With the new Code of Civil Procedure, the disregard of corporate personality, or in other words, the inclusion of the natural persons of the shareholders in the process, whether through knowledge or enforcement, should be preceded by an adversarial system. That is, the defendant and its shareholders should be subpoenaed to respond to the process and produce evidence before any decision, which undoubtedly represents respect of the constitution, hitherto undermined by hasty and authoritarian decisions, without, however, the thorough examination of any eventual act of contempt that could justify the measure.

Although originating in the United States in 1809 in the case of Bank of Unites v. Devaux upon the sentence of Justice Marshall, it was in England that the “disregard doctrine” was applied and spread worldwide in the case of Salomon v. Salomon & Co. In Brazil, it began to expand and be applied after the Rubens Requião conference held at the University of Paraná at the end of the 1960’s.

Although an institute created and developed for restricted application, solely in cases in which fraud or legal abuses have been proved, the Brazilian courts have widened its application, which has been generating losses and disturbances to the shareholders of companies in debt, without attributing the right measure of liability to the management.

Another serious distortion resulting from its uncontrolled application arises from disrespecting the individual equity of the shareholders, especially in limited companies where the liability of each shareholder is restricted to the value of their shares, precisely for entrepreneurs to invest in business activity without compromising their personal assets.

A healthy measure!

By Roberto Sergio Scervino