Mischief in business

In an interview with Ana Paula Padrão, on Masterchef, a program broadcast by Band, The Head Chef, Paola Carosella, revealed the “business strategy” used to buy her partners ‘ share of the restaurant.

Paola said that when she idealized her restaurant in São Paulo, she would not have the financial conditions to structure it, and ended up getting seven partners to invest in the restaurant. Paola also said that she was the only one who worked, but that the restaurant had a design chosen by her partners and that it did not have “her face”.

To be able to buy the participation of her partners, in order to retain control of the restaurant’s company, the chef admitted in the interview that she “left” the restaurant for about three months, so that the turnover would fall purposefully, with the intention of decreasing the amount to purchase the shares of her partners. Thus, after the execution of his plan, he bought the share of his partners for less than what the restaurant was actually worth.

True or not, the subject generates curiosity and we will deal here with the societal impacts that the conduct (if perpetrated) can cause. First, it should be clarified that the partner of a company does not need to work in it. The partner is responsible for paying (paying) the subscribed (promised) share capital, having a voice and vote in the social deliberations (meetings or meetings of partners), participating in the results (profit or loss) and being entitled to the repayment of capital.

The one who works and does the administration of the business in his day to day is the administrator who may or may not be one of his partners. The administrator(s) as payment for their work receive a pro-labor remuneration.

From the above explanation, we see the first incongruity in the speech of the head chef, who tries to justify her discontent for being “the only partner to work”. If your partner cannot be expected to work in the business, the work is assigned to the employees of the company, under the administration and control of the administrator(s). The partners are responsible, precisely, the function of partner, as stated above, and there is no duty to work in/for the company.

The second point that draws attention from the corporate point of view, refers to the “business strategy” narrated by Chef that aimed to buy the participation of her partners for a lower amount than the company was really worth. To better clarify this aspect, in corporate relations, good faith is manifested to the maximum degree, and the social Interest, or the interest of the company, should guide the actions of the partners and administrators.

Thus, the duty of loyalty to the company and to the other partners is imposed on the partners and, even more so, on the directors. The duty of loyalty is condensed into concrete duties of collaboration and protection, and members and directors must actively collaborate to safeguard the social Interest and refrain from conduct that may harm the interest of the company and expectations of other members.

The directors also have a duty of trust, which translates into the duty of the administrator to act in accordance with the trust placed in them by the partners in the conduct of the company’s business.

In the case narrated, it is verified that when “leaving” the restaurant for about three months, the partner, taking into account her role as administrator, did not fulfill her duties in good faith and loyalty, since she acted contrary to the interests of the company and the other partners, deliberately letting the turnover fall, to achieve a personal interest of acquiring control of the company for herself.

The acts narrated by Chef, when analyzed against the premises of corporate law, should not be used as an example, since when taking into account the principles already pointed out in this article, they are contrary to good faith, Ethics in business and relationships, among others.

Legal consequences for practices such as this may include:

(i) condemnation for the payment of compensation for material damage to the other partners:

(a) in an amount equivalent to that which they no longer receive from the sale of their shares in the company; and

(b) in an amount equivalent to what they no longer received for the results of the company while they were still partners.

(ii) conviction for the payment of compensation for moral damages to the other partners:

(A) in an amount equivalent to the loss of the partners ‘ chance that if the restaurant’s numbers were better, they might not be interested in selling; and

(b) in value necessary so that the conduct is not repeated (punitive character).

Leonardo Da Vinci

Lawyer, graduated in law, with emphasis on Business Law, from Universidade Presbiteriana Mackenzie (2012), enrolled in the Brazilian Bar Association, São Paulo Section (OAB/SP) (2012). Post-graduate and Specialist IN Business Law from the São Paulo School of Law of the Getúlio Vargas Foundation (2014), Master in political and Economic Law from the Mackenzie Presbyterian University (2017), author of books and articles, Lecturer, University professor, member of the São Paulo Lawyers Association (AASP), member of the corporate law and mergers and Acquisitions Committee of the International Bar Association. Founding partner of TM Associados.

Cindy Massesine Pimentel

Lawyer, graduated in law, with emphasis in public law, from Pontifícia Universidade Católica de Campinas (PUCCAMP -2019), enrolled in the Brazilian Bar Association, São Paulo Section (OAB/SP) (2019). Post-graduate in Notarial and registry law from the Renato Saraiva Teaching Complex (CERS), author of articles. Leader of the advisory department at TM Associados.