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The Supreme Court recently considered how a minority shareholder should react if the majority shareholder overrules it on a capital increase resolution that subsequently leads to the dilution of its holding. Under Supreme Court case law, (minority) shareholders are protected against a dilution of their participation following a capital increase if their statutory subscription rights are excluded.
In addition to the legal remedies set forth under Brazilian law, piercing the corporate veil is an alternative to the general rule of limited liability. Although the courts have widely applied this doctrine, it has not always been the proper and most effective measure for resolving disputes. A new bill therefore aims to prevent misuse of the doctrine and safeguard certain principles recognised by the Constitution.