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Annual Shareholders’ Meeting, Annual Quotaholders’ Meeting and Rules applicable to Publications
According to applicable Brazilian corporate laws, during the four months following the end of the fiscal year, the shareholders or quotaholders must hold an annual shareholders’ meeting or quotaholders’ meeting, as applicable, to, among other matters, (i) discuss the management accounts and the financial statements of the company; (ii) decide on the allocation of profits or losses of the year; and (iii) appoint the members of the company’s management.
For those companies which corporate year ended on December 31, 2021, the meetings must be held on or before April 30, 2022.
For such purpose, the management of the companies must provide to their quotaholders or shareholders, prior to such date, the balance sheet and other financial statements of the company, and publish such statements (along with the management report concerning the business of the company and the auditors’ report, if applicable).
Because of recent changes made to Brazilian corporate laws, Brazilian corporations, regardless of their annual gross revenue, are now under the obligation to publish their financial statements, which must include information related to each group and the respective classification of accounts or records, in comparison to the data of the previous fiscal year, as well as extracts of the relevant information included in the explanatory notes and, if applicable, in the opinions of the independent auditors and the fiscal council.
Among the main differences, as a result of said recent changes, we may highlight that: (i) all corporations are now required to comply with the publication (i.e., disclosure) obligations set forth in Law 6,404/1976 (Brazilian Corporations Law); (ii) the corporations are no longer required to publish their relevant documents in the Official Gazette; and (iii) for those with annual gross revenue of less than R$ 78 million, they are permitted to opt for making only the electronic publications.
Therefore, the rules currently in force establish that (i) corporations with annual gross revenue greater than R$78 million must publish their relevant documents in a newspaper with broad circulation in the location where the company’s headquarters are located; and (ii) those with annual gross revenue not exceeding said threshold can do so electronically, in the so-called Central de Balanços and on the company’s website
Limited liability companies, on the other hand, are still under the obligation to carry out their publications, as set out in Law 10,406/2002 (Brazilian Civil Code), in the Official Gazette and in another newspaper with broad circulation.
While there are different interpretations concerning the requirement for publication of the financial statements of limited liability companies considered as large-size companies, Dias Carneiro’s corporate team may analyze the specific situation of each company to instruct you appropriately.
Dias Carneiro Advogados is entirely available to provide any clarifications and to assist with this matter.
