The performance of Shareholders/Quotaholders Annual Meeting are mandatory for all Brazilian Corporations (S/A) and Limited Liability Companies (Ltda), for discussion and approval of financial statements as establish in Brazilian legislation (art. 132 of federal law 6.404/76 and art. 1.078 of the Brazilian Civil Code).
All Brazilian Corporations (S/A) and Limited Liability Companies (Ltda), on the four months following the end of the previous fiscal year (April 30th for most of companies), pursuant to article 132 of federal law 6.404/76 and article 1.078 of the Brazilian Civil Code, shall perform a Shareholders Annual Meeting (AGO) or a Quotaholders Meeting (RQ), respectively, for discussion and approval of:
- management’s report, exam, discuss and vote the company financial statements;
- approval of the destination of the net profit and distribution of dividends;
- appointment of directors and the members of the board of auditors, if the case may be.
The AGO and the RQ are mandatory and shall be performed annually, even if there are no directors to be appointed or profit to be distributed.
The minutes of the AGO and the RQ must be submitted for record before the Registry of Companies at the State where the company main office is located. Exclusively for Brazilian corporations (S/A), following the recording of the minutes of AGO it must be published in the state court record/journal and also in a newspaper published in the same location of the company main office.
It is important to highlight that for Brazilian corporations (S/A), previously to the performance of the AGO, the company management must make available to the shareholders, as well as publish the company´s financial statements, management’s report and auditor’s report, if the case may be, in the state court record/journal and also in a newspaper published in the same location of the company main office.
The approval of financial statements without reserves, discharge the officer for all and any management responsibility, except for those actions executed by mistake, fraud or simulation.
The publishing obligation of financial statements of Limited Liability Companies with large incomes (grande porte) is subject of legal discussion, administrative and judicial. This type of Limited Liability Company shall evaluate in each case the necessity of publishing of its financial statements.
Azevedo Sette’s Consultant Team is available for further clarifications and additional assistance upon this matter.