Tax | Former Managing Shareholder Is Personally Responsible for the Taxes of Irregularly Closed Company in Brazil

The managing shareholder/administrator at the time of the irregular dissolution of a Brazilian company is liable with his personal assets for the company’s debts.

This is the most recent position of the Brazilian Superior Court of Justice (STJ) delivered in judgment that must be followed by the lower courts.  

The irregular dissolution of a company occurs when it ceases to operate, and stops providing information to government agencies (tax authorities, Board of Trade, etc.), neither about its situation nor about its closure.  

It is important to note that the existence of an active company, but without operation, is not prohibited, as long as it continues to provide information to tax authorities. What characterizes irregular dissolution is the company failing to provide such information. 

The decision also made it clear that the managing shareholder who left the company, on a regular basis, prior to its closing is not responsible for the taxes, even if the triggering events occurred during the period of his administration. The responsibility lies solely with the managing partner at the time of the irregular closing. Unless, of course, it is characterized as fraud. 

Because of this, the correct compliance with corporate acts is very important. With the inclusion and departure of administrators mirrored in corporate documents in an always updated way. 

It is common for nascent companies, startups, companies with accelerated growth, or even common companies, ravaged by day-to-day obligations, to fail to reflect the reality of their operation in documents. However, correct compliance with such obligations is important to avoid tax risks to the partners’ personal assets.


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