Privately held corporations with less than 20 shareholders and a net worth lower than R$10 million are no longer required to publish financial statements and calls for meetings in official gazettes and large newspapers. The main outcome of this change is a reduction of costs associated with general shareholders meetings.
What are the changes?
• Mandatory publication of calls for general shareholders meetings, copies of financial statements, administration reports, audit reports and other documents set forth in article 133 of the Corporations Law is no longer required for privately held corporations with less than 20 shareholders and a net worth lower than R$ 10.000.000,00. Calls by means of notices to be delivered to all shareholders and registration of financial statements and call receipts with the Board of Trade remain mandatory. This change updates the net worth amount for corporations not required to comply with this obligation, which used to be R$ 1 million and was outdated.
• When required, publications will have to be made in abridged form in official gazettes and large newspapers, with concurrent disclosure of the full text of such documents on their respective web pages.
Abridged form?
• With regard to financial statements, an abridged form shall mean comparables of data pertaining to the previous accounting years, overall information or figures relative to each group and respective classification of accounts or logs, as well as summaries of relevant information set forth in explanatory notes, audit reports and opinions issued by audit committees, if any.
Are the new rules in force?
• As of today, publications are no longer required for corporations with less than 20 shareholders and net worth lower than R$ 10.000.000,00 (ten million reais).
• Publications in abridged form with concurrent online disclosure shall only enter into force on January 1st, 2022.
Azevedo Sette Advogados Corporate Consulting team is at your disposal to provide guidance and clarifications on this matter.