

Regarding documents that involve private entities or individuals, any means of proving authorship, integrity and, if necessary, the confidentiality of scanned documents, will be valid, as long as defined by mutual consent or accepted by the person to whom the document is opposed. If there is no agreement between the parties, the same rules and requirements listed above will apply, as if the document were to be presented before a public legal person.

After the scanning process is carried out as provided for in the Decree, the physical document may be discarded, except for those which content has an historical value.

Finally, regarding the storage of such scanned documents, the following must be ensured: (i) the protection of the scanned document against changes, destruction and, when applicable, against unauthorized access and reproduction and (ii) the indexing of metadata which allows (ii.a) the location and management of the scanned document and (ii.b) checking the scanning process adopted. Scanned documents whose content does not have an historical value shall be stored, at least, until the expiry of the statute of limitations or lapse of rights to which they refer.

The Decree No. 10.278/2020 can be accessed in Portuguese through the link below: 

_ Resolution No. 55/2020 simplifies the opening of startups under the Inova Simples regime

On March 24th, 2020, Resolution No. 55 was published in the Union Official Gazette by the National Network Management Committee for Simplification of Registration and Legalization of Companies and Businesses (Comitê para Gestão da Rede Nacional para s Simplificação do Registro e da Legalização de Empresas e Negócios – CGSIM), which provides a simplified special procedure for the Simple Innovation Company – Inova Simples (“Resolution No. 55/2020”), established by Complementary Law No. 167, of April 24th, 2019.

Resolution No. 55/2020 aims at defining the procedure for incorporating, amending and liquidating companies under the Inova Simples regime, which will take place in a simplified and automatic way, in the Web Portal of the National Network for the Simplification of Registration and Legalization of Companies and Businesses (“Portal Redesim”). The Portal Redesim will provide a digital form to be filled out and, after filling it out, the National Registry of Legal Entities (CNPJ) number will be automatically issued (according to article 3, second paragraph of Resolution No. 55/2020).

Under the terms of article 4 of Resolution No. 55/2020, the legal status of Simple Innovation Company is exclusive to the Inova Simples regime. Therefore, the transformation of an entity that already exists for the Simple Innovation Company is forbidden. However, it is allowed to request the transformation of the Simple Innovation Company into other types of companies.

Finally, it is worth mentioning that Resolution No. 55/2020 will only come into force after 240 days as of the date of its publication, i.e. on November 19, 2020.

The Resolution No. 55/2020 can be accessed in Portuguese through the link below: