Who Is Liable if a Holding Company Is Pierced?
- Edson Ferreira
- 1 day ago
- 3 min read

The establishment of holding companies has become increasingly common as a strategy for asset, succession, and business organization. However, despite their apparent legal shielding, holdings may be subject to piercing of the corporate veil, particularly in cases involving abuse of corporate form, deviation of purpose, or asset commingling.
In this article, we address who is held liable in practice if a holding company is disregarded, the legal and case law foundations for such a measure, and what precautions business owners should take to protect family or corporate assets involved.
1. What Is a Holding Company and Why It Is Used
A holding company is a legal entity whose main purpose is to participate in the share capital of other companies. It may be pure (when it only manages equity interests) or mixed (when it also performs operational activities). In Brazil, holdings are frequently used for:
· Succession planning and reducing family disputes;
· Structuring business groups with greater tax efficiency;
· Asset protection, segregating personal and business assets;
· Accounting and financial organization of family or corporate wealth.
2. When Can a Holding Company Be Pierced?
Piercing of the corporate veil, provided for in Article 50 of the Brazilian Civil Code, applies when the legal entity is used for:
· Fraud or abuse of rights;
· Asset commingling between shareholders and the company;
· Deviation of purpose (using the company for purposes other than those declared);
· Improper shielding of assets with the intent to defraud creditors.
Brazilian case law also recognizes reverse piercing — when the holding’s assets are reached to satisfy shareholders’ debts — or expansive piercing, involving companies within the same family or economic group.
3. Who Can Be Held Liable if the Holding Is Pierced?
When the court sets aside the holding’s autonomy, the assets of its shareholders, controllers, or managers may be directly targeted. The main scenarios are:
➤ Shareholders of the holding (individuals or entities):
If deviation of purpose or asset commingling is proven, the personal assets of shareholders may be seized to settle debts contracted by the holding itself or by companies it controls.
➤ De facto or de jure managers:
If intentional misconduct, fraud, or mismanagement is established, managers may be held personally liable, including under joint and several liability.
➤ Other companies within the group (cross-liability):
In cases of joint operations or de facto economic groups, the assets of affiliated or family-owned companies may also be reached.
Important: Piercing the corporate veil does not extinguish the legal entity of the holding, but rather temporarily disregards its patrimonial autonomy to reach the assets of its members.
4. Current Case Law and Court Criteria
Courts apply piercing of the corporate veil based on objective and factual criteria. The mere existence of a holding is not abusive per se, but if used as a tool to defraud creditors or conceal assets, it may be judicially disregarded.
· “The creation of a family holding, by itself, does not constitute fraud; it is essential to demonstrate deviation of purpose or asset commingling for the application of Article 50 of the Civil Code.” (STJ – REsp 1.775.269/SP)
· “Once asset commingling and joint management are verified, piercing of the corporate veil of the holding is permitted, with liability extending to shareholders and other companies of the group.” (TJSP – Interlocutory Appeal 2153451-71.2020.8.26.0000)
5. How to Prevent Piercing: Recommended Practices
To reduce the risk of personal or family liability arising from the piercing of a holding company, it is essential to adopt sound governance and control practices:
· Maintain clear segregation between the assets of the holding and those of its shareholders;
· Keep regular and individualized accounting, avoiding commingling of funds;
· Define managers’ powers and responsibilities formally;
· Comply with the company’s corporate purpose and declared objectives;
· Avoid using the holding to conceal assets or defraud obligations;
· Carry out corporate acts regularly, with updated records;
· Rely on ongoing legal and accounting advice for auditing and compliance.
6. Final Considerations
A holding company is a lawful, effective, and recommended structure for asset and succession planning, provided it is used in good faith, with transparency and technical rigor. However, when misused, it may be subject to piercing of the corporate veil, exposing shareholders, managers, and group companies to direct liability for debts.
Business owners must understand that form does not protect unlawful content: no corporate structure will withstand abuse. Therefore, preventive action is always the safest path to safeguard assets built through effort, while respecting applicable legal and contractual limits.