In many family businesses, decisions are made in environments defined by trust, familiarity, and habit. However, in this context, trust, familiarity, and habit are a double-edged sword that must be handled carefully.

They are a double-edged sword because, on one hand, they are often the greatest asset of these structures, yet they can also become a source of risk when they replace—whether consciously or inadvertently—the minimum formal guarantees required by corporate governance.

We frequently work with family-owned companies, that is, those in which ownership and decision-making are concentrated in the hands of a relatively small group of individuals with close family ties. Often, we encounter a recurring practice: certificates of corporate resolutions that do not correspond to any formally held meeting, nor are they properly recorded in signed minutes. In other words, substantive corporate agreements—for example, on dividend distributions, remuneration of the board, or approval of financial statements—that were documented after the fact, without a formal call, without minutes, and therefore without a solid legal basis.

In contexts of blind trust among partners (often siblings, spouses, or parents and children), this way of operating can persist for years without being questioned. However, when a significant event occurs—such as a sale, the entry of new shareholders, a family dispute, or a generational succession—these omissions come to light and can seriously jeopardize the viability of the transaction or the defense of the shareholders’ rights involved.

Corporate Formalities Are Not Optional

It must be remembered that, in commercial companies—including family businesses—the valid adoption of resolutions by collective bodies (shareholders’ meetings or boards of directors) requires compliance with a formal process:
proper notice of meeting, valid constitution of the body, deliberation, voting, and recording of the resolutions in signed minutes.

This procedural sequence is not decorative; it is designed precisely to safeguard the rights and interests of all parties involved. Its omission, even if justified by custom or trust, constitutes a breach of the principle of corporate legality and may result in the invalidity of the resolutions adopted—with significant practical consequences.

Misplaced Trust

It is understandable (and in practice, inevitable) that personal relationships influence the day-to-day operations of a family business. Many partners do not clearly distinguish between family decisions and corporate decisions, operating under the logic that “we all agree,” “we discussed this at the time,” or “this is how we’ve always done it.”

That reasoning may work as long as there is alignment and goodwill. But when circumstances change—if, for instance, one of the partners wishes to sell, a third party joins the capital, or a strategic disagreement arises—the absence of formal documentation becomes an obstacle. It blurs the line between what was genuinely agreed upon and what was merely assumed as “the usual practice.”

In some cases, this poor practice has led to the question of whether the lack of formal notice and documented minutes could constitute a violation of the political rights of minority shareholders. The existence of isolated certificates, unsupported by documentation or evidence of deliberation, is not sufficient to legally validate those resolutions if they are challenged.

Documentation Is Not Bureaucracy — It Is Legal Protection

It is important to break the notion that complying with corporate formalities is a mere bureaucratic exercise. In reality, it is the mechanism that provides legal certainty to the decisions made by shareholders and the management body.

When we speak of “properly documenting” corporate resolutions, we refer to both:

Substance: ensuring that resolutions clearly and coherently reflect what has been decided.
Form: respecting the procedures established by law and by the bylaws—formal call or universal meeting, attendance list, deliberation, voting, signed minutes, etc.

Universal meetings, for instance, allow certain notice requirements to be waived, but they do not exempt the preparation of minutes. There are no shortcuts: without minutes, there is no meeting; and without a meeting, any issued certificates lack legal foundation.

Practical Consequences of Poor Documentation

The implications of failing to properly document corporate resolutions can range from inconvenient to seriously problematic. Within the civil, corporate, and commercial spheres, the main contingencies include:

Inability to prove decisions before third parties, such as banks, public authorities, or potential buyers.
Risk of challenges by minority shareholders, particularly in cases involving dividend distributions or significant structural changes.
Obstacles in due diligence processes, where buyers demand clear documentation and traceability of key resolutions.
Questioning of management body decisions, when tied to unformalized shareholder resolutions.

In extreme cases, such practices could even raise criminal implications, especially if corporate documents are issued that do not reflect reality or infringe upon the rights of third parties.

In practice, the boundary between civil/commercial and criminal liability is delicate. For criminal relevance to exist, there must be more than mere omission or negligence—there must be intent, conscious falsification, or harm. Nonetheless, it is worth keeping this in mind, even when poor practice stems from good faith or relational inertia.

Best Practices to Prevent Problems

The goal is not to make company management more complicated, but to establish simple routines that professionalize decision-making. Some basic recommendations include:

Hold meetings regularly, even in universal form, and always prepare minutes, even when full consensus exists.
Draft minutes carefully, including the content of deliberations, the outcome of the vote, and the identification of attendees.
Avoid isolated certificates unsupported by prior minutes, even if the apparent bureaucracy may tempt one to seek shortcuts.
Adopt a family protocol or shareholders’ agreement adapted to the company’s reality to help prevent future conflicts.
Seek external legal or corporate advice not only in times of conflict but as a preventive measure—sometimes a brief review can prevent significant issues

Conclusion: Professionalizing Does Not Mean Losing the Family Spirit

In a family business, respect for shared history and personal relationships is essential. But that should not come at the expense of basic corporate discipline. Proper documentation does not mean distrust—it means protecting the collective will, ensuring the project’s stability, and avoiding unnecessary disputes.

In today’s environment—where many family businesses are considering succession, growth, or opening to third parties—having well-organized and consistent corporate documentation is no longer optional: it is a necessity.

Corporate Documentation in Family Businesses: Substance, Form, and Legal Risks