Can I annul a corporate resolution?

Corporate resolutions reflect the decisions collectively taken by the shareholders or quota holders of a company, at a General Meeting, on matters essential to its legal and economic life, such as amendments to the articles of association, the appointment of management bodies or the distribution of profits.

The adoption of corporate resolutions is subject to compliance with legal rules and the provisions of the company’s articles of association, the breach of which may give rise to defects capable of judicial challenge.

The Portuguese Companies Code (Código das Sociedades Comerciais – CSC) provides that resolutions shall be voidable where they:
• Violate provisions of either the law, where nullity is not applicable, or the articles of association (for example, rules regarding notice, quorum or majority requirements);
• Are adopted in a situation of conflict of interests, where a shareholder or quota holder, seeking to obtain advantages for themselves or for third parties, has failed to abstain from voting;
• Have been approved through the use of improper votes, namely by shareholders or quota holders who were prevented from voting;
• Violate rules protecting shareholders’ or quota holders’ rights, as occurs in cases involving the suppression or abusive amendment of special rights.

The persons entitled to challenge the resolution include, namely, shareholders or quota holders who voted against it or who were not present at the meeting. Those present who voted in favour may also invoke annulment, but only in exceptional circumstances, such as where the vote was cast under duress.

The annulment of a corporate resolution must be sought through legal proceedings brought before the commercial court of the company’s registered office within 30 days, counted from: i) the date of the meeting, if the shareholder or quota holder was present; ii) the date on which the shareholder or quota holder became aware (or should have become aware) of the resolution, if absent.

This deadline is particularly important since, as it is neither suspended nor interrupted, once it has elapsed the resolution may no longer be challenged on the terms referred to above.

In urgent situations, namely where the implementation of the resolution may cause irreversible damage to the Company, an interim measure for the suspension of the corporate resolution may be requested, which must, however, be filed within 10 days.

Knowledge of the legal mechanisms for challenging resolutions enables shareholders and quota holders to protect their rights and ensure that corporate decisions comply with the law and the principles of good governance.

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