This March is the deadline for Brazilian corporations and limited liability companies (Ltda.) prepare and disclose the mandatory corporate documents.
We highlight 4 recurring doubts about its preparation, approval and dissemination of this documents, named as ordinary general assembly.
1. What is the deadline for convening shareholders? In corporations, administrators must notify shareholders within 30 days before the scheduled date for the meeting. Therefore, the call will be made through an announcement published at least three times, and must contain: (i) location; (ii) time of the meeting; (iii) order of the day; and (iv) in cases of reform of the bylaws, an indication of the matter to be changed. The first announcement occurs at least 8 days in advance; and if the meeting is not held, the second call notice will be published, with a prior period of 5 days.
2. What matters can be the subject of the assembly? The ordinary general assembly must be held within 4 months following the end of each fiscal year to: (i) review the administrators’ accounts, examine, discuss and vote on the financial statements; (ii) decide on the allocation of net profit for the year and the distribution of dividends; (iii) elect the administrators and members of the fiscal council, when applicable; and (iv) approve the correction of the monetary expression of the share capital.
3. What documents are required? The law provides that the management documents are: (i) management report on the company’s business and the main administrative facts of the closed fiscal year; (ii) copy of the financial statements; (iii) if applicable, opinion from independent auditors; (iv) opinion of the fiscal council, including dissenting votes, if applicable; and (v) other documents relevant to the issues on the agenda.
4. What is the correct procedure for disclosure? The management documents of stock companies must be published in a newspaper of wide circulation published in the location where the company’s headquarters are located, in a summarized form and with the simultaneous publication of the documents on the company’s website. Authenticity certifications can be obtained within the scope of ICP-Brasil.
In the case of financial statements, the publication in summary form must contain, at a minimum, a comparison with data from the previous year; global information or values relating to each group and the respective classification of accounts or records; extracts of the relevant information included in the explanatory notes and in the reports of the independent auditors and the fiscal council, if any.
There are some exceptions that simplify publication for companies with low annual gross revenue or net worth, which must be analyzed on a case-by-case basis.
Compliance with these requirements is essential for companies, as this is the way to prevent shareholders, including minority shareholders, from questioning the acts carried out during the year by the board and management and, mainly, eliminates the possibility of invalidating decisions and actions taken by management.
