On August 06, 2019 the Brazilian legislative enacted Provisional Measure No. 892 (MP 892), which changed certain corporations’ obligations relating to mandatory publications, amending Law No. 6,404/1976 (Brazilian Corporations Law), Law No. 13,043/2014, and Law No. 13,818/2019.
Although it is being challenged in the Supreme Court of Brazil, from now on, mandatory corporate publications provided by these Laws will be made exclusively through online platforms, with digital certification of authenticity, on the website of the Brazilian Securities and Exchange Commission (CVM) and on the exchange in which the company’s securities are admitted for trading, in addition to being disclosed on the company’s website – meaning that it is no longer necessary to proceed with the publications established therein in the Official Gazette and in widely circulated newspapers.
However, there is a difference for the implementation of the regulating acts (and, likely, there will also be differences in the procedures) applicable to publicly and closely-held corporations: for these, the publications will depend on a future Act of the Ministry of Economy; for those, CVM will also be in charge of regulating the publications required, including when it involves exemption from digital certification, as well as of governing which acts and publications need to be filed for registration with the relevant Commercial Registries. As a result of the new rules, the maintenance of corporations in Brazil becomes less bureaucratic and cheaper, making them more attractive to local and foreign investors.
Despite of the fact that MP 892 has entered into force since its publication, it shall only produce effects as of the first day of the following month of the date on which CVM and the Ministry of Economy publish their acts regulating the subject. Because of its nature of Provisional Measure, it is worth bearing in mind that the rules set forth therein shall be valid for a 60-day period, automatically renewable for another 60 days, in case the Congress Houses do not conclude the voting until then. Upon the elapse of the maximum deadline of 120 days with no deliberation by the House of Representatives and the Senate, and with no presidential endorsement, the Provisional Measure ceases to be effective, due to the expiration of its term – which would make the previous rules applicable again.
Dias Carneiro Advogados is entirely available to provide any clarifications and to assist with this matter.