Alerts
Bill of Law aims to regulate liability of shareholders and managers for company’s debt
Pending presidential sanction, the Bill of Law No. 3401/2008 (“Bill of Law”) has been approved by the House of Representatives of Brazil on November 22, 2022, governing requests to extend liability to shareholders and managers for companies’ debts.
The Bill of Law’s text aims to secure the right of prior defense of the shareholder or manager in case of request for disregard of legal personality filed by a creditor, thus complementing rules already established in the 2015 Brazilian Code of Civil Procedure.
Please find below a summary of the main topics that the Bill of Law aims to regulate:
Objective request: the Bill of Law sets forth a requirement of objective specification of the acts that would justify shareholders’ or managers’ accountability for the application to be processed;
• Defense deadline: 15 days for the shareholder or manager to present defense against the claim;
• Necessary requests: the judge shall not extend the liability without a creditor’s or Public Prosecutor’s request;
• Possibility of payment by the company: before the ruling that extends the liability to the shareholder or manager, the Court is required to grant the debtor-company the opportunity to pay or secure of the debt;
• Immediate effect: the Bill of Law provides that its provisions, if enacted, will immediately apply to all pending proceedings, in any degree of jurisdiction.
Our Dispute Resolution team remains available to clarify any questions on the matter.
