All Brazilian Corporations and Limited Liability Companies, 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 or a Quotaholders Meeting, 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; and
- approval of the inflation adjustment of the capital of the company (art. 167).
The AGO and the RQ are mandatory (art. 132 of federal law 6.404/76 and art. 1.078 of the Brazilian Civil Code) and shall be performed annually, within the term and conditions determined for the approval of the matters indicated by the legislation. Regardless the necessity of Directors or Officers elections or the existence of profits distribution, the execution of the AGO and RQ are mandatory for each fiscal year.
The minutes of the AGO and the RQ must be registered before the Commercial Registry at the applicable State in which the company’s head office is located. Exclusively for Brazilian corporations, following the register of the minutes of AGO it must be published in the Official Gazette of the State and also in other widely circulated newspaper on the location of the company’s head office.
It is important to highlight that for Brazilian corporations, previously to the performance of the AGO, the company´s 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 Official Gazette of the State and also in other widely circulated newspaper in the same location of the company’s head office.
The approval of financial statements without reserves, discharge the officer from 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 is subjected to some legal administrative and judicial discussion. In this sense, this type of Limited Liability Company shall evaluate in each case the necessity of publishing its financial statements.
Azevedo Sette’s Corporate Team is available for eventual further clarifications and additional assistance upon this matter.