By: Vitor Ferrari and Ivan Kubala

In December 2022, President Jair Bolsonaro (PL) fully vetoed Bill 3,401/08, whose legal text provided for changes to the Institute of Disregard of Legal Personality, a procedure already provided for in the national legal system and through which the personal nature of the business corporation is temporarily removed, and only in exceptional cases, to directly affect the assets of its partners and administrators in the event that they use the company's personality to commit abuse or fraud.

The proposed bill provided that disregard of the legal personality could be used when there were illicit maneuvers on the part of the company's owners to avoid paying their creditors. In these cases, the personal assets of those responsible would be used to pay off the debt.

Furthermore, the proposal aimed to establish a specific procedure for disregarding legal personality, in which both the contrary and full defense were assured, moments in which the defendant could defend himself against the accusations and produce the evidence he deemed necessary. Today, although the institute is provided for by law, there is no specific regulation to guide it.

According to the president himself, even though the legislator's intention is good, the text of the bill goes against the public interest, since the topic is already duly legislated in both the Civil Code and the Code of Civil Procedure, and the institution of a procedure other than that already provided for in the legislation would bring legal uncertainty regarding which model to apply..

It should be noted that disregarding the legal personality is an exceptional measure. The temporary and exceptional removal of the legal personality of a business corporation only occurs in very specific cases, such as abuse of rights, excess of power, violation of law, breach of contract or fraud against creditors.

Therefore, there is no need to talk about disregarding the legal personality in the case of unsolvable debts, especially when there is limited liability of the partners and other directors of the company.

It is important to note that, although disregarding the legal personality is horrible for the partner held liable, not all partners and directors of the company will be liable with their personal assets if the company's personality is disregarded. Only those responsible for the disregard will be liable with their assets., so as to blame only those who implemented the institute.  Therefore, it is clear that disregarding the legal personality is an exceptional measure, only applying to specific cases and affecting those who have committed the crimes.

With the collaboration of Luis Felipe Simão.