In recent weeks, we've heard a lot about the case of actress Larissa Manoela involving her private assets and the administration of her assets by her parents. In short, the actress began her career at the age of four (04) and had her assets administered by her parents. However, now that Larissa Manoela has turned 22 (twenty-two), she became aware that her assets, estimated at R$ 18,000,000.00 (eighteen million reais), were concentrated within a company holdingShe is a minority shareholder, with a 2% stake, and her parents have majority control [1].

Cases like this are increasingly being reported in the media and draw attention to a movement in the opposite direction to what has become common over time.

Usually, the movement in the constitution of patrimonial and family holdings is carried out by the ascendants (parents or grandparents), who concentrate most of the family patrimony, to later pass the patrimony on to the descendants (children or grandchildren). 

However, with the changing market and technological and media advances, we are hearing more and more about the reverse movement, in which young people influencers have started their professional lives prematurely, with their parents managing their careers, as happened in the case mentioned above, who now has a scope of work far beyond playing characters on television, owning channels, brands and so on. 

Given these facts, it may also be a choice for parents to opt for the concentration of minors' assets within a holding company, with the aim of (I) concentrating and organizing the assets in a legal entity; (II) facilitating governance; (III) reducing the tax burden - depending on the types of operation/activities to be carried out by the company; (IV) management autonomy; (V) separating the figures of the individual and the legal entity; etc.

With regard to the legal aspects of the issue, it can be seen that before a young person reaches the age of majority (18), they are considered to be absolutely incapable of performing the acts of civil life (up to the age of 16) and relatively incapable (from the age of 16 to 18), requiring their parents to represent them up to the age of 16, and after that, up to the age of 18, for their parents to assist them in performing the acts. 

As a result, until young professionals reach the age of legal majority, their private assets are always controlled by their legal representatives or assistants (most often their parents). 

According to art. 1.689 of the Civil Code,as long as the children are minors, the parents will be the usufructuaries of their assets, as well as having the authority to administer them. With regard to the first - legal usufruct - the parents have the autonomy to use the income from the assets for the benefit of both the children and the family entity, using the assets to pay for expenses incurred in education, health, food or leisure. As for the second - administration of assets - parents must preserve their children's assets, preventing them from depreciating or diminishing.

In addition, parents are unable to alienate or encumber real estate owned by their children, as well as contract obligations, except in extreme need, in which case judicial authorization will be required. 

Therefore, even if the parents have control of the assets of their represented/assisted person, there are legal provisions that make it impossible to undo or reduce the assets without judicial authorization. There is even a legal provision determining that, when the minor reaches the age of 16, the amounts received in the exercise of professional activity, as well as the assets acquired with such resources, must be excluded from the usufruct or administration of the parents. 

The subject requires further analysis because, through corporate structures, it is possible that, after reaching the age of legal majority (or relative capacity to perform the acts of civil life), the legal representatives continue to enjoy and manage the assets of the represented party, including having the majority ownership of the assets concentrated in a family holding company (majority control), instead of concentrating the ownership of the assets in the name of the represented/assisted party. 

In general terms, there are some legal types defined as holding (pure, mixed or patrimonial), but here it focuses only on the analysis of the holding patrimonial. 

The aim of setting up a holding patrimonial is mainly the protection and concentration of family assets within a single legal entity, in which the owners of the assets place their assets within the company (generally through the payment of assets to the share capital or the direct acquisition of assets by the legal entity). This model generally leads to a reduction in the tax burden and can make it easier to inherit, including savings on transfer tax (ITCMD).

So there are benefits to setting up so-called holdings, even if the assets come from the artistic work of minors. What is really important to preserve is the assets of the minor, who, even if represented by their parents, is the true owner of the assets and can in the future demand accountability for the financial practices carried out. 

It should also be noted that, even after the usufruct and the administration of the assets by the parents have ended, they can remain in the position of managing the assets, through the position of company directors, as long as they are duly remunerated for this, since they are providing an activity to the company (withdrawal of pro-labore with the due deductions of labor and tax amounts). 

Finally, it should be noted that each case must be analyzed in its own particular way and planned according to the needs of each party.

[1] Source: Fantástico program, broadcast by TV Globo on 13 and 20/08/23.

By: Liège Fernandes Vargas

Corporate Law | CPDMA Team