Jéssica Chaves Costa
Lawyer at Marcos Martins Advogados
On August 5, 2021, the National Congress concluded the analysis of Provisional Measure No. 1,040, which is now being processed under the nomenclature of Conversion Bill (PLV) No. 15/2021, and is currently awaiting the sanction of the President of the Republic.
The PLV provides for easier procedures for starting a business, measures to protect minority shareholders, facilitating foreign trade, reducing bureaucracy and business modernization, among other provisions that modify Brazilian legislation.
One of the changes is the expansion of the duties of the National Department of Business Registration and Integration (DREI). In addition, the law provides for a unique registration identification number in the context of the process of opening and registering companies, exemption from notarization, the possibility of using the CNPJ registration number as the business name and permission to register acts of commercial companies with a similar name, but not identical to another that already exists.
Among other relevant changes, the Law of Corporations, Law No. 6,404/1976, was also amended, giving General Meetings greater powers in deciding company business, as is the case with publicly traded companies, where the General Meeting will assume sole responsibility for transactions whose value corresponds to more than 50% (fifty percent) of the company’s assets. In addition, when the criteria of relevance to be defined by the Brazilian Securities and Exchange Commission (CVM) are met, the General Shareholders’ Meeting must also decide on transactions with related parties, thus enabling minority investors to have an active voice in significant disposals and contributions.
Another significant change is that company directors are allowed to officially reside abroad. The tenure of a director residing or domiciled abroad will be conditional on the constitution of a representative residing in Brazil to receive summonses in actions brought against him, based on corporate legislation, as well as summonses and subpoenas in administrative proceedings brought by the CVM, in the case of holding a management position in a public company. There is no doubt that this permission benefits multinational companies, which are often forced to transfer their managers to Brazil in order to run their subsidiaries.
Considering the above, despite the discussions and criticisms of the text, these legislative proposals are beneficial and, once sanctioned by the President of the Republic, could provide a less bureaucratic and more attractive business environment for investors.
Is this subject of interest to you? The team at Marcos Martins Advogados has extensive experience in corporate law and is qualified to help your company adapt to the legislative changes that will occur with the sanction of PLV 15/2021.
About Marcos Martins Advogados:
Founded in 1983, Marcos Martins Advogados is highly regarded in the areas of Corporate, Business, Tax and Labor Law. Based on values such as commitment, ethics, integrity, transparency, responsibility and the constant specialization and improvement of its professionals, the firm positions itself as a true partner for its clients.
