EXTRAJUDICIAL EXCLUSION OF A SHAREHOLDER FROM A CLOSELY HELD CORPORATION BY THE SUBSIDIARY APPLICATION OF ARTICLE 1.085 OF THE CIVIL CODE

Abstract

This study aims to analyze the admissibility and convenience of the extrajudicial exclusion of a shareholder from closely held corporations. Due to certain peculiarities that distinguish corporations from other company types governed by the Civil Code of 2002, they require specific legislation for their regulation. However, when corporations are formed as closely held entities, with a predominance of the intuitu personae nature stemming from affectio societatis—a typical characteristic of limited liability companies—it is not uncommon to resort to the provisions of the Civil Code of 2002 in a supplementary manner to resolve corporate disputes, thus bringing closely held corporations closer to “partnership-type” companies to justify analogous treatment. Therefore, through the hypothetical-deductive method, the study seeks to answer the following question: is the extrajudicial exclusion of a shareholder from closely held corporations admissible? The analysis focuses on the characteristics and classifications of corporations, the duty of loyalty among shareholders, and the possibility of excluding a shareholder through the subsidiary application of the Civil Code, based on the legal provision established in Article 1,089 of the aforementioned statute, in view of preserving the corporation and adopting a faster and more cost-effective means of resolving disputes.