The passing of a partner represents a major event for both the remaining partners and the deceased’s heirs.
After all, the entry of heirs into the company goes far beyond patrimonial issues, but will reflect on the mutual trust and the desire for partnership among the original partners, elements that may be compromised by the entry of heirs who often do not have the same strategic alignment or the necessary qualifications for the continuity of the business.
Brazilian law allows corporate documents to establish guidelines for succession events, ensuring greater predictability and mitigating conflicts between those involved. The treatment to be given will depend on the type of company, the provisions set forth in the documents governing the company and the succession planning strategies adopted by the company, which must be previously determined by the original partners.
As a general rule, if there is an omission in the corporate documents, the succession will be regulated by the legal provisions, which provide for the liquidation of the deceased partner’s share and the payment of assets to the heirs, in the case of limited liability companies. In public limited companies, succession occurs automatically, since shares are freely transferable. In privately held companies, there may be restrictions on the trading of shares, which will require a detailed analysis of the articles of association and the legal alternatives available.
It is important to understand, however, that regardless of the type of company, partners may choose different succession structures, as long as the Brazilian courts requirement is met, which requires a written provision regarding any possibility that differs from the alternatives provided for by law. If there is a written provision, they will be considered valid and cannot be questioned, either by the remaining partners or by the heirs.
There is no doubt that succession planning is essential in Brazil to avoid disputes and mitigate conflicts and risks. Anticipating these scenarios not only preserves the assets and interests of the company and its partners, but also ensures a structured transition aligned with the strategic objectives of the business.
