Brazilian regulation provides that within the first 4 months after the end of the fiscal year the partners/shareholders of the Brazilian companies shall meet 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.
In Brazil, the fiscal year-end normally occurs simultaneously with the end of the calendar year on December 31, thus the annual partners/shareholders meeting shall usually be held until April 30 of each year.
Regarding the limited liability companies, prior to the annual meeting, the partners must receive the management accounts, the financial statements and the economic results of the company. The decisions taken in the meeting shall be formalized in minutes that must be registered with the Board of Commerce within 20 days as of the date of the meeting.
Based on the terms of JUCESP resolution no. 2/ 2015, large corporate companies and cooperatives, regardless of the corporate type (including limited liability companies), shall evidence the publication of their financial statements on “Diário Oficial do Estado” and on a widely circulated newspaper, to file the Minutes of partners or shareholders Meeting which approved such statements.
According Law no. 11.638/07, companies or group of companies under common control which have, on their last fiscal year, total assets higher than R$ 240.000.000,00 or gross income higher than R$ 300.000.000,00 are considered large companies. Companies which present a statement, signed by a legal representative jointly with an accountant attesting that the company is not large are released from publishing their financial statements.
In relation to corporations, the decisions shall be taken in an Ordinary Shareholders’ Meeting (“AGO”). At least 5 days prior to the AGO the company must publish its financial statements, which shall subsequently be registered with the Board of Commerce. In case all shareholders attend the meeting, the term of 5 days in advance may be waived, provided, however, that the financial statements are published prior to the AGO.
The minutes of the AGO shall be registered with the Board of Commerce within 30 days as of the date of the meeting and, subsequently, published with the Official Gazette and with another widely circulated newspaper.
In addition to the formalities set forth in Law no. 6.406/1976, publicly held companies shall observe the provisions established by the Normative Instruction of the Brazilian Security Exchange Commission (“CVM) no. 481/2009 and the guidelines issued by Circular Letter CVM/SEP/SRE n°1/2018 (Ofício Circular CVM/SEP/SRE n°1/2018), published by the Superintendencies of Corporate Relations and Securities Registry of the CVM on February 23, 2018, being subject to a fine due on a daily basis in case of delay to disclose its financial statements. Additionally, the failure to disclose the financial statements is considered a serious breach by the Brazilian Security Exchange Commission.
Our team will be pleased to assist you with the corporate documents required for the approval of the 2017 accounts and to discuss alternatives on the publication of financial statements for the large limited liability companies.
For additional information, contact KLA’s Corporate and Mergers & Acquisitions area.