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In the corporate world, a well-drafted contract is one of the main tools for preventing disputes and protecting the parties’ assets. However, as important as defining the subject matter and obligations is knowing which clauses can ensure the stability of the legal relationship—or, if poorly drafted, expose the company to severe risks. This article outlines the contractual clauses that most influence the success (or failure) of a business relationship, highlighting their legal effects and essential drafting considerations. 1. The Strategic Role of Contract Clauses Although contractual freedom is a recognized principle under Brazilian law (Art. 421 of the Civil Code), the enforceability of a contract depends on how rights and obligations are set out and documented. Some clauses operate as true preventive balance points, while others—poorly drafted or absent—may lead to imbalance, litigation, or legal uncertainty. 2. Clauses That Can Save a Business Contract a) Precise definition of the subject matter Clearly specify what will be supplied, performed, or provided, with deadlines, quantities, and measurable technical criteria. This prevents ambiguous interpretations and facilitates enforceability. b) Liability and indemnity limitation clause Defines the types of damages that can be claimed (direct, indirect, loss of profits) and may set a compensation cap, offering predictability and reducing financial exposure. c) Force majeure and unforeseen events clause Protects the parties in exceptional and unforeseeable situations, such as pandemics, war, or natural disasters, preventing liability for events beyond their control. d) Penalty clause (liquidated damages for breach) Establishes a penalty in case of breach, acting as a deterrent and facilitating judicial enforcement, in line with Art. 416 of the Civil Code. e) Mediation or arbitration clause Provides in advance that disputes will be resolved through alternative dispute resolution methods, which can ensure speed, confidentiality, and specialized decision-making. f) Non-compete and exclusivity clause (if applicable) Protects strategic interests in distribution, franchise, or agency agreements, preventing one party from acting to the detriment of the other. 3. Clauses That Can Sink a Contract (or Its Legal Effectiveness) a) Generic or poorly drafted clauses Lack of clarity or the use of vague terms can lead to differing interpretations, undermining the practical effect of the obligation. Example: “payment in a timely manner” without specifying dates or criteria. b) Abusive or unbalanced clauses Provisions imposing disproportionate or one-sided obligations may be struck down by courts, especially in consumer relations or adhesion contracts. c) General waiver of legal rights Anticipatory waivers of essential rights (e.g., compensation for losses and damages or statutory guarantees) may be deemed null for violating public policy. d) Unreasonable choice of fórum Designating an excessively burdensome jurisdiction for one party without justification may be set aside by courts, particularly where it creates contractual imbalance ( STJ , Súmula 335; CPC, Art. 63). e) Absence of a termination clause Failing to specify how and when the contract may be terminated prevents the injured party from acting with certainty and hinders an amicable end to the relationship. 4. Case Law: What Courts Uphold (or Strike Down) “Contractual clauses must be interpreted in light of objective good faith and contractual balance. Abusive or contradictory clauses must be disregarded.” ( STJ  – REsp 1.091.363/SP)“A penalty clause setting a fine proportional to the contract value is valid, provided it observes reasonableness and the nature of the obligation.” ( TJSP  – Civil Appeal 1003248-62.2020.8.26.0100) “A choice-of-forum clause will only be upheld if there is no abuse and it respects access to justice.” ( STF  – RE 438.638/PR) 5. Practical Recommendations for Effective Business Contracts ·         Contract customization : avoid generic templates; draft clauses specific to each transaction; ·         Preventive legal review : a well-drafted contract is worth more than a well-argued lawsuit; ·         Periodic updates : review contracts regularly in light of new laws, case law, and business changes; ·         Proper formalization : record signatures, annexes, notices, and amendments with traceability; ·         Supporting documentation : keep records of contractual performance, extensions, and communications between the parties. 6. Final Considerations The strength of a business contract lies not only in its signature but in the quality of its clauses. In a competitive and complex environment, well-thought-out clauses function as mechanisms of legal stability and protection. Conversely, omissions or poorly drafted provisions can undermine the business relationship, making disputes inevitable and losses irreparable. Strategic and preventive legal counsel is therefore essential to ensure contracts serve as tools of security, not sources of unwelcome surprises.

A contract is one of the main tools for ensuring legal certainty in business relationships. However, even with well-drafted clauses, contractual obligations may be breached, causing financial and reputational impacts for one of the parties. In this article, we explain when a breach of contract occurs, what liabilities are assigned to the defaulting party, what can be claimed in court, and how companies can protect themselves or mount a defense, in accordance with Brazilian law. 1. What Is a Breach of Contract? A breach of contract occurs when one of the parties fails to perform, in whole or in part, the agreed obligations without just cause. This may occur through: ·         Absolute nonperformance : when the obligation is not fulfilled and late performance is no longer useful (e.g., failure to deliver within an essential deadline); ·         Relative nonperformance (default/mora) : when there is delay or defective performance, but fulfillment is still possible and useful. The injured party may seek contract termination, compensation for losses and damages, and specific performance, depending on the circumstances. 2. Legal Basis for Contractual Liability Liability for breach of contract is governed by the general rules of the Brazilian Civil Code, based on the principles of objective good faith, the social function of the contract, and balance between the parties’ obligations. Key applicable provisions: ·         Art. 389, Civil Code  – Establishes the duty to compensate for losses and damages, interest, and monetary adjustment in case of nonperformance; ·         Art. 395, Civil Code  – Liability of the debtor for losses and damages, even if nonperformance results from unforeseen events, when the debtor is in default; ·         Art. 475, Civil Code  – Allows the injured party to terminate the contract and claim damages if the breach is essential; ·         Art. 927, Civil Code  – General provision on civil liability, including contractual obligations. 3. What Can Be Claimed in Case of Breach of Contract The injured party may seek: Specific performance of the contract If fulfillment is still useful, it is possible to demand the obligation in court (delivery of goods, performance of services, etc.). Contract termination When the breach makes the agreement unviable, it is possible to request termination with restitution of payments, when applicable. Compensation for losses and damages This includes: ·         Direct damages (dano emergente) : immediate and direct losses (e.g., amounts paid, investments made); ·         Loss of profits (lucro cessante) : gains that were lost due to the breach. Contractual penalty (liquidated damages) If stipulated, the penalty clause may be enforced without prejudice to additional indemnities, in accordance with Art. 416 of the Civil Code. 4. Limits of Liability and Excluding Factors Not every contractual breach automatically results in indemnification. Case law recognizes excluding factors such as: ·         Force majeure and unforeseeable events (Art. 393, Civil Code) : unpredictable and unavoidable events that prevent performance; ·         Third-party act : when the breach is caused by a third party unrelated to the contractual relationship; ·         Lack of fault or exclusive fault of the creditor : when the injured party’s own conduct contributes to or prevents performance. Liability may also be limited by contractual clauses, provided they are valid and not abusive (e.g., setting a cap on damages or excluding lost profits in business contracts). 5. Recent Case Law on Breach of Contract Brazilian courts have taken a balanced approach to contractual breaches, recognizing the right to termination or indemnification, but also requiring clear proof of damages. “Contract termination for essential breach is admissible, with restitution of the parties to their prior state and indemnification for duly proven lost profits.” ( STJ  – REsp 1.046.513/SP)“A penalty clause stipulated in a commercial contract is valid, provided it does not infringe the principles of objective good faith and contractual balance.” ( TJSP – Civil Appeal 1008739-72.2021.8.26.0100) 6. How to Avoid or Mitigate Risks of Breach of Contract Companies can adopt best practices to prevent disputes arising from nonperformance: ·         Draft contracts with clear and detailed terms, specifying obligations and deadlines; ·         Include tolerance and extension clauses to avoid automatic breach from minor delays; ·         Establish penalty clauses proportional to the risks involved; ·         Provide for force majeure and contractual adjustment in case of unforeseen events; ·         Keep formal records of all communications and notices as evidence; ·         Encourage alternative dispute resolution methods, such as mediation or arbitration. 7. Final Considerations Breach of contract is a common reality in commercial relationships, but its effects can be minimized through proper legal planning. The defaulting party may be held liable, including for full compensation of damages caused, provided the legal requirements are met. On the other hand, the party alleging breach must proceed with caution, as termination or specific performance will only be granted with clear proof of nonperformance and of the damages actually incurred. In all cases, preventive legal advice is essential to structure well-drafted contracts, resolve disputes efficiently, and preserve the commercial relationship between the parties.

The stability and binding force of contracts are pillars of business relations. However, extraordinary and unforeseeable events — such as pandemics, wars, market crashes, hyperinflation, or abrupt regulatory changes — may render the performance of certain obligations excessively burdensome for one of the parties. It is in these contexts that the theory of unforeseeability  applies, allowing for the revision or termination of the contract due to supervening imbalance. In this article, we explain the legal foundations, requirements, recent case law, and how your company can protect itself and act safely in scenarios of contractual unpredictability. 1. What Is the Theory of Unforeseeability? The theory of unforeseeability is a legal doctrine that permits judicial revision of a valid and duly executed contract when unforeseeable and extraordinary events make the obligation excessively onerous for one party, thereby breaking the initial balance of the agreement. It constitutes an exception to the rule of pacta sunt servanda  (contracts must be fulfilled), provided for in Brazilian law based on the principles of the social function of contracts , objective good faith , and contractual balance . 2. Applicable Legal Foundations Brazilian Civil Code – Article 317 “When, due to unforeseeable reasons, there arises a manifest disproportion between the value of the obligation due and that at the time of its performance, the judge may, upon request of the party, adjust it in such a way as to ensure, as much as possible, the real value of the obligation.” Brazilian Civil Code – Article 478 “In contracts of continuous or deferred performance, if the obligation of one of the parties becomes excessively onerous, with extreme advantage to the other, due to extraordinary and unforeseeable events, the debtor may request the termination of the contract.” Consumer Protection Code – Article 6, V Recognizes the consumer’s right to modification of contractual clauses that become excessively onerous due to supervening circumstances. 3. Requirements for Revision Based on Unforeseeability For contractual revision on the grounds of unforeseeability to be judicially admitted, it is necessary to prove: ·         A contract of successive performance or with future execution; ·         A supervening, unforeseeable, and extraordinary event (e.g., pandemic, natural disaster, abrupt macroeconomic instability); ·         A significant contractual imbalance, with excessive burden for one party and undue advantage for the other; ·         Absence of fault or previously assumed risk by the party invoking the revision; ·         Good faith and attempt at extrajudicial renegotiation. 4. Case Law: Revision and the Pandemic as a Concrete Example The Covid-19 pandemic revived the theory of unforeseeability in the courts, leading to several decisions recognizing the need for proportional and temporary adjustment of obligations. ·         “Contract revision due to excessive burden arising from the pandemic is admissible, provided unpredictability, disproportion in performance, and prior attempt at negotiation are proven.” (STJ – REsp 1.870.120/SP) ·         “The theory of unforeseeability justifies the equitable modification of contractual clauses, particularly in long-term contracts affected by exceptional events.” (TJSP – Civil Appeal 1010422-59.2020.8.26.0100) ·         “The abrupt increase in the cost of essential inputs, combined with currency instability, constitutes an unforeseeable event capable of justifying contract revision.” (TJMG – Civil Appeal 1.0000.21.027345-4/001) 5. Which Contracts May Be Revised Based on Unforeseeability ·         Continuous or long-term supply contracts; ·         Commercial lease agreements affected by external events; ·         Service agreements with fixed price adjustments and variable inputs; ·         Construction, infrastructure, or turnkey contracts impacted by currency devaluation or supply chain disruption; ·         Financial or loan agreements with disproportionate clauses under a new economic context. 6. How to Act Preventively to Reduce Risks 1.       Include a renegotiation clause for extraordinary events 2.       Clauses expressly providing that the parties are required to renegotiate the contract in the event of unforeseeable changes reduce litigation risks and demonstrate good faith. 3.       Monitor risk factors during contract performance Indicators of inflation, exchange rates, supply chain stability, and public policies should be monitored on an ongoing basis. 4.       Attempt extrajudicial solutions before judicial revision Offering addenda, extensions, or deferrals before resorting to the courts is viewed favorably by judges. 5.       Formalize the entire contractual history Notices, emails, renegotiation proposals, and meeting minutes document attempts at resolution and prevent unfounded allegations. 7. Final Considerations Contract revision based on unforeseeability does not represent a weakening of contracts, but rather the preservation of balance and good faith in exceptional contexts. Companies that act diligently and strategically are able to maintain business relationships, safeguard their interests, and avoid prolonged litigation. Preventive action guided by specialized legal counsel is the key to structuring resilient contracts, with protective clauses and flexible rebalancing mechanisms.

With the digital transformation of business relations, it has become common to formalize agreements through email, WhatsApp messages, management apps, or digital platforms. Faced with this reality, many wonder: is a contract made or accepted by electronic means legally valid? Moreover, can messages exchanged in messaging apps be used as evidence? In this article, we explain what Brazilian law says about electronic signatures, the legal validity of digital contracts, and how to ensure security in agreements executed outside of paper. 1. What Does the Law Say About Contracts Signed by Digital Means? Brazilian law recognizes the validity of electronic contracts, provided that the principles of party autonomy, good faith, freedom of form, and legal capacity are observed. A signature does not need to be handwritten to produce legal effects. According to Article 104 of the Civil Code: “The validity of a legal transaction requires: (...) III – form prescribed or not prohibited by law.” In other words: if the law does not require a specific form (such as a public deed), the contract may be valid even without a physical signature — including when executed by messages or emails. In addition, Law No. 14.063/2020, which regulates electronic signatures, and the Brazilian Internet Act (Law No. 12.965/2014) reinforce the legality of digital documents and their acceptance as evidence in court. 2. Types of Electronic Signatures and Their Legal Effects Brazilian legislation recognizes three types of electronic signatures, depending on their level of security: Type of Signature Characteristics Legal Validity Simple Login, acceptance via email, WhatsApp, or click-to-accept Valid, but requires proof of authorship and integrity Advanced Biometrics, token, geolocation, two-factor authentication Valid, with stronger evidentiary force Qualified (ICP-Brasil) Digital certificate issued by an official authority Equivalent to handwritten signature for legal purposes e signature — such as acceptance by WhatsApp — may be legally valid, provided it is possible to prove: ·         Who sent the message; ·         The content accepted or agreed upon; ·         The integrity of the communication (no later alterations). 3. Contract by WhatsApp or Email: Is It Valid as Evidence? Yes. Courts across Brazil have recognized WhatsApp conversations, emails, and screenshots as valid evidence, including for debt collection, contractual liability, and proof of business relationships. ·         “The exchange of electronic messages between the parties, via WhatsApp and email, proves the existence of a verbal contract with clear obligations.” (TJSP – Civil Appeal 1009281-14.2021.8.26.0002) ·         “Conversations conducted through messaging applications have probative value when not specifically contested by the opposing party.” (STJ – AgInt in AREsp 1.630.810/SP) It is recommended to capture messages with date, time, and identification of the phone number or email in their entirety. Technical verification tools and even notarial certificates can reinforce the authenticity of the evidence. 4. Precautions When Entering Into Digital or Message-Based Contracts Although valid, contracts entered into via email or WhatsApp must follow basic precautions to ensure legal security and avoid future disputes: ·         Clearly identify the parties involved : full name, CPF/CNPJ (tax ID), email or phone number, and each party’s role. ·         Record the object of the contract with clarity : avoid ambiguities about what is being contracted, deadlines, amounts, payment methods, termination conditions, etc. ·         Keep the conversation history saved and protected : preferably as a PDF or secure backup. ·         Avoid later modifications without express agreement : changes to the contract or its performance must be communicated and validated by both parties. ·         Whenever possible, formalize the final terms in a single document : even if the negotiation began by messages, the ideal is to consolidate it in a proposal, contract, or final email with express acceptance. 5. When Is a Physical or Qualified Digital Signature Mandatory? Despite freedom of form, certain legal transactions require specific formalities, such as: ·         Purchase and sale of real estate worth more than 30 minimum wages (requires a public deed – Civil Code, Art. 108); ·         Suretyship or guarantee contracts (require express signature of the guarantor); ·         Corporate acts requiring registration in notary offices or commercial registries; ·         Powers of attorney with specific powers. In these cases, a WhatsApp contract is not sufficient and must be complemented by formal execution. 6. Final Considerations Yes, contracts executed by email or WhatsApp are legally valid in Brazil, provided the parties, the negotiation content, and the clear acceptance of obligations are identifiable. They may also be used as valid evidence in court, including for collection, damages, or termination purposes. However, informality requires caution: the more complex or significant the legal relationship, the more advisable it is to adopt digital documents with advanced or certified signatures, in order to avoid disputes over the validity of the agreement. Preventive legal counsel is essential for drafting, validating, or reviewing electronic contracts, ensuring legal security without losing agility in digital negotiations.

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.

Many entrepreneurs, partners, or even consultants make decisions on behalf of a company without being formally appointed as directors in the articles of association or before the commercial registry. This informal performance, often seen as natural in the daily life of business entities, can create serious legal risks, including personal liability for the company’s debts and unlawful acts. In this article, we clarify what characterizes a so-called de facto director, the legal implications of this role, and the key precautions that should be taken to avoid unpleasant surprises in tax enforcement, labor claims, or lawsuits seeking the piercing of the corporate veil. 1. What Is a De Facto  Director? A de facto director is someone who, although not formally appointed as a company director, performs, on a continuous or significant basis, acts typical of corporate management. This may be a partner, a third party, a family member, or even an employee who makes strategic decisions, authorizes payments, signs contracts, or represents the company before third parties. This role differs from that of a de jure  director, who is the person expressly designated in the company’s articles of association or bylaws, vested with specific powers and responsibilities duly registered with the competent authorities (Commercial Registry, Federal Revenue, etc.). 2. What Are the Risks for a De Facto  Director? Acting as a de facto director may give rise to direct personal and financial liability, particularly in the following contexts: ·         Tax enforcement:  the de facto director may be held liable for the company’s tax debts, under Article 135, III, of the Brazilian National Tax Code, which provides for personal liability of those who act with abuse of authority, in violation of the law, or of the articles of association. ·         Labor claims:  labor courts admit personal liability of the de facto  director, especially when labor laws are violated, such as lack of employee registration, non-payment of severance entitlements, or misuse of job roles. ·         Piercing the corporate veil:  a de facto director may be included as a defendant in actions seeking to redirect enforcement to the personal assets of those who engaged in acts of abuse of legal personality, deviation of purpose, or asset commingling. ·         Liability for unlawful acts:  contracts signed or decisions made by the de facto  director on behalf of the company may be challenged in court, and may also result in civil and even criminal liability, depending on the case. 3. What Does Case Law Say About the Issue? Brazilian courts have frequently recognized the existence of de facto  directors, based on documentary and testimonial evidence showing the actual exercise of management duties, even in the absence of formal registration. Relevant rulings include: ·         “Liability for tax debts may be extended to the de facto  director, provided that acts of management in violation of the law or company bylaws are proven.” (STJ – AgRg in REsp 1.150.464/SP) ·         “Both the de jure and the de facto director are jointly liable when it is established that both participated in conducting the company’s business, with decision-making powers.” (TRT-2 – RO 1000121-74.2020.5.02.0010) 4. How to Know if You Are Acting as a De Facto  Director You may be considered a de facto  director if you: ·         Authorize or make significant company payments; ·         Represent the company in meetings with suppliers, banks, or government agencies; ·         Participate in strategic decision-making; ·         Decide on hiring and dismissing employees; ·         Sign contracts, agreements, or corporate documents, even informally; ·         Establish internal policies, business operations, or management acts. Even if these actions are performed in good faith or with the tacit approval of other partners, liability may arise if damages, irregularities, or legal omissions occur. 5. How to Protect Yourself: Practical Guidelines To avoid being characterized as a de facto  director and the corresponding risks, it is advisable to: ·         Avoid performing management functions without formal appointment in the articles of association or recorded minutes; ·         If actively involved in management, request inclusion as a de jure director, with clearly defined powers and duties; ·         Maintain supporting documentation for every significant decision, with approval from formally appointed directors; ·         Limit involvement to that of an investor or advisor if not engaged in the company’s day-to-day operations; ·         Formalize consultancy or advisory agreements without assuming direct decision-making authority. 6. Final Considerations Acting as a de facto director may seem harmless at first glance but represents one of the greatest legal vulnerabilities for entrepreneurs and partners. In times of crisis, litigation, or enforcement, lack of formality can prove costly — including personal asset seizure, debt redirection, or judicial freezes. Prevention and clear documentation are the best tools to safeguard rights and limit liabilities. Ongoing legal counsel is also essential to structure company management safely, particularly in economic groups, holding structures, or family-owned businesses.

In an increasingly dynamic and interconnected business environment, it is common for companies to operate in coordination, sharing infrastructure, human resources, and commercial goals. However, this proximity can bring significant legal risks, particularly when the so-called economic group  is established. In this article, we explain what characterizes an economic group and the practical effects of cross-liability between companies. Understanding these concepts is essential for entrepreneurs, managers, and investors who wish to preserve corporate asset autonomy and avoid the improper extension of debts across formally distinct companies. 1. What Is an Economic Group? An economic group can be formed formally—when structured through direct and declared corporate control, as in holdings and subsidiaries—or factually, when there is joint activity, asset commingling, shared management, or converging economic interests. Labor Law, for example, expressly recognizes the concept of a de facto economic group under Article 2, §2, of the Brazilian CLT (Labor Code). In Civil Law, the analysis is conducted based on the principles of good faith, the social function of the company, and asset autonomy, as established in Articles 50 and 421 of the Civil Code. 2. Cross-Liability: Concept and Consequences Cross-liability arises when one company is held accountable for obligations undertaken by another company within the same group, even if it did not directly participate in the legal relationship that gave rise to the debt. Such liability may result from: ·         Asset commingling between companies; ·         Common management or control; ·         Mutual economic interest in the business operation; ·         Lack of accounting and financial segregation. In general, liability among companies can be: ·         Joint (solidary):  all companies in the group are collectively responsible for liabilities; ·         Subsidiary:  liability is triggered only if the principal debtor fails to meet its obligations. 3. When Is the Economic Group Recognized by the Courts? Courts analyze concrete facts, not merely the formal structure of companies. Elements such as shared employees, use of the same headquarters, issuance of invoices by different companies for the same service, or cross-payment of expenses are strong indicators of an economic group. Relevant case law: ·         “The configuration of an economic group does not require hierarchical subordination between companies, but rather the existence of coordination and unity of interests.” (TST – RR 11235-42.2017.5.03.0108) ·         “Joint liability may be recognized among companies with shared partners and asset commingling, even in the absence of a direct contractual relationship.” (STJ – REsp 1.097.735/SP) 4. Risks for Entrepreneurs and Practical Impacts The main risk lies in the extension of one company’s liabilities to others within the group, jeopardizing the assets of otherwise solvent entities. Consequences may include the disregard of legal personality, forced execution of third-party assets, or the substantive consolidation of bankruptcy or judicial reorganization. Other effects: ·         Loss of legal certainty among affiliated companies; ·         Impacts on tax and fiscal accounting; ·         Uncertainty in credit operations, mergers, or acquisitions. 5. How to Prevent Cross-Liability: Best Practices To preserve corporate autonomy and avoid judicial recognition of an economic group or cross-liability, it is recommended to: ·         Maintain strict accounting segregation among companies; ·         Ensure financial and banking independence (separate accounts); ·         Formalize contracts between group companies, including for asset or service transfers; ·         Avoid centralized management or overlapping executive roles; ·         Keep formal and documented records of all intercompany transactions; ·         Maintain distinct corporate purposes and individualized business activities. 6. Final Considerations Joint business operations can be strategically advantageous from a commercial perspective, but they must be supported by a solid legal and accounting framework. The recognition of economic groups and cross-liability by Brazilian case law serves to curb abuses and safeguard market good faith. Therefore, entrepreneurs should seek preventive legal guidance to ensure that business expansion and corporate diversification do not compromise the financial and asset stability of the entire business ecosystem.

In an increasingly dynamic and interconnected business environment, it is common for companies to operate in coordination, sharing infrastructure, human resources, and commercial goals. However, this proximity can bring significant legal risks, particularly when the so-called economic group  is established. In this article, we explain what characterizes an economic group and the practical effects of cross-liability between companies. Understanding these concepts is essential for entrepreneurs, managers, and investors who wish to preserve corporate asset autonomy and avoid the improper extension of debts across formally distinct companies. 1. What Is an Economic Group? An economic group can be formed formally—when structured through direct and declared corporate control, as in holdings and subsidiaries—or factually, when there is joint activity, asset commingling, shared management, or converging economic interests. Labor Law, for example, expressly recognizes the concept of a de facto economic group under Article 2, §2, of the Brazilian CLT (Labor Code). In Civil Law, the analysis is conducted based on the principles of good faith, the social function of the company, and asset autonomy, as established in Articles 50 and 421 of the Civil Code. 2. Cross-Liability: Concept and Consequences Cross-liability arises when one company is held accountable for obligations undertaken by another company within the same group, even if it did not directly participate in the legal relationship that gave rise to the debt. Such liability may result from: ·         Asset commingling between companies; ·         Common management or control; ·         Mutual economic interest in the business operation; ·         Lack of accounting and financial segregation. In general, liability among companies can be: ·         Joint (solidary):  all companies in the group are collectively responsible for liabilities; ·         Subsidiary:  liability is triggered only if the principal debtor fails to meet its obligations. 3. When Is the Economic Group Recognized by the Courts? Courts analyze concrete facts, not merely the formal structure of companies. Elements such as shared employees, use of the same headquarters, issuance of invoices by different companies for the same service, or cross-payment of expenses are strong indicators of an economic group. Relevant case law: ·         “The configuration of an economic group does not require hierarchical subordination between companies, but rather the existence of coordination and unity of interests.” (TST – RR 11235-42.2017.5.03.0108) ·         “Joint liability may be recognized among companies with shared partners and asset commingling, even in the absence of a direct contractual relationship.” (STJ – REsp 1.097.735/SP) 4. Risks for Entrepreneurs and Practical Impacts The main risk lies in the extension of one company’s liabilities to others within the group, jeopardizing the assets of otherwise solvent entities. Consequences may include the disregard of legal personality, forced execution of third-party assets, or the substantive consolidation of bankruptcy or judicial reorganization. Other effects: ·         Loss of legal certainty among affiliated companies; ·         Impacts on tax and fiscal accounting; ·         Uncertainty in credit operations, mergers, or acquisitions. 5. How to Prevent Cross-Liability: Best Practices To preserve corporate autonomy and avoid judicial recognition of an economic group or cross-liability, it is recommended to: ·         Maintain strict accounting segregation among companies; ·         Ensure financial and banking independence (separate accounts); ·         Formalize contracts between group companies, including for asset or service transfers; ·         Avoid centralized management or overlapping executive roles; ·         Keep formal and documented records of all intercompany transactions; ·         Maintain distinct corporate purposes and individualized business activities. 6. Final Considerations Joint business operations can be strategically advantageous from a commercial perspective, but they must be supported by a solid legal and accounting framework. The recognition of economic groups and cross-liability by Brazilian case law serves to curb abuses and safeguard market good faith. Therefore, entrepreneurs should seek preventive legal guidance to ensure that business expansion and corporate diversification do not compromise the financial and asset stability of the entire business ecosystem.

Asset protection is a preventive measure adopted by entrepreneurs, families, and investors with the goal of safeguarding their assets against future risks, such as judicial enforcement, corporate disputes, financial crises, or family conflicts. Unlike illicit practices or attempts to conceal assets, legitimate protection must be structured using legal instruments, in compliance with the limits established by civil, corporate, and tax legislation, as well as consolidated case law on the subject. 1. What Is Lawful Asset Protection Lawful asset protection refers to a set of legal measures aimed at organizing and segregating assets to ensure preservation, continuity of business activities, family security, and succession planning.These measures are only valid when based on good faith, properly documented, and not intended to defraud creditors, frustrate enforcement proceedings, or simulate legal transactions. 2. Legal Tools for Asset Protection a) Asset and Family Holding Company Creating a holding company is one of the main strategies used for the protection and management of family or business assets. ·         It allows for the centralization of ownership of real estate, equity interests, and financial investments within a legal entity, separating them from the partners’ personal assets; ·         It facilitates succession planning, professionalizes asset management, and reduces probate costs; ·         It can serve as a mechanism for family income control and distribution. However, its use requires proper accounting practices, clear definition of roles, and respect for the legal personality of the entity. Situations of asset commingling, misuse of purpose, or simulation may lead to judicial disregard of the corporate entity. b) Formal Separation of Personal and Business Assets Failure to clearly distinguish between personal and business spheres can result in the partners being held personally liable for company debts. Adopting practices such as: ·         formal profit distribution, ·         partner remuneration through contract or payroll, ·         adequate capitalization of the company, ·         and regular bookkeeping, is essential to avoid personal liability and to preserve the partners’ assets in case of business insolvency. c) Donations With Restrictive Clauses Anticipating succession through donations containing clauses of inalienability, unseizability, and non-communicability can serve as a legitimate mechanism for asset protection and organization, provided legal limits are observed. These clauses: ·         do not exclude the forced share of legal heirs; ·         and are allowed to protect the asset against judicial liens, except in cases where the donor himself is a debtor. Their validity depends on express provisions and formal registration. d) Will and Succession Planning In addition to lifetime donations, a will allows the asset holder to organize the succession of the disposable portion of their estate, reducing conflicts among heirs and ensuring the continuity of businesses or family projects. 3. Legal Limits and Risks of Asset Protection The improper use of protection instruments may be invalidated by the courts, particularly in cases involving: ·         fraud against creditors (Art. 792, Brazilian Code of Civil Procedure), ·         simulation (Art. 167, Brazilian Civil Code), ·         or asset commingling and abuse of legal form (Art. 50, Brazilian Civil Code). Case law consistently requires concrete evidence of the intent to defraud creditors or misuse the corporate structure before authorizing the disregard of legal personality or the annulment of asset transactions. The Brazilian Economic Freedom Law (Law No. 13,874/2019) reinforced this requirement by stipulating that disregard of legal personality may only be decreed upon proof of misuse of purpose or asset commingling. 4. Joint Liability in Economic Groups and De Facto Management Even with valid asset structures, personal assets may still be reached when: ·         companies operate in a coordinated manner, with unified management and interests, creating joint liability within an economic group; ·         or when an individual, even without formal appointment, acts as a de facto manager and is held liable as if formally appointed, including for tax, labor, or civil debts. 5. Conclusion: Legal Certainty Requires Ongoing Planning Legitimate asset protection is not synonymous with concealment or artificial shielding. It is a structured and preventive legal plan designed to reconcile asset preservation with transparency, good faith, and the social function of business and property. The Ferreira Advocacia team works in the structuring of holding companies, corporate reorganizations, estate successions, and corporate liability matters, guiding entrepreneurs and families in building safe, customized, and effective solutions.

This article analyzes the concept and legal effects of de facto economic groups in Brazilian Corporate Law. While Brazilian law formally recognizes economic groups organized under the Corporation Law (Law No. 6,404/76), courts increasingly recognize informal (de facto) economic groups formed by companies that act in a coordinated manner, share a unity of interests, or exhibit asset commingling. This study explores the criteria for establishing such groups, the risks of joint and several liability, and the distinctions from the doctrine of piercing the corporate veil. In today’s corporate environment, it is common for companies, although formally independent, to operate jointly, in a coordinated and functionally integrated manner—especially when they belong to the same family, investment group, or operational structure. This reality gives rise to the concept of a de facto economic group , which, even without formal agreement or registration, can result in joint and several liability among the involved companies, based on principles of good faith, the social function of business, and the prohibition of misuse of legal personality. This article examines the elements that characterize a de facto group, how it differs from formal economic groups, and the legal risks arising from interconnected corporate activity without proper legal safeguards. 2. De Jure vs. De Facto Economic Groups 2.1 De Jure Economic Group Established under the Corporation Law (Law No. 6,404/76, Articles 265–277), and requires: The existence of a controlling company; A formal group agreement approved by shareholders and duly registered; Governance relationships between the parent and subsidiaries governed by specific legal standards. 2.2 De Facto Economic Group Arises from business practice, regardless of formalization. Its existence is determined by a factual analysis of the relationships between companies that: Share partners or managers; Operate from the same address or share infrastructure; Conduct business in the same market segment with overlapping clientele; Engage in resource transfers or cross-asset transactions. 3. Legal and Jurisprudential Basis Although not specifically regulated by statute, the liability of de facto economic groups is supported by: Art. 50 of the Civil Code – abuse of legal personality; Art. 265 of the Civil Code – solidarity is not presumed but may arise by law or implied agreement; Art. 2, §2 of the CLT  (by analogy) – companies with common interest and direction; Principles of good faith, the social function of the company, and fraud prevention. “The formation of an economic group does not depend on formalization, but on coordinated actions between companies with a common interest and operational integration.” (STJ, REsp 1.749.593/SP, Justice Luis Felipe Salomão, judgment on 11/17/2020)   4. Criteria for Recognizing a De Facto Economic Group Courts apply a set of factual indicators, including: Criterion Practical Example Common ownership or management Companies with the same controllers or executives Shared assets or asset confusion Property of one company registered under another Shared headquarters or operations Companies operating from the same location or sharing staff Frequent resource transfers Informal loans, shared bank accounts Coordinated market activity Artificial competition to divide clients or influence pricing Unified business strategy Integrated tax or corporate planning   “Operational coordination, control unity, and asset commingling are sufficient to hold companies liable as part of a de facto economic group.” (TJSP, Civil Appeal 1009233-81.2021.8.26.0100, judgment on 12/12/2023)   5. Legal Consequences of Recognizing a De Facto Economic Group 5.1 Joint and several liability Once recognized, companies may be held jointly liable for civil, labor, tax, or commercial obligations; Individual fault is not required—proof of coordinated conduct and common interest suffices. 5.2 Expansion of the defendant pool in enforcement actions Allows companies in the group to be directly included in enforcement proceedings, even if not listed in the original judgment. 5.3 Risk of cross piercing of the corporate veil A de facto economic group may justify piercing the corporate veil between formally distinct companies if there is misuse of purpose or asset commingling. 6. Difference Between De Facto Economic Group and Piercing the Corporate Veil De Facto Economic Group Piercing the Corporate Veil Holds interconnected companies liable Holds shareholders or managers personally liable Requires proof of coordinated business activity Requires proof of misuse of legal personality May result in joint liability among legal entities Extends liability from legal entity to individual No bad faith required; functional relationship suffices Requires evidence of abuse or fraud   7. Best Practices to Mitigate Risk of Cross-Liability Separate the operations of group companies both formally and materially; Maintain independent accounting records for each company; Formalize all intercompany transactions (including loans); Avoid shared offices, staff, or resources without contractual justification; Establish distinct governance structures with real decision-making autonomy; Disclose any control or ownership relationships where applicable. 8. Final Considerations The existence of a de facto economic group is not limited to formal agreements. Coordinated business activity, shared interests, and operational integration may give rise to joint and several liability and significant legal exposure, especially in tax, labor, and collection proceedings. Judicial recognition of such groups does not require bad faith—evidence of shared structure, management, or business purpose is sufficient. Therefore, business owners, managers, and legal advisors must act preventively to properly structure intercompany relationships, preserve each company’s patrimonial autonomy, and minimize the risk of cross-liability.

This article analyzes the legal, procedural, and substantive requirements for the expulsion of a partner for just cause in limited liability companies under Brazilian law. Provided for in the Civil Code, this mechanism is designed to safeguard the continuity and stability of the company when a partner commits a serious breach that renders their continued presence untenable. The analysis addresses the legal foundations, the procedural steps required, the grounds constituting just cause, the financial implications of the expulsion, and prevailing judicial interpretations. Limited liability companies are characterized by enduring and highly personal contractual relationships among partners, founded on mutual trust and cooperation in pursuing the company’s business activity. When this trust is broken due to conduct incompatible with the duties of loyalty and collaboration, Brazilian law allows for the expulsion of a partner for cause. Though exceptional, this remedy is essential to maintaining the stability and continuity of the company, avoiding the burden of coexisting with behaviors harmful to the company’s purpose. This article examines the legal and practical aspects of expulsion for just cause, its formal requirements, and the economic consequences for the excluded partner. 2. Legal Basis and Requirements for Expulsion for Just Cause 2.1 Civil Code Provision Art. 1,085 – Unless otherwise provided in the articles of association, a partner who commits a serious breach of duties or exposes the company to considerable risk of harm may be expelled by amending the articles of association, if the expulsion is approved by a majority of the other partners, excluding the vote of the accused partner, and provided the right to a defense is guaranteed. This constitutes a case of compulsory partial dissolution based on subjective and causal grounds, conditioned upon the occurrence of a serious breach and compliance with internal procedural due process. 3. Recognized Grounds for Just Cause The law does not provide an exhaustive list of just cause events, which are instead defined through case law. Commonly accepted grounds include: Breach of the duty of loyalty or acts of unfair competition; Misappropriation of company funds or assets; Repeated conduct inconsistent with the company’s objectives; Systematic noncompliance with contractual or legal obligations; Willful obstruction of the company’s regular operations. “Repeated conduct by a partner diverting clients to a competing company they own constitutes just cause for expulsion.” (TJSP, Civil Appeal 1004298-78.2020.8.26.0100, judgment on 10/24/2023) 4. Formal Requirements for the Expulsion Process Expulsion for just cause must follow a formal procedure to ensure due process and avoid nullity: 4.1 Express provision in the articles of association The articles may detail the procedure, including quorum and notice requirements. 4.2 Majority vote of partners The vote of the accused partner is excluded (Civil Code, Art. 1,085). 4.3 Guarantee of the right to a defense The accused partner must be given a reasonable period to respond and be allowed to present a defense at a partners’ meeting. 4.4 Registration of the expulsion The amended articles reflecting the expulsion must be filed with the Commercial Registry, along with any adjustments to the company’s capital. 5. Asset Consequences of Expulsion: Valuation of Interests The partner’s expulsion results in partial dissolution of the company and requires the valuation of their equity interest, in accordance with: The articles of association (e.g., book value, market value, or asset-based criteria); Art. 1,031 of the Civil Code (valuation reference date is the expulsion event); If there is disagreement, a judicial action for valuation may be filed, usually involving an accounting expert. “A partner expelled for just cause is entitled to receive the value of their equity interest based on the company’s financial position on the expulsion date, as determined by the articles of association.” (STJ, REsp 1.199.121/SP, Justice Luis Felipe Salomão, judgment on 09/10/2020) 6. Consequences of Expulsion and Limits on Retention of Assets The expelled partner loses their status as a partner but retains the right to receive their equity interest; The company cannot withhold payment solely on the basis of the expulsion; Any losses caused by the expelled partner may be claimed in court if not offset by express contractual provisions; Clauses that impose automatic forfeiture of the partner’s entire interest are deemed null and void for violating Art. 421-A of the Civil Code  and the social function of contracts. 7. Relevant Case Law “The expulsion of a partner requires clear evidence of serious misconduct and compliance with corporate due process, under penalty of nullity.” (TJMG, Civil Appeal 1.0000.20.131621-2/001, judgment on 05/18/2022)   “Valuation of interests must reflect the true value of the partner’s share, even in cases of expulsion for just cause.” (TJSP, Civil Appeal 1019876-45.2021.8.26.0100, judgment on 12/06/2023)   “A contractual clause establishing complete forfeiture of the partner’s equity as a penalty for just cause expulsion is abusive and void.” (STJ, REsp 1.729.554/SP, Justice Paulo de Tarso Sanseverino, judgment on 08/12/2021) 8. Best Practices for Expelling a Partner for Just Cause Include specific clauses in the articles of association defining the procedure; Formalize all steps (notifications, meeting minutes, registry filings); Allow sufficient time for defense and ensure due process; Decide by lawful quorum, excluding the accused partner’s vote; Value the equity interest per contractual or legal criteria. 9. Final Considerations The expulsion of a partner for just cause is a severe measure that demands solid evidence of serious misconduct, strict adherence to procedural requirements, and careful handling of the resulting financial implications. Its goal is to preserve the continuity and integrity of the company by removing partners whose conduct undermines the business purpose or corporate harmony. Preventive legal counsel is essential to ensure the validity of the process, uphold the right to a defense, and mitigate future disputes, particularly concerning the valuation and payment of the expelled partner’s equity interest.

This article analyzes the clawback clause  — also referred to as a reversion clause  — applied to the purchase and sale of equity interests, especially in investment agreements or corporate reorganization transactions. It is a contractual mechanism that allows for the restitution of amounts or assets transferred if certain future conditions are not fulfilled. The study explores its legal nature, validity under the Brazilian Civil Code, contractual limitations, modalities, and key legal risks, with support from legal doctrine and recent case law. The purchase and sale of corporate quotas often involve conditional or resolutory clauses , used to allocate risk between the parties based on the company’s post-transaction performance. Among these, the clawback clause stands out. This clause enables the seller or investor to recover part of the transferred equity or paid amount if the buyer or the company fails to meet pre-established targets — whether financial, strategic, or regulatory. However, its use requires legal caution, as it may be deemed null, abusive, or even fraudulent if not aligned with the principles of good faith , proportionality , and the social function of contracts . 2. Concept and Legal Nature of the Clawback Clause The clawback clause is an accessory contractual provision, legally characterized as: ·       A resolutory condition  (Articles 121 and 127 of the Civil Code), whereby the contract is undone if the agreed-upon event occurs; or ·         A conditional obligation  to partially return the price or equity, based on future non-performance. Its structure is grounded in private autonomy  (Article 421 of the Civil Code) and the freedom of the parties to modulate contractual effects based on the business risks undertaken. 3. Purpose and Common Use Cases Clawback clauses are used to: ·         Protect the seller when the purchase price is contingent upon future performance assumptions; ·         Ensure reversibility of the transaction where there is uncertainty about hidden liabilities; ·         Protect the investor if the financial statements misrepresent the company’s actual financial condition; ·         Correct post-sale distortions due to late disclosures, unexpected litigation, or loss of strategic contracts. 4. Common Modalities of Clawback Clauses Modality Characteristics Proportional price refund A portion of the purchase price is refunded if revenue or profit targets are not met. Equity reversion Equity interests are returned to the seller, fully or partially, upon breach. Automatic price adjustment The deal value is reassessed based on post-closing adjustments. Compensatory indemnification The buyer agrees to compensate for hidden liabilities or underperformance. 5. Legal Validity Requirements To be valid, the clawback clause must meet the following requirements: 1.       The future and uncertain event must be clearly defined (objective condition); 2.       A reasonable time frame must be set for verifying the condition; 3.       The clause must not result in unjust enrichment  or unilateral excessive burden ; 4.       The right to due process must be ensured in verifying the condition (e.g., right to accounting expertise or access to records); 5.       The clause must be duly recorded in the articles of association when involving equity in limited liability companies. 6. Case Law on Clawback Clauses " A contractual clause that provides for proportional refund of the purchase price of corporate quotas is valid when it is proven that the financial statements provided by the seller did not reflect the company’s actual condition. " (São Paulo Court of Appeals, Civil Appeal No. 1002891-42.2021.8.26.0100, judgment dated 07/12/2023) " Clawback clauses must be interpreted restrictively; generic default or subjective dissatisfaction is not presumed. " (STJ – Superior Court of Justice, REsp 1.809.871/SP, Reporting Justice Ricardo Villas Bôas Cueva, judgment dated 05/10/2021) " As long as expressly agreed upon, the clawback clause is effective in ensuring the financial balance of equity purchase and sale transactions. " (Minas Gerais Court of Appeals, Civil Appeal No. 1.0000.21.127671-2/001, judgment dated 11/14/2022) 7. Legal Risks and Drafting Considerations ·         Generic clauses may be deemed void due to uncertainty or abusiveness; ·         Clauses allowing unilateral reversion  without objective criteria are likely to be disregarded by courts; ·         Lack of clarity regarding deadlines and performance indicators leads to litigation and legal uncertainty; ·         Any penalty or default clause must be reasonable and proportionate , pursuant to Article 413 of the Civil Code. 8. Contractual Best Practices ·         Use auditable financial indicators  (e.g., EBITDA, net revenue); ·         Provide for technical verification mechanisms , such as accounting expertise or specialized arbitration; ·         Set a clear deadline  for the resolution condition to be verified; ·         Register the clause in the articles of association , when dealing with corporate equity; ·         Avoid subjective language , such as “at the sole discretion of the buyer” or “if dissatisfied.” 9. Final Considerations The clawback clause is a valuable tool for risk allocation  and contractual balance  in equity transactions. However, its enforceability depends on technical drafting , objectivity , and proportionality — failure to observe these may result in disputes or invalidation. Preventive legal counsel  is essential to structure clear, auditable, and legally effective clauses, ensuring predictability for the parties and avoiding conflicts over targets, timeframes, and the economic consequences of the transaction.