According to Article 1078 of the Brazilian Civil Code (Law No. 10,406/2002) and to Article 132 of the Brazilian Corporate Law (Law No. 6,404/1976), Brazilian limited liability companies and corporations must hold, every year, an Annual General Quotaholders’ Meeting or an Annual General Shareholders’ Meeting, respectively, within 04 (four) months after the end of the preceding fiscal year, in order to deliberate about the:
(I) accounts rendered by company’s officers and to examine, discuss and vote the balance sheets and economic financial statements of the company related to the preceding fiscal year (which generally starts on January 1st and ends on December 31st of each year). If deemed convenient, the quotaholders/shareholders may also examine the accounts related to any past fiscal year at the same event;
(II) allocation of net profits of the preceding financial year and on the distribution of the profits and dividends, as the case may be; and
(III) election of officers, directors and the members of the audit committee, if any.
The minutes of the Annual General Quotaholders’ Meeting or Annual General Shareholders’ Meeting of the company must be further (a) registered with the Commercial Registry of the location of its head offices in order to be effective against third parties, and (b) registered in the Minutes of Quotaholders’/Shareholders’ Meeting Book of the company, as provided for by law.
In addition, the approval of the accounts, balance sheets and economic financial statements by the quotaholders/shareholders exempts the liability of the members of the management of the company towards the quotaholders/shareholders in relation to such accounts. Individuals that are both officers and quotaholders/shareholders of the company are legally required to abstain themselves from voting such balance sheets and economic financial statements.
This article is intended exclusively to provide information and does not contain any opinion, recommendation or legal advice from Felsberg Advogados in relation to the issues addressed.