Camila Vieira Guimarães
Lawyer at Marcos Martins Advogados
Brazilian legislation has given different treatment to legal entities and their partners, each of whom has their own rights and obligations, which are not to be confused (principle of autonomy of assets).
Doctrine[1] has set out the requirements for the incorporation of a legal entity: i) human will, understood as the intention to create an organization different from that of its members; ii) compliance with the requirements demanded by law, being the constitutive act and competent registration; and iii) lawfulness, with the object of the incorporation of the legal entity having to be of a legal nature, with an unlawful object being cause for the extinction of the legal entity.
It so happens that, since the beginning, there has beenundue use of the legal entity as an instrument of fraud and illicit enrichment, as a means of shielding the individual, thus requiring the creation of the institute of disregard of the legal personality.
The Civil Code of 2002[2] established this institute in its article 50:
Art. 50. In the event of abuse of the legal personality, characterized by misuse of purpose or confusion of assets, the judge may, at the request of the party, or of the Public Prosecutor’s Office when it is its responsibility to intervene in the proceedings, disregard it so that the effects of certain and determined relations of obligations are extended to the private assets of administrators or partners of the legal entity benefited directly or indirectly by the abuse.
§Paragraph 1 For the purposes of this article, misuse of purpose is the use of the legal entity for the purpose of harming creditors and for the commission of illicit acts of any kind.
This is an exceptional measure that allows for the breakdown of the autonomy of the legal entity, provided that abuse of the legal personality, characterized by misuse of purpose or confusion of assets, is duly proven .
In civil executions, there is an indiscriminate use of the institute of disregarding legal personality, and the various possibilities for executing the assets of legal entities listed in the Civil Code and the Code of Civil Procedure are not exhausted .
In an important decision, the Paraná Court of Justice (TJPR) upheld a decision that rejected an incident of disregarding the legal personality in a contract termination and restitution action, given that the incident was brought under the allegation of irregular closure of the defendant company, as well as unsuccessful execution.
The 5th Civil Chamber of the TJPR held that, in the case in question, the only evidence in the case file was the mere insufficiency of the defendant company’s assets and attachable cash, an insufficient requirement for the incident to be brought. Furthermore, it has not been proven whether the irregular closure of the defendant company was due to misuse of purpose or confusion of assets.
There is no denying the importance of the legal personality disregard institute for the Brazilian legal system, especially to safeguard the satisfaction of creditors in the face of bad faith debtors, but the fact is that the institute must be used sparingly.
Mere insufficiency of attachable assets does not give rise to the use of the institute, and there are, above all, other legal avenues for attempting to satisfy the credit, without using the exceptional measure as a rule.
Marcos Martins Advogados reaffirms its commitment to excellence in the provision of legal services, advising its clients on the indication of legal institutes capable of ensuring greater security and identifying potential risks and benefits.
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[1] GONÇALVES, Carlos Roberto. Direito civil esquematizado, v. 1. 2. ed. – São Paulo: Saraiva, 2012.
[2] BRASIL. Law n. 10.406, January 10, 2002. Establishes the Civil Code. Federal Official Gazette, Brasília, DF, January 11, 2002. Available at: http://www.planalto.gov.br/ccivil_03/leis/2002/l10406compilada.htm> Accessed September 11, 2020.
