Government measures in key jurisdictions 4th edition - Flipbook - Page 21
Brazil
Such rules had previously been established by Provisional Measure No. 931 and by Law No. 14.010,
issued by the Federal Government on June 10th to set forth transitional regulations in case the
provisional measure wasn’t converted to Law before the two-month deadline (Law No. 14.010). But
law 14.030 came with news: the possibility of digitally held general meetings no longer has an
expiration date, it is now a permanent alteration to the previous regimen, as is the possibility
that shareholders participate remotely.
With respect 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 faceto-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.
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”) had issued, in April, Normative Instruction No. 79, in
order to regulate the digital general meetings with remote participants. Later, Normative Instruction
No.81, issued on July 1st by the same department, revoked Normative Instruction No. 79, and
established, detailed rules on the way digital or hybrid general meetings should be summoned and
held, as well as how participants can take part in the meeting and vote, either participating remotely
or via a voting form.
Specifically, regarding the general meetings that were scheduled to be in locu but could not be held
due to the Covid-19 pandemic, Normative Instruction No.81 established that they can be replaced by
a digital meeting, as long as all shareholders are present or expressly agree to the new format.
There are certain 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 shareholders, possibility of shareholders to manifest themselves
during the meetings; full recording of the meetings and storage of recordings, possibility to access
documents presented during the meetings, among others.
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, Law 14.030 also
confirmed that 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, has been extended to seven
months for the year 2020. 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