Most people are familiar with the process of incorporating a new business, but at times, corporations cease to exist for the good of society. Under Brazilian law, there are several mechanisms that result in a legal entity ceasing to exist.
The first way that a legal entity can meet its end under Brazilian law is the obvious one. Legally, this is the conventional form of terminating a legal entity, and it simply means that the shareholders, partners, or co-owners have decided to end their partnership as provided by their corporate charter or as otherwise directed by law.
There is a second means to terminate the existence of a legal entity. Legal termination refers to a type of judicial dissolution whereby the corporate charter is rescinded or its social function has been exhausted. Legal dissolution takes place according to set provisions of the law, such as bankruptcy.
The last type is a court-ordered dissolution, which is a mix of the two previous types. This normally occurs when corporations deviate from the ends for which they were formed. There is also a legal distinction between dissolution and liquidation. In some cases, an entity’s assets will need to be liquidated before the dissolution is complete.
Ricardo Tosto is a preeminent member of the Sao Paulo Bar. After earning his LLB degree from one of the most prestigious law schools in the city, Ricardo Tosto developed his legal skills working for a large utility and serving as director of a private pension foundation.
In addition to being one of Sao Paulo’s most famous litigators, Ricardo Tosto has a wide range of legal and academic interests. He was a co-founder of Brazil’s Foundation for the Study of Election Law and belongs to several international professional organizations. He is also active in mentoring new legal talent.