SAE Towers

According to the Brazilian legal provisions, it is possible for any person to hold a position of Administrator of a company, even without being its quotaholder, as long as he does not have a conviction for crimes described in the Brazilian Law (bankruptcy crime, bribery, malfeasance, crimes against the popular order, financial system, consumer relationship and competition).

The Administrator may be appointed in the articles of association during the constitution of the company, in amendment to the by-laws, or in a corporate act separated through minutes of the quotaholders' meeting.

Once the appointment has been made, signed the term of possession and filed with the Trade Board or the Civil Registry of Legal Entities, we can go on to describe the responsibilities of the Administrator.

He can be hired as an employee following the rules of Brazilian labor law, through an employment contract and receipt of salary, as he can be hired by a service contract, upon receipt of pro-labore. In the first option, there is jurisprudential understanding of the Brazilian Superior Labor Court that in the event of appointment of employee, there is a possibility of suspending the employment contract, not computing the time of service during the performance as Administrator, unless the legal subordination resulting from the employment relationship remains.

He may be removed from the position at any time at the discretion of the quotaholders.

The Administrator shall represent the company and shall faithfully fulfill his duties provided for in the By-laws, which shall contain the form of administration, its powers and attributions. He will be supervised by the quotaholders, to whom he will be accountable (extrajudicially or judicially).

Its responsibility covers civil, tax, administrative, environmental, and criminal liability.

By the Brazilian Civil Code must act, in the exercise of their duties, with care and diligence that every active and honest person usually act in the management of their own business, in order to avoid situations of joint and several liability arising from private law relationships, corporate, consumer and public law (tax, social security, labor and environmental).

He will be jointly and severally liable to company and to third parties harmed, for fault in the performance of his duties, meaning he will be responsible for all acts and damages that may causes. Generally, the company will be obligated to answer for the actions of its Administrator, with the subsequent right of recourse against the Administrator to recover its losses and damages.

  ​Generally, the company will be obligated to answer for the actions of its Administrator, with the subsequent right of recourse against the Administrator to recover its losses and damages  

He will also bear civil liability if he fails to comply with the resolutions of the quotaholders of the company or violate the Law or the By-laws by not fulfilling his legal duties (diligence, loyalty, not acting in conflict of interest with the company) or if he acts with deviation of purpose or with commingling of assets.

He will have personal liability, and the Brazilian Civil Code establishes that may be responsible for the damages caused to company with his personal assets. When he acts illicitly together with others, will have joint and several liability. And the illegal act of the administrator in collusion with controlling quotaholder holds both liable.

Under the Brazilian Antitrust Law, the infringement of the economic order generates the responsibility of the company and the individual responsibility of its Officers or Administrators, jointly. The law also establishes a fine to the Administrator when directly or indirectly responsible for the infraction if his fault or intent is proven.

The tax liability of the Administrators is stated in the Brazilian Tax Code, under which the Administrators will be held responsible for the non-payment of taxes, when, despite the company having the resources to do so, he acts in bad faith and in violation of the law, by not paying the taxes to public treasury. However, jurisprudential understanding of the Brazilian Superior Court of Justice is that even in tax matters the Administrators are not personally responsible, because it would be a contingency of business life and not a culpable act, if, for example, you fail to pay a tax. Although, if you do not comply with the law by failing to pay the withholding income tax and the social security contributions of employees, you will be liable for the crime of misappropriation.

The Consumer Protection Code provides for criminal liability of the Administrator who approves the supply or offering of products or services under the conditions prohibited by its provisions.

The Brazilian Law that regulates industrial property also establishes criminal responsibility to the Administrator who commits the crime of unfair competition.

And finally, the Administrator will be criminally liable for any conduct of excess in its duties stated in the By-laws (violation of the Law and to the By-laws), as well as for any individual or joint, intentional or culpable act committed on behalf of the company (environmental, corruption, tax crime, deviation consented or ordered of non-compliance with safety norms at work that may cause the death of an employee or any act that may characterize fault or intent on the occurrence of that event etc).