Articles | Postado no dia: 5 November, 2026
Valuation of Equity Interests in Limited Liability Companies: Key Considerations
When a new business is established, the focus is on growth, with the aim of generating profits and distributing dividends to shareholders. However, the possibility of the company being dissolved, a shareholder withdrawing, or a shareholder passing away does not always receive the attention it deserves, despite the fact that drastic changes and unforeseen events are common in the business world.
In this context, provisions governing the valuation of equity interests — the determination of the value corresponding to the ownership interest held by a shareholder who leaves the company¹ — are frequently overlooked when business entities are incorporated or new shareholders join. Nevertheless, defining these provisions is essential to prevent corporate disputes and ensure business continuity.
One of the issues associated with the valuation of equity interests is that, in the absence of a specific contractual clause, the determination balance sheet (balanço de determinação) is applied. This is a balance sheet prepared specifically for the purpose of the transaction, which values the company based on its net assets (the company’s net asset value). This method is provided for in Article 1,031 of the Brazilian Civil Code and must be applied by the courts pursuant to Article 606 of the Brazilian Code of Civil Procedure, even though it may not be the most appropriate method for determining the company’s market value.
As a result, if no contractual provision exists, the determination balance sheet method will apply when one or more shareholders leave the company, even if the company’s net asset value does not reflect its market value. This situation may affect any type of business, but it is particularly relevant to startups, which, from a certain stage of development onward, tend to have a high market value and relatively low net assets. In such cases, the departing shareholder may receive an amount considerably lower than expected.
Consequently, it is not uncommon for shareholders who leave a company to turn to the courts in an attempt to obtain the application of a method that, in their view, better reflects the company’s value. However, the Brazilian Superior Court of Justice (STJ) has established that, in the absence of a contractual provision to the contrary, the determination balance sheet method must be applied. This position was reaffirmed in Special Appeal No. 1,877,331/SP, in which the children of a deceased shareholder unsuccessfully sought to apply the discounted cash flow method to part of the company’s assets. The STJ upheld the decision using net asset value as the basis for the calculation, given the absence of a contractual provision to the contrary.
Another relevant aspect that shareholders often overlook is the payment deadline for the amount determined. Paragraph 2 of Article 1,031 provides for a period of only 90 days from the determination of the equity interest value for payment to the departing shareholder. This period may not be sufficient for the company to raise the funds required to pay the shareholder, potentially leaving the company in an unfavorable and financially challenging position.
Therefore, to prevent disputes and ensure that a shareholder’s departure does not adversely affect either the company or the departing shareholder, it is essential to carefully assess and establish a specific method for valuing equity interests in advance. In addition, it is advisable to define other important details, such as the payment deadline and conditions for the determined amount and, in the case of a market-based valuation using the discounted cash flow method, the discount rate to be applied. This approach helps reduce potential sources of conflict and preserve harmonious shareholder relations.
Authors: Thiago Gomes and Lucas Cavalcante.
