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Minority and Parity Abuse under the New Commercial Code

With the entry into force of the new Mozambican Commercial Code, approved by Decree-Law no. 1/2022 of 25 May (the "New ComC "), the legal concept of minority and parity abuse in companies has been introduced, as well as the liability of the minority or parity quotaholder or shareholder who, unjustifiably and unreasonably, opposes the approval of a certain resolution that is crucial to the functioning of the company, or who, by any means blocks the passing of such resolution, with the purpose of obtaining advantage for himself or a third party, to the detriment of the company and of other quotaholders or shareholders.

Under the New ComC, it is considered minority abuse when the law or the articles of association impose: (i) unanimity of votes; or (ii) a qualified majority of votes, which results in the imperative need for the approval of the minority partner or shareholder and the same, using this privilege, prevents the passing of the resolution for its own benefit or for the benefit of a third party, to the detriment of the company or of other quotaholders or shareholders.

On the other hand, it is considered parity abuse when, in a company with only two quotaholders or shareholders, where both have equal participation in the share capital, one of them unjustifiably prevents a decision from being taken with the purpose of obtaining advantage for himself or for a third party, to the detriment of the company or of the other quotaholder or shareholder.

One of the main criteria used in international jurisprudence to assess the abusive nature of the vote disapproving a resolution, or of the refusal to vote, of a minority shareholder, is the imperative nature of the resolution for the continuity of the company.

The minority and parity abuse are one of the most innovative and extremely relevant regimes for our legal system, insofar as they will, to a certain extent, dissipate the very worrying conception that, due to a natural instinct, founded in the absence of power, leads us to consider minorities as the only ones capable of being harmed, which has already been demonstrated not to be true at all in international jurisprudence and now with this new regime.