Brazilian Company Law

1. General Concept of Company Law

Defining Company Law has always proved to be a difficult task for company law scholars, first because it is a discipline that operates in a multifaceted environment where the alignment of different factors that integrate it with the normal course of commerce is not always possible, despite its power to influence the definition of norms that guide commercial activity.¹ In fact, over the years there have emerged differences in how the concept of company law came to be defined given the myriad views and theories proposed in relation to the subject of company law.

On the other hand, the terminology associated with defining the company law is itself presented as a determinant of the concept; that is, the designation of the discipline as commercial law or company law determines how we understand the definition of the term company law. In the present study, we prefer to adopt the terminology of company law, in order to respond to the new trends of this legal discipline, which has its focus on the company and no longer on the trader or in the acts of trade; this doesn’t mean Commercial Law has disappeared. ←5 | 6→In fact, it is worth to highlight here Soares Hentz’s words—“commercial law does not disappear with the new [Civil] Code, but is reborn as Company Law.”²

According to Fazzio Júnior, there is almost a uniform orientation in the formulation of the tenets comprising the company law, given that one cannot ignore the existence of an organized professional activity of an economic nature aimed at making products and services available to the consumer.³ Thus, continues Fazzio Júnior, in the Brazilian law, company law should be understood as the positive normative complex that focuses on the legal relations derived from the exercise of business activity [that is] it disciplines the solution of disputes between entrepreneurs, as well as related matters to the organized economic activity of production and circulation of goods (…).⁴

In turn, Fábio Ulhoa Coelho understands that Commercial Law, as a traditional designation of the mercantile legal discipline, has as its subject the socially structured means of overcoming conflicts of interest among those engaged in the economic activities of production or circulation of goods or services we all need to live.⁵

A brief analysis of the above definitions reveals a common aspect in addition to its economic content. Indeed, both authors present Business Law in a conciliatory dimension, that is, as an instrument for settlement of disputes between entrepreneurs. We believe that such a consideration can reduce the essence of company law, which, in general, as both authors acknowledge, is the regulation of business activity, that is, the “Law that regulates the relations arising from commercial activities.”⁶ Indeed, business activity cannot only be seen as conflicting; it has a dimension that goes beyond that. In fact, conflicts between entrepreneurs arise as a result of the exercise of trade; they are not the origin of trade. On the other hand, Fazzio Júnior’s consideration of Business Law being a positive normative complex ignores not only the origins of Business Law but also one of its main characteristics—the informalism—as we will see below. As a matter of fact, not all the rules that make up the company law’s normative framework are positive.

Ricardo Negrão looks at the various moments the legal discipline has gone through and to safeguard its origins, concludes that from the point of view of terminology the designation “Company Law” is preferable, as it encompasses the ←6 | 7→traditional aspects of Commercial Law and the new institutes of the entrepreneur and will be “the branch of private law that regulates the activity of the former trader and the modern entrepreneur, as well as their legal relations, established during the professional exercise of commercial and business activities.”⁷

Carvalho Mendonça looked at subjectivist and objectivist approaches and sought to reconcile them in a single concept and conceived Commercial Law as “the legal discipline that regulates acts of commerce and, at the same time, the rights and obligations of the people who exercise them professionally and their helpers.”⁸

In a more modern approach, Fran Martins says that Commercial Law is a “set of legal rules that regulate the activities of companies and commercial entrepreneurs, as well as acts considered commercial, even if these acts are not related to the companies’ activities.”⁹

In consideration of the foregoing discussion as well as in line with the idea of Fran Martins, we accept the thesis that company law will be a branch of private law constituted by a set of rules that regulate business activity; that is, it takes care of not only the subjects that carry out the commerce but also the relations that they establish in the exercise of the commerce.

2. Origin and Historical Evolution of Brazilian Company Law

Finding an exact moment in which company law would have arisen is not an easy activity, and differences continue to prevail even in contemporary times between scholars. Indeed, some authors refer to the Middle Ages as the period in which the company law emerged. Rubens Requião states categorically that, as a result of the demands of trade, Commercial Law had emerged in the Middle Ages,¹⁰ but others argue that the same thing happened with the emergence of trade, that is, with humanization, because since the beginning, men have always felt the need to establish commercial exchanges, although at that time there was no universal means of exchange and that using barter the rules to regulate this activity would soon have emerged; this explains the rules of trade regulation found in Mesopotamia, in the ancient Egypt; in Phoenicia in Palestine; and in the ancient Greece.¹¹ Other ←7 | 8→scholars still ascribe the emergence of company law to the period after the Middle Ages, basing that claim on the economic ideas and their results in the Western world during that period.¹² Among the defenders of this idea stands out Tullio Escarelli, who states that

“It is in the civilization of the communes that Commercial Law begins to assert itself in opposition to feudal civilization, but also distinguishing itself from common Roman law, which, almost simultaneously, is constituted and imposed. Commercial law appears, therefore, as a historical phenomenon, whose origin is linked to the affirmation of a bourgeois and urban civilization, in which a new entrepreneurial spirit and a new business organization develop. This new civilization appears, precisely, in the Italian communes.”¹³