Changes to Corporate Rules: Online Meetings and Extended Deadlines

Updated on 20 April 2020

The Brazilian President has published a new Provisional Measure (Medida Provisária 931/2020, “MP”) addressing corporate issues. The MP:

• extends the dates for holding a meeting of shareholders from three months to seven months after the end of the company’s accounting year due to the coronavirus outbreak (in practice, the means that for the vast majority of the companies the due date is now 31 July 2020 instead of 30 April 2020);

• deems ineffective any contractual term that sets out, for 2020, a period of less than seven months after end of the company’s accounting year for holding the meeting ;

• extends the terms of directors and non-executive board members (conselheiros) until the meeting is held, allowing companies to declare dividends;

• allows the Brazilian Securities Commission (Comissão de Valores Mobiliários, “CVM”) to extend all deadlines for public listed companies in 2020;

• extends deadlines for annual filings of certain types of companies, including foreign branches, that were due from 16 February 2020;

• permits companies to issue securities “and other transactions” from 1 March 2020;

• revokes the obligation that shareholders be personally present at shareholder meetings (this is still subject to a regulation to be issued);

• allows shareholder meetings to be held in a location other than the company’s registered office (headquarters) in cases of force majeure (for as long as it is the same city and clearly marked in the notice of meeting) and for public listed companies, have the meeting held digitally.

On 15 April 2020, the National Department of Enterprise Registration and Integration (“DREI”) published Normative Instruction DREI 79/2020 (the “NI”) setting out the rules for virtual and partially virtual meetings for limited liability companies (sociedades limitadas), corporations (sociedades anônimas) and cooperatives.

The NI provides rules for two types of virtual meetings:

• partially virtual meetings (semipresenciais), where some shareholders may be physically present at the meeting and some may attend virtually; and

• online meetings (digitais), where none of the shareholder can be physically present.

Notices of meetings will need to highlight that the meeting will be partially virtual or digital.

Documents and information relating to the meeting will need to be publicised like in normal meetings but the information will also need to be send to shareholders electronically.

Voting may be effected by distance ballot or via an electronic system. The system will need to use accessible technology. Among other things, the system will need to allow for documents to be viewed by those attending virtually, for written questions to be asked from the presiding panel and for a full recording of the meeting (which will be stored at the entity’s registered office).

On 20 April 2020, the CVM published Instruction CVM 622/2020 setting out the rules applicable to public-listed companies. The rules largely reflect those set out the NI issued by the DREI for the private companies (addressed further above).

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Brazil Brazilian corporate law Brazilian Securities Commission Compliance coronavirus Corporate law Covid-19 CVM Foreign branch Shareholder meetings Sociedade Anônima Sociedade Limitada Subsidiary

Last modified: October 10, 2021