Brazilian regulation provides that the partners/shareholders of the Brazilian companies shall meet annually to review the management accounts, discuss and vote the financial statements and decide on the destination of the year-end results, as well as, as the case may be, appoint managers and members of the audit board.
The annual general meetings must be held within the first 4 months after the end of the fiscal year. In Brazil, the fiscal year-end usually coincides with the end of the calendar year and, therefore, the General Partners' or Shareholders' meeting shall normally occur until April 30th.
LIMITED LIABILITY COMPANIES
In relation to the limited liability companies, the financial statements must be disclosed to the non-manager partners before the annual meeting. The decisions taken in such meeting shall be reflected in the minutes, which must be registered at the competent Board of Commerce.
Large-sized companies or group of companies under common control are the ones which, according to Law 11,638/07, have presented, in the last fiscal year, total assets greater than R$ 240 million or gross income greater than R$ 300 million.
The Board of Commerce of the State of São Paulo ("JUCESP"), through the Deliberation JUCESP no. 02/2015, understands that the companies and cooperatives that fit into the "large-sized" description must publish their financial statements in the newspapers before filing the Minutes of Partners or Shareholders Meeting which approved such statements at JUCESP.
In order to release the company that is not considered a large-sized company from publishing its financial statements, it must present a declaration attesting that the company is "not large".
In relation to corporations, they must, as a rule, publish their financial statements at least 1 month before the date of the General Shareholders' Meeting ("AGO"), in which they will take the relevant decisions. The financial statements must, later, be filed at the Board of Commerce.
The corporation may, alternatively, publish a notice to the shareholders at the same timeframe previously mentioned (at least 1 month), informing that the financial statements are available at its headquarters and publish them at least 5 days prior to the AGO. If all shareholders attend the meeting, such periods can be dismissed, but the publication of the financial statements must be done prior to the AGO. Corporations with less than 20 shareholders and net equity adding up to R$ 10 million are released from the obligation of publishing their financial statements.
The Minutes of the AGO must be registered at the competent Board of Commerce.
Publicly held companies shall also observe the provisions established by the Normative Instruction of the Brazilian Security Exchange Commission (CVM) no. 481/2009 and the guidelines issued by Circular Letter CVM/SEP no. 1/2020, published by CVM's Superintendence of Corporate Relations on February 5th, 2020. The delay on the disclosure of its financial statements is considered a serious breach by CVM and the company may be liable to pay a daily fine.
Our team will be pleased to assist you with the elaboration of the corporate documents required to formalize the approval of the 2019 accounts and to discuss alternatives on the publication of financial statements for the large-sized limited liability companies.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.