Imagine that one of a company's partners commits a serious breach, but the articles of association do not establish how to handle this issue. Assuming the company has bylaws that define clear rules—including regarding the expulsion of partners—would it be possible for the company to expel this partner based on that document and without judicial intervention?
In February of this year, the 3rd Panel of the Superior Court of Justice (STJ) ruled that it is indeed possible to expel a partner extrajudicially based on a document—specifically, a "Statute"—even if the company's articles of association do not provide for such a possibility.
The decision regarding Special Appeal (REsp) No. 2170665/DF had significant repercussions in both legal and business circles, as it established new parameters for the governance of business entities, particularly regarding the management of internal conflicts.
The matter arose when a partner was expelled from a limited liability company due to serious misconduct. However, the company's articles of association did not provide for expulsion without judicial intervention. Consequently, the expelled partner took the matter to court, arguing that, pursuant to Article 1085 of the Civil Code, extrajudicial expulsion would only be valid if there were an express clause to that effect in the articles of association—which was not the case here.
However, prior to the expulsion, all partners had executed a document titled "Statute" which, although not registered with the Board of Trade, had been signed by everyone, including the expelled partner.
This statute establishes, among other points, clear rules for the expulsion of partners; in the view of the reporting Justice, Ricardo Villas Bôas Cueva, this document could be considered an amendment to the articles of association.
An interesting argument raised by the expelled partner was based on the idea that this "Statute" was essentially a "shareholders' agreement" rather than a modification of the articles of association—making it a "parasocial" document that, consequently, lacks the same legal weight as the articles of association.
While distinguishing between articles of association and a shareholders' agreement is not always straightforward, in the case at hand, the STJ (Superior Court of Justice) held that this statute addressed matters typical of articles of association—structuring and regulating the company's affairs rather than merely the partners' private interests—meaning it would make no sense to view it as a shareholders' agreement.
If one were to follow the expelled partner's logic, it would be an agreement between partners containing invalid clauses, given that such clauses cannot contradict the provisions of the articles of association. However, this interpretation fails to account for the actual dynamics of the business.
According to the Court, it would make no sense for partners to execute articles of association upon forming the company and subsequently draft an agreement that contradicted them.
The most logical interpretation is that the Statute merely sought to complement the provisions of the articles of association, reflecting the partners' collective intent to regulate their business relationship in greater detail.
Thus, the STJ concluded that the extrajudicial expulsion of a partner could be carried out based on this Statute—even without formal registration—provided the document was signed by all partners and clearly established the conditions for expulsion.
In other words, by signing the articles of association, the partners acknowledged and agreed to their provisions, thereby giving the document validity among the parties and ensuring it took immediate effect.
The STJ’s decision offers a new perspective for limited liability companies, particularly regarding management and the resolution of internal conflicts. It underscores the importance of sound planning and documentation among partners, including the formalization of clear agreements on company operations and rules for working together.
The ability to resolve issues—such as the expulsion of a partner—without resorting to the courts (provided internal documents define such rules) can accelerate conflict resolution, prevent disputes from becoming overly complex or requiring judicial intervention, and avoid gaps that could lead to future impasses.
In a dynamic corporate environment, having strong legal support from the outset can provide the flexibility and clarity regarding internal rules that are essential for the company's smooth operation and prosperity.
