Government measures in key jurisdictions 5th edition - Flipbook - Page 21
Brazil
Company
law matters
Have any
measures been put
in place to
accommodate
social distancing
(such as remote
general meetings)?
Law No. 14.030, issued by the Federal Government on July 28th 2020 (Law No. 14.030),
converted into definitive regulations most of the measures that had previously been set
forth by Provisional Measure No. 931, issued on March 30th 2020 (“Provisional Measure No.
931”). The law confirmed some amendments to the Brazilian Civil Code and to the Brazilian
Corporations Law, among other laws.
One of the rules established by Law No.14.030 is that all corporate meetings may be held
digitally. It also determined that shareholders should be able to participate and vote via
any electronical means that are appointed by the management, as long as it is secure and
enables the identification of the shareholder.
Such rules had previously been established by Provisional Measure No. 931 and by Law No.
14.010, issued by the Federal Government on June 10th 2020 to set forth transitional
regulations in case the provisional measure wasn’t converted to Law before the two-month
deadline (Law No. 14.010). But law 14.030 came with news: the possibility of digitally
held general meetings no longer has an expiration date, it is now a permanent alteration to
the previous regimen, as is the possibility that shareholders participate remotely.
With respect to publicly held corporations, since the issuance of the Brazilian Securities
and Exchange Commission (“CVM”) Instruction 561/15, which also introduced the distance
voting instrument, publicly held companies have already been able to hold "hybrid"
meetings, in which there is a face-to-face meeting (similar to a traditional meeting), but
with the possibility for shareholders to participate and vote remotely, via electronic
system.
As a result of the Covid-19 pandemic, CVM took a further initiative and issued the
Normative Instruction No. 622/2020, which allows publicly held companies to hold general
meetings exclusively virtually.
Additionally, by relaxing the rule that obliges companies to hold meetings in the
headquarters building or, in case of force majeure, in another location in the same
Municipality as its headquarters, the CVM now allows, in exceptional situations, that
general meetings partially held in digital mode have their “in person portion” held outside
the company's headquarters building, and may even occur in another Municipality.
For privately held corporations (“sociedades por ações”), and limited liability companies
(“sociedades limitadas”), the National Department of Business Registration and Integration
(“Departamento Nacional de Registro Empresarial e Integração”) had issued, in April 2020,
Normative Instruction No. 79, in order to regulate the digital general meetings with remote
participants. Later, Normative Instruction No.81, issued on July 1st 2020 by the same
department, revoked Normative Instruction No. 79, and established, detailed rules on the
way digital or hybrid general meetings should be summoned and held, as well as how
participants can take part in the meeting and vote, either participating remotely or via a
voting form.
Specifically, regarding the general meetings that were scheduled to be in locu but could
not be held due to the Covid-19 pandemic, Normative Instruction No.81 established that
they can be replaced by a digital meeting, as long as all shareholders are present or
expressly agree to the new format.
There are certain requirements the electronic system used to broadcast the meetings
must comply with, such as insurance of transparency, confidentiality and security of the
meetings, mechanisms to register the attendance of the shareholders, possibility of
shareholders to manifest themselves during the meetings; full recording of the meetings
and storage of recordings, possibility to access documents presented during the
meetings, among others.
Government measures in key jurisdictions
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