Articles of association. The Third Panel of the Superior Court of Justice (STJ) concluded that the limitation period applicable to a request for annulment or setting aside of amendments to the articles of association, in a case in which the contractual nature was recognized, is four years, being governed by Article 178 of the Civil Code of 1916, in force at the time the amendments were made.
According to the partners who filed the action, a series of amendments was made to the company’s articles of association, registered with the Commercial Registry between 1994 and 1996. The irregularities allegedly erroneously modified the partners’ ownership percentages, as a result of monetary restatement.
Read also:
Liability of a company before the Tax Authorities after the death of a partner
The representation of the now-deceased partner, accused of having committed irregularities, argued that the amendment relating to the shares is justified by the restoration of the participation of one of the partners, who did not complete the paying-in of a promised property.
According to the case records, the action was filed in August 2001. The court of first instance found the claim time-barred under Article 286 of the Brazilian Corporations Law (Lei das S.A.), that is, it adopted the two-year period. In their appellate arguments, the partners contended that there was no limitation because Article 442 of the Commercial Code, with a 20-year period, would be applicable to the situation.
The reporting justice of the case, Justice Nancy Andrighi, explained that the Corporations Law deals with the period relating to the annulment of resolutions taken at a general or special meeting, which is not the case here. Nor does the 20-year period provided for in the Commercial Code apply, as it deals specifically with claims relating to the default of commercial obligations contracted by public or private deed by a company.
“In view of the absence of elements in the records indicating that the contractual amendments which the appellants seek to set aside originated from resolutions taken at any kind of partners’ assembly, the two-year limitation period of Article 286 of the LSA is not applicable to the hypothesis,” the reporting justice clarified.
As for the rules provided in the Commercial Code, the justice explained that they do not fit the situation under analysis, because there is no discussion regarding commercial obligations, “since what is at issue here is a claim for the invalidation of amendments made to the articles of association.”
Deadline to amend the articles of association
In light of this analysis, the Third Panel of the STJ concluded that, in this case, Article 178, paragraph 9, item V, of the 1916 Civil Code applies, which establishes that an action to annul or rescind contracts is time-barred after four years, since it concerns a request for the regularization of corporate amendments in which error or simulation occurred.
“Even though the articles of association constitute a rather peculiar type of contract, the application of the general rules of civil law to its regulation cannot be ruled out – even if it is beyond doubt that not every rule relating to the formation, default, and extinction of contracts in general applies –, especially when, as in the particular case, there is an absence of specific legal provision regarding the controverted matter,” the justice concluded.
Source: STJ
← Back to blog