STJ reaffirms limits on piercing the corporate veil in the insolvency context and in the context of improper closure of business activities

Binding Precedent No. 1,210 and the corporate veil

In brief

On May 7, 2026, the Second Panel of the Brazilian Superior Court of Justice (STJ) concluded the judgment of Binding Precedent Theme No. 1,210. The Court reaffirmed that, in civil and commercial matters, piercing the corporate veil requires effective proof of abuse of legal personality, characterized by misuse of purpose or commingling of assets, pursuant to Article 50 of the Brazilian Civil Code. By majority vote, the Panel held that the mere absence of attachable assets or the irregular shutdown of corporate activities is insufficient, on its own, to authorize the measure. A partially dissenting opinion argued that irregular dissolution could give rise to a rebuttable presumption of abuse.

Key takeaways

• Piercing the corporate veil in civil and commercial matters requires concrete evidence of abuse of legal personality.
• The absence of attachable assets or irregular dissolution, alone, does not justify the measure.
• The decision reinforces the application of the “theory of abuse” under Article 50 of the Brazilian Civil Code.

In more detail

For purposes of judgment under the binding precedent system, the Brazilian Superior Court of Justice established the following thesis under Theme No. 1,210: “In civil and commercial legal relationships, piercing the corporate veil requires effective proof of abuse of legal personality, characterized by misuse of purpose or commingling of assets, as required under Article 50 of the Brazilian Civil Code (Theory of Abuse), and the mere absence of attachable assets and/or irregular shutdown of corporate activities is insufficient.”

This holding consolidates the Court’s case law and will guide the resolution of similar disputes nationwide.