Pursuant to article 1,078 of the Brazilian Civil Code (Law Nr. 10,406/02), shareholders and quotaholders must meet annually, within four months counted as of the end of the company’s fiscal year, in order to (i) approve the administrators’ account and discuss the company’s balance sheet and economic results; (ii) appoint administrators, when applicable and (iii) vote on any other subject included in the agenda.
For those companies whose fiscal year ends on December 31, the annual meeting corresponding to fiscal year 2019 shall be held up to April 30, 2020.
The meeting shall be convened in accordance with the company’s articles of association (or bylaws) and applicable legislation. Formalities for calling the meeting are not necessary when all members attend it or declare in writing that they are aware of the place, date, time and agenda. The company’s balance sheet and administrators’ account must be made available to the company’s shareholders / quotaholders at least 30 (thirty) days prior to the date scheduled for the meeting. Minutes of the meeting, signed by the members of the board and participating shareholders / quotaholders required to approve resolutions, shall be drawn up and filed for registration before the corresponding Commercial Registry.
With respect to those classified as large limited liability companies in accordance with Law 11,638/07, which are the companies under common control that had, in the previous fiscal year, total assets exceeding R$ 240,000,000.00 or gross annual revenue exceeding R$ 300,000,000.00, the provisions of the Brazilian Corporation Law (Law 6,404/1976) apply to bookkeeping, preparation of financial statements and mandatory independent auditing by an auditor registered with the Brazilian Securities and Exchange Commission (“CVM”).
Limited liability companies that are not considered large as defined by Law 11,638/07 must execute a statement attesting that they are not subject to the requirements of the referred law. This is because, although Law 11.638/07 does not expressly provide for the obligation of large liability companies to publish their annual balance sheets and financial statements, some Commercial Boards consider that the publication is mandatory, such as the Commercial Board of the State of São Paulo – JUCESP, by means of Deliberation Nr. 02/15 and the Commercial Board of the State of Rio de Janeiro – JUCERJA, by means of Statement Nr. 39.
It is worth mentioning that through the approval without reservations of the financial statements of the administrators, they are exempt from liability for actions taken in that fiscal year, unless error, fraud or simulation are detected.
We remind our clients that we are available to provide any clarification regarding the annual meeting, as bem as to assist them in drafting the respective Minutes and promoting their registration.
Shareholders / Quotaholders Annual Meeting.
