Luciana Magnolo Onofre
Lawyer at Marcos Martins Advogados
Every year, companies must submit their accounts to their shareholders for approval at the Annual General Meeting. Article 133 of the Brazilian Corporation Law, Law No. 6,404 of December 15, 1976, establishes the mandatory prior publication in a widely circulated newspaper of management reports, financial statements, independent auditors’ reports, audit committee reports and other pertinent documents, so that shareholders can examine, discuss and vote on the management accounts.
The legislator’s aim when establishing mandatory publication was to give third parties visibility of the company’s business , preventing or at least minimizing any possibility of fraud.
The exception to the prior publication rule was for closed companies with annual gross revenue of up to R$78 million. However, with the advent of Complementary Law No. 182, of June 1, 2021, this exception was removed from the legislation, meaning that even privately-held companies with annual gross revenue of less than R$78 million are now obliged to make such publications.
The new law also simplified the mandatory publication process, consisting of publication in summary form and dispensing with the use of the Official Gazette.
So that there is no doubt about this obligation, the National Department of Business Registration and Integration – DREI, published a rectification to DREI Normative Instruction No. 112, of January 20, 2022, in order to make clear the need to publish the documents that make it possible to take account of the administrators, even if all the shareholders are present at the General Meeting, including for closed companies with annual gross revenue of less than R$ 78 million.
Publications must be made in summary form in the printed newspaper and, at the same time, the full document must be published on the same newspaper’s website. Closed companies with annual gross revenue of less than R$78 million may publish their financial statements on the Central de Balanços – CB of the Public Digital Bookkeeping System – SPED and on the company’s website.
As the deadline set by law for the management accounts to be taken is approaching, it is important that all public limited companies observe the prior procedures related to the publication in widely circulated newspapers of the documents necessary for the assessment of the accounts by the shareholders, in compliance with the rules and legislation in force.
Marcos Martins Advogados reaffirms its commitment as a Business Partner, seeking strategic solutions, always attentive to the legal changes that impact its clients and meeting their needs.
