Judgment of the Constitutional Court of 05-7-2013

Tax Infringements

This Judgment issued by the Constitutional Court ruled the provision of Article 8, no. 7 of the General Regime of Tax Infractions ("Regime Geral das Infracções Tributárias") unconstitutional, in the part that refers to the joint and several liability of managers and directors of a company that may have wrongfully cooperated in the practice of tax infringements for fines imposed on the company.

Judgment of the Court of Appeal of Coimbra of 03-07-2013

Legal Personality ("Capacidade Colectiva")

According to the Court's decision, the use of the legal institute of the disregard or lifting of the legal personality is possible when situations of civil liability based on general principles or on protection standards take place (notably standards for the protection of creditors), or in situations of abuse of rights and there are no other legal grounds to invalidate the conduct of the shareholder or of the company that want to be prosecuted – i.e., the disregard of the legal personality has a subsidiary nature.

Among these situations, the Court highlights the following in which it appears that the legal personality is used unlawfully or abusively to harm others, there being a contrary use of said legal personality to norms or general principles, including business ethics:

  • Confusion or promiscuity between the legal spheres of two or more people, usually between the company and its shareholders;
  • Undercapitalization of the company, due to lack of assets necessary to achieve the corporate purpose and continue the company’s activity; and
  • Companies in a group relationship or exercising control over the company.

Thus, the Court concluded that the disregard of the legal personality of the company must always involve a judgment of disapproval over the conduct of the agent, i.e., it always involves the formulation of a judgment of censorship and it should prove to be illegal, there being the need to verify if there is a posture of fraud or a posture of abuse of law.

Judgment of the Court of Appeal of Évora 11-07-2013

Notification of a Legal Person

In this decision, the Court clarified that the notification of legal persons, including commercial companies, in administrative offense proceedings shall be made in accordance with subpoenas/court orders ("citações") in civil proceedings.

Thus, the Court concluded that a notification made to the accused legal person by means of registered letter addressed to its registered offices, where it was received by a person who signed the respective acknowledgement of receipt and completed it with his/her ID card number it is valid and effective.