What must be done? All limited liability companies and corporations, regardless of their size, must hold, annually, the respective Annual Shareholders’ or Members Meeting, as stipulated by articles 1,078 of Law 10,406/2002 (“Code Civil”) and 132 of Law 6,404/1976 (“Corporations Law”). The purpose of these acts is to resolve on:
(i) Management accounts, examine, debate, and vote on financial statements;
(ii) The allocation of net profit of the period and the distribution of dividends, if applicable; and
(iii) Election of managers and members of the audit committee, when necessary.
When it must be done?
The Annual Shareholders’ or Members Meeting must take place within four months following the end of the fiscal year and its respective minutes must be registered with the Registry of Commerce of the State in which the company’s headquarters is located. Taking into account that the fiscal year of most Brazilian companies ends on December 31 of each year, the Annual Shareholders’ or Members Meeting, in these cases, must be held by April 30, 2024.
It is not advisable, however, to leave this task until the last moment. Before the actual holding of the Meeting, companies must observe and comply with a series of preparatory steps, some of which are necessary at least 30 days in advance of the date scheduled for the Meeting. In the case of corporations, for example, managers must make the following documents available to shareholders (in accordance with article 133 of the Corporations Law).
(i) Management report on corporate business and the main administrative facts for the year just ended;
(ii) Copy of financial statements;
(iii) Opinion of independent auditors, if any;
(iv) Opinion of the audit committee, including dissenting opinion, if any; and
(v) Other documents relevant to matters included on the agenda.
Analysis, discussion, and voting in relation to companies’ financial statements are not just a formal procedure, as they represent a legal obligation that goes beyond the simple risk of possible inspection. These steps provide shareholders with the opportunity to examine the actions taken by managers during the fiscal year and request clarification on the responsibilities assumed by the company. Furthermore, the approval, without reservations, of managers accounts by members or shareholders, in fact, exempts managers from liability.
In-person or remote format?
Both. Since 2020, legislation has started to authorize the holding of Meetings digitally, as long as the legally stipulated rights of participation and expression of members or shareholders are observed, along with other regulatory requirements. This adjustment facilitated the holding of meetings and the effective participation of members and shareholders.
Where to publish?
After the latest changes in legislation, corporations, both publicly and privately held, with annual gross revenue exceeding BRL 78,000,000.00 must carry out mandatory publications, such as notices of meetings, management reports, financial statements, independent auditors’ report, among others, in a newspaper with large circulation, in its digital and printed versions, which is published in the location where the Company’s headquarters is located. Therefore, it is no longer necessary to publish these documents in official newspapers (DOU, DOE), as it was previously required.
Furthermore, Resolution 166 of the Securities and Exchange Commission (“CVM”) allowed smaller publicly held companies, which have annual gross revenues of less than BRL 500,000,000.00, to carry out the publications ordered by Law No. 6,404, of 1976 or provided for in the regulations published by the CVM, through the Empresas.NET or Fundos.Net Systems, as applicable.
On the other hand, privately held corporations with annual gross revenue of up to BRL 78,000,000.00 now have the option of carrying out their publications only in the Balance Sheet Center (CB) of the Public Digital Bookkeeping System (SPED), waiving the publication in a printed or digital version of a mass circulation and official newspaper. With the publication of ME Ordinance No. 10,031/2022, it is also no longer mandatory to make publications available on the Companies’ websites in the latter case.
In the case of limited liability companies, the Third Panel of the STJ agreed on the understanding that large-sized companies no longer need to publish their financial statements to enable the registration of approval of accounts. Therefore, in the case of limited liability companies, of any size, the publication of financial statements is optional, and the Registries of Companies cannot require publication to record the minutes of the general meeting for approval of accounts.
The Corporate team of Azevedo Sette Advogados is available to analyze your case and provide clarifications and additional measures on the matter, including advising on the preparatory steps and effective holding of the Annual Shareholders’ or Members Meeting.
*With contribution from Laura Sena Braga Pimenta