May 2020 – Brazil – Rossetti Advogados
Due to the adversities caused by the Covid-19 pandemic, the Corporate and Integration Registration Department (DREI) published, on April 14, 2020, Normative Instruction No. 79 (“DREI Instruction No. 79”), which sets forth the rules for remote participation and voting in meetings of closely-held corporations, limited-liability companies and cooperatives, in attention to the provisions of Provisional Measure No. 931 of March 30, 2020.
DREI Instruction No. 79 created the possibility of conducting completely virtual (also named digital) meetings, in which case the meeting will not be conducted at any physical site. In these meetings, which shall be deemed held at the principal place of business for all legal purposes, the participants may vote by distance voting bulletin and/or remotely, by means of an electronic system.
- A. Call notice, opening and resolutions in digital meetings
In these cases, Article 2 of the Instruction sets forth that the call notice shall inform the rules with respect to the call notice, opening and resolutions, as well as if the meeting will be semi-presential or digital, the list of documents required for admission of the members or their legal representatives, and detail the mechanisms to be used to implement them (or inform the electronic address where such complete information will be available).
- B. Corporate documents and attendance
With respect to the corporate documents relating to the meeting, they will be provided to the members by the means already known and set forth in the law applicable to the company type, but they will also be provided by secure digital means. In addition, the sole paragraph of article 4 of the Instruction determines that the company must keep them in its files, as well as that they be completely recorded, for the term during which any annulment may be claimed.With respect to the attendance, the following members shall be deemed present at digital or semi-presential meetings: (i) those who attend or are physically represented therein; (ii) those whose distance voting bulletin has been deemed valid by the company; or (iii) those who, either personally or by means of a representative, record their attendance in the participation and distance voting electronic system provided by the company. For certification of the attendance, the respective minutes and corporate books may be individually signed by the chairman and secretary of the board.
- C. Distance voting bulletin
DREI Instruction No. 7 also provided on the format and contents of distance voting bulletins, which shall contain: (i) a description of all items of the agenda of the meeting; (ii) instructions on how to send it to the company, jointly with the documents required to confirm the identity of the shareholder or member; and (iii) instructions on the formalities required for the vote to be deemed valid.We further note that the company has the duty to provide said distance voting bulletin in printable version, which may be manually completed, by means of an electronic system, and the shareholder or member shall complete and return it to the company at least five (5) days before the date of the meeting and within up to two (2) days as from receipt thereof. The company shall inform if the documents sent are valid or if it will be necessary to rectify them, describing the procedures and terms required for regularization. The rectification or new remittance of the distance voting bulletin or of the accompanying documents shall always observe the term of five (5) days before the date of the meeting.Finally, we note that DREI Instruction No. 79 not only helps the social distancing in times of pandemic, but also reduces the bureaucracy and modernizes the corporate routine.The instruction has neither informed the technological tools to be adopted by the companies for the digital or semi-presential meetings nor provided on technical and operational details relating thereto. It has only defined the minimum requirements for the meetings to be held with legal certainty.
The choice of the most appropriate system shall be incumbent upon the company, which, considering the dynamics of its meetings, may define the best tool to be used, it being understood that the companies cannot be held liable for problems relating to the Internet connection or to the equipment used by the shareholders or members or for any other situation beyond their control.
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.