April 2020 – Brazil – Rossetti Advogados
Due to the Brazilian Provisional Measure No. 931, published on March 30, 2020, we report below the main changes that produce significant effects:
- Extension of the Term & Effects. The statutory term for the conduction of annual shareholders’ meetings and annual meetings of members to approve financial statements and management accounts relating to the fiscal year ended between December 31, 2019 and March 31, 2020 was exceptionally extended from four (4) to seven (7) months as from the end of the fiscal year.
It was further established that (i) contractual provisions requiring the conduction of an annual shareholders’ meeting or meeting of members within a term shorter than the aforementioned term shall be deemed void in the fiscal year 2020; (ii) the management terms or the terms for actions of the managers, members of the fiscal council and of committees established by the By-Laws are extended until conduction of the annual shareholders’ meeting or until conduction of the meeting of the board of directors, as the case may be; (ii) except as otherwise provided in the By-Laws, the board of directors shall resolve, ad referendum, upon urgent matters the shareholders’ meeting is empowered to resolve upon.
- Remote Participation. The Provisional Measure also amended provisions of the Civil Code and of the Corporation Law to expressly authorize the remote participation and voting in meetings of members of limited-liability companies and in shareholders’ meetings of closely-held joint-stock companies. However, this matter is still conditional upon regulations to be issued by the competent department of the Ministry of Economy (National Corporate Registry and Integration Department of the Special Office for the Reduction of Bureaucracy, Management and Digital Government of the Ministry of Economy).
- Dividends. In relation to the payment of dividends, the provisional measure sets forth that, until conduction of the annual shareholders’ meeting, the board of directors, if any, or the executive board may declare dividends irrespective of amendment to the By-Laws, pursuant to the provisions of Law (article 204 of Law No. 6.404/76).
- Commercial Registry – registration of corporate documents. For the duration of the measures restricting the normal operation of the commercial registries exclusively as a result of the Covid-19 pandemic, the following criteria shall be observed:
(i) for acts subject to filing signed as from February 16, 2020, the term of thirty (30) days as from signature for submission for filing, aiming at the production of effects to third parties retroactively to the execution date (article 36 of Law No. 8.934/94) shall now be counted as from the date on which the respective commercial registry reestablishes the regular provision of its services; and
(ii) the requirement of prior filing of an act for the issue of securities and for other legal transactions is suspended as from March 1st, 2020,and the filing shall be made with the respective commercial registry within thirty days as from the date on which the commercial registry reestablishes the regular provision of its services.
This article is based on publicly available information and given for informational purposes only. It is not intended as legal advice or as a comprehensive analysis of the matters referred to herein.