Government measures in key jurisdictions 3rd edition final - Flipbook - Page 22
Brazil
Company
law matters
Have any measures
been put in place to
accommodate social
distancing (such as
remote general
meetings)?
Provisional Measure No. 931, issued by the Federal Government on March 30th, 2020 (“Provisional
Measure No. 931”), brought some amendments to the Brazilian Civil Code and to the Brazilian
Corporations Law in order to, among other matters, allow shareholders to remotely participate and vote
in general meetings.
For privately held corporations (“sociedades por ações”), and limited liability companies (“sociedades
limitadas”), the National Department of Business Registration and Integration (“Departamento Nacional
de Registro Empresarial e Integração”) issued the Normative Instruction No. 79 in order to regulate the
changes established by Provisional Measure No. 931 (“Normative Instruction No. 79”).
In summary, Normative Instruction No. 79 allows now the general meetings to occur (i) exclusively
digitally, in which case participation and vote would only occur remotely, or (ii) in a semi-attending
structure, in which the meeting would take place physically, but quota/shareholders would be allowed
to attend and vote remotely.
Additionally, Normative Instruction No. 79 extended the possibility of using voting forms – which were
already in use by publicly held companies - to all corporate types, in order to ease and expedite the
process of remotely voting.
Call notices of the such meetings must inform the structure in which it will take place, describing how
shareholders may participate and vote. The same rule applies to the minutes of the meetings, which
must specify if the meeting was held exclusively of partially digitally.
As to publicly held corporations, since the issuance of the Brazilian Securities and Exchange Commission
(“CVM”) Instruction 561/15, which also introduced the distance voting instrument, publicly held
companies have already been able to hold "hybrid" meetings, in which there is a face-to-face meeting
(similar to a traditional meeting), but with the possibility for shareholders to participate and vote
remotely, via electronic system.
As a result of the Covid-19 pandemic, CVM took a further initiative and issued the Normative Instruction
No. 622, which allows publicly held companies to hold general meetings exclusively virtually.
Additionally, by relaxing the rule that obliges companies to hold meetings in the headquarters building
or, in case of force majeure, in another location in the same Municipality as its headquarters, the CVM
now allows, in exceptional situations, that general meetings partially held in digital mode have their “in
person portion” held outside the company's headquarters building, and may even occur in another
Municipality.
It is important to note that there are a series of legal requirements the electronic system used to
broadcast the meetings must comply with, such as insurance of transparency, confidentially and security
of the meetings, mechanisms to register the attendance of the quota/shareholders, possibility of
shareholders to manifest themselves during the meetings; full recording of the meetings, possibility to
access documents presented during the meetings, among others.
Since Provisional Measure No. 931 may expire on July 30th (if not converted into law by the Congress),
Law 10.404 was published on June 10th reassuring that until October 30th, 2020, all corporate meetings
may be held digitally, regardless of the set forth in the respective corporate documents.
In addition to remote general meetings, other measures have been put in place to accommodate social
distancing and the current scenario caused by COVID-19. Among others, the deadline to hold the annual
general meetings, that are legally binding to occur in the first four months counted as of the termination
of the fiscal year, was extended to seven months. Furthermore, the general thirty-day period to file
corporate documents with the competent Board of Trade was suspended and will resume once the
services are regularly reestablished.
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Government measures in key jurisdictions