Post by firoj1616 on Feb 15, 2024 6:43:25 GMT -5
With the peculiar subtlety that small adjustments to increase tax revenue usually involve, article 17 of Law 11,051/04, under the pretext of limiting fines for distributing bonuses to partners and administrators of companies in debt to the Treasury Nacional and the INSS, ended up resurrecting an obsolete legal device dating from 1964 that had fallen into disuse for many years. In effect, article 32, caput, of Law 4,357/64 provided that “legal entities, while they are in debt, not guaranteed, to the Union and its Social Security and Assistance authorities, due to lack of payment of tax, fee or contribution, within the legal term, may not: a) distribute any bonuses to their shareholders; b) give or assign profit sharing to its partners or quotaholders, as well as to its directors and other members of governing, fiscal or advisory bodies.
Law in turn, changed the sole paragraph of the precept, stipulating a ceiling for the fine, which is now limited to 50% of the total value of the legal entity's unsecured debt, in both cases. Reinvigorated in 2004, the anachronistic device was the target of an immediate reaction from the legal community, which basically resulted in its non-reception by the Federal Constitution of 1988, as it contradicts the freedom to exercise economic activity. Although this basis is relevant, this text intends to analyze the issue from New Zealand Email List another perspective, focusing on two points that were discredited in the initial debates and which, nevertheless, are crucial to clarify the content of the legal prohibition: the scope of the terms “distribute bonuses/ profit sharing” and “unsecured debt.
The device under analysis prevents companies with unsecured debt before the National Treasury from distributing bonuses to their shareholders, giving or assigning profit shares to partners or shareholders and directors. Interpreting the issue, there were those who understood that the distribution of profits (dividends) to shareholders or quotaholders would be covered by the legal prohibition. It turns out that corporate legislation establishes distinctions between the distribution of dividends and the attribution of bonuses or profit sharing. In fact, the first corresponds to the remuneration paid to partners proportionally for their participation in the share capital, due to the calculation of net profit in the company; the second, in turn, constitutes a type of “gratification” paid to the partner, director or even a contracted third party, due to their performance in running the company, and must be recorded as an expense.
Law in turn, changed the sole paragraph of the precept, stipulating a ceiling for the fine, which is now limited to 50% of the total value of the legal entity's unsecured debt, in both cases. Reinvigorated in 2004, the anachronistic device was the target of an immediate reaction from the legal community, which basically resulted in its non-reception by the Federal Constitution of 1988, as it contradicts the freedom to exercise economic activity. Although this basis is relevant, this text intends to analyze the issue from New Zealand Email List another perspective, focusing on two points that were discredited in the initial debates and which, nevertheless, are crucial to clarify the content of the legal prohibition: the scope of the terms “distribute bonuses/ profit sharing” and “unsecured debt.
The device under analysis prevents companies with unsecured debt before the National Treasury from distributing bonuses to their shareholders, giving or assigning profit shares to partners or shareholders and directors. Interpreting the issue, there were those who understood that the distribution of profits (dividends) to shareholders or quotaholders would be covered by the legal prohibition. It turns out that corporate legislation establishes distinctions between the distribution of dividends and the attribution of bonuses or profit sharing. In fact, the first corresponds to the remuneration paid to partners proportionally for their participation in the share capital, due to the calculation of net profit in the company; the second, in turn, constitutes a type of “gratification” paid to the partner, director or even a contracted third party, due to their performance in running the company, and must be recorded as an expense.