News November 26, 2020

Incapacitated Partner – If Not Causing Disruption, Cannot Be Excluded from the Company

Article 1,030 of the Civil Code states that the majority of the members of a business company may request the judicial exclusion of a partner due to “supervening incapacity” – on account of a fact that renders him incapable of performing certain acts of civil life. However, in order to be excluded from the company, it is necessary to prove that keeping the incapacitated partner harms the proper functioning of the company.

The absence of such proof led the 5th Civil Chamber of the Court of Justice of Rio Grande do Sul to uphold a judgment that dismissed a request for the partial dissolution of a company combined with the exclusion of a judicially interdicted partner in the judicial district of Carazinho.

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The defendant in the action, the incapacitated partner, suffers from Parkinson’s disease and is under the guardianship of his wife, who represents him in the company’s patrimonial and business acts. Due to the disease, he no longer carries out work activities, having ceased 10 years ago.

Excluded from the company

According to the initial petition, the plaintiffs requested the exclusion of the defendant based on Article 1,030 of the Civil Code and on the clause of the articles of association, which provides for this possibility in the event of judicial interdiction.

Although the defendant does not hold a management position, they argued that his remaining in the corporate structure causes “disruptions and slowness in negotiations and investments by the company”.

However, they did not manage to prove the actual damages caused by the defendant, as required by Article 373, item I, of the Code of Civil Procedure (CPC).

The sole witness heard in the proceedings did not corroborate the version of the initial pleading, attesting that the company continues to prosper, even recording a considerable increase in revenue. The testimony went against the defense’s thesis, namely that the highly personal activity of the company’s partners is no longer required.

No business damage

Judge Caroline Subtil Elias, of the 1st Judicial Court of the district, emphasized, based on the witness’s testimony, that the manner in which the company provides services remained the same with the inclusion of the figure of the defendant’s curator in the “backstage” of the administration.

In other words, although some specific slowness may occur, the management follows its normal flow.

For Caroline, if the interdicted partner does not perform administrative, financial, or management functions of the company, there is nothing to prevent him from continuing in the corporate structure. In addition, in the wording of Article 974 of the Civil Code: “An incapacitated person may, through a representative or duly assisted, continue the business previously carried out by him while capable”.

The rapporteur of the appeal at the Court of Justice of Rio Grande do Sul (TJ-RS), Appellate Judge Lusmary Fátima Turelly da Silva, said that the registration of the defendant in a credit protection registry does not justify his exclusion from the corporate structure, since such a situation is not directly linked to the supervening incapacity. Source: Conjur/ Jomar Martins

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