Brazilian law provides that the partners/shareholders of Brazilian companies shall meet annually to review the management accounts, discuss and vote the financial statements and decide on the destination of the year-end results, as well as, as the case may be, appoint managers and members of the audit board.
The annual meetings must be held within the first 4 months after the end of the fiscal year. In Brazil, the fiscal year-end usually coincides with the end of the calendar year and, therefore, the annual partners/shareholders meeting shall normally be held until April 30 of each year.
LIMITED LIABILITY COMPANIES
In relation to limited liability companies, the financial statements must be disclosed to the non-manager partners before the annual meeting. The decisions taken in such meeting shall be formalized in minutes, which must be registered in the competent Board of Commerce.
The Board of Commerce of the State of São Paulo (“JUCESP”), on the terms of Deliberation JUCESP No. 02/2015, understands that the companies characterized as “large-sized” limited liability companies must publish their financial statements in the newspapers before filing the minutes of partners meeting which approved such financial statements with JUCESP. Nevertheless, considering the recent changes to the corporate law, which are described below, JUCESP might require large-sized limited liability companies to follow the new publication rules applicable to corporations.
Large-sized companies are the ones which, according to Law No. 11,638/07, have, in the last fiscal year, total assets greater than R$ 240 million or a gross income greater than R$ 300 million. Companies that are not considered large-sized may be released from publishing its financial statements if present a declaration attesting that the company does not fall into the definition of large-sized company.
Corporations must, as a rule, publish their financial statements at least 1 month before the date of the Annual Shareholders’ Meeting (“AGO”), in which the relevant decisions will be taken and, later, file such financial statements in the Board of Commerce.
Corporations may, alternatively, publish a notice to the shareholders within the same term previously mentioned (at least 1 month), informing that the financial statements are available at its headquarters and publish them at least 5 days prior to the AGO. If all shareholders attend the meeting, such terms can be dismissed, but the publication of the financial statements must be done prior to the AGO.
The minutes of the AGO must be registered in the competent Board of Commerce and then published in a newspaper.
As of 2022, an important innovation is the end of the mandatory publication of corporate acts in the official press. From now on, the general rule for the publication of corporate acts of corporations is the publication of a summary of the document in a large-circulation newspaper, with the simultaneous release of the entirety of the documents on the website of the same newspaper.
In addition, privately held corporations with gross revenue of up to R$ 78 million have now the option to publish their corporate acts, including the call notice and financial statements, free of charge and electronically, in the Public Digital Bookkeeping System – SPED, in which case the documents must also be made available on the websites of the respective corporations.
Publicly held corporations must also observe the provisions established by the Normative Instruction of the Brazilian Security Exchange Commission (“CVM”) No. 481, dated as of December 17, 2009, as amended (“ICVM 481”) and the guidelines issued by the Circular Letter CVM/SEP No. 01/2021, published by CVM’s Superintendence of Corporate Relations on February 26th, 2021. It is important to highlight that, through the most recent changes in ICVM 481, CVM has regulated Shareholders Meetings held 100% virtually. The delay in disclosing its financial statements is considered a serious noncompliance by CVM and the company may be liable to pay a daily fine.
Our team will be pleased to assist you with the draft of the corporate documents required to formalize the approval of the 2021’s accounts and to discuss the best alternatives to each case.
For additional information, please contact KLA’s Corporate and Mergers & Acquisitions practice area.