The Provisional Measure 931, dated March 30th, 2020 (“PM”) was enacted aiming to facilitate the production of acts by corporations, limited liability companies and cooperatives amidst the restrictions and social isolation caused by the coronavirus pandemic (COVID-19).
Among them, it is worth mentioning the extension of the deadline for the annual shareholders/quotaholders meetings and even the possibility of holding them in a digital manner.
According to the PM, corporations, limited liability companies and cooperatives, which fiscal years end between December 31st, 2019 and March 31st, 2020 may hold their respective annual ordinary assemblies or meetings within 7 months as of the end of the fiscal year.
Similarly, the deadlines for the management or performance of acts by officers, members of the fiscal council and statutory committees were extended until the date of the ordinary annual meeting. During this period of time, the board of directors, if installed, shall deliberate, ad referendum, on urgent matters within the competence of the shareholders meeting, unless the company’s By-Laws provide otherwise.
With respect to payment of dividends, the corporations are authorized to declare dividends through a decision of the board of officers or even the board of directors, if applicable, until the ordinary meeting is held, without any amendment to its By-Laws being necessary.
As long as the measures restricting the normal functioning of the Commercial Registries arising from the COVID-19 pandemic last, it shall be observed the following procedures with respect to corporate acts: (i) for acts subject to filing signed from February 16th, 2020, such as minutes of annual meetings and amendments to the by-laws, the 30 days deadline counting from its signature, shall be counted as of the date on which the respective Commercial Registry reestablishes the regular render of its services; and (ii) the requirement of prior filing of act for the issuance of securities and for other legal transactions shall be suspended as of March 1st, 2020 and the filing shall be made in the respective Commercial Registry within 30 days as of the date on which the Commercial Registry reestablishes the regular render of its services.
The meetings held in a semi-presential and digital manners
The MP alters provisions of the Brazilian Civil Code and of Brazilian Corporation Law to provide that member may participate and vote remotely in a meeting or assembly in accordance with the regulations of the National Department of Business Registration and Integration (“DREI”) of the Special Debureaucratization, Management and Digital Government Secretariat of the Ministry of Economy.
The Normative Ruling DREI No. 79/2020, dated April 15th, 2020 (“NR 79/2020”) regulates the remote attendance and voting in meetings and assemblies of closely held corporations, limited liability companies and cooperatives, which may be held in a semi-presential or digital manner.
Among the main features, we call the attention to the following:
1. The meetings or assembly will be considered as semi-presential, when the shareholders, quotaholders or associates are able to attend and vote both in person, at the physical location of the meeting or assembly, as well as remotely, by sending a remote ballot form and/or remote action, via electronic system. The digital meetings will take place when the shareholders, quotaholders or associate can only participate and vote remotely, and the meeting or assembly is not held in any physical location.
2. Presential meeting or assembly already called, but not held yet, due to restrictions and social isolation caused by the pandemic may be held in a semi-presential or digital manner, provided that all shareholders, quotaholders or associates are present or expressly stated their agreement, as further detailed in NR DREI 79/2020.
The electronic system to be used to hold the meetings or assembly, in all cases, in addition to ensuring the registration of attendance of shareholders, quotaholders or associates and their respective votes, shall also ensure, among other rights: (i) the possibility of manifestation and simultaneous access to documents presented during the meeting or assembly that have not been previously made available; (ii) the full recording of the meeting; and (iii) the possibility of communication between those present.
In order to regulate the semi-presential or digital assemblies of public held corporation, in accordance with NR DREI 79/2020 the Brazilian Security and Exchange Commission (“CVM”) has amended Resolution CVM 481 through the issuance of Resolution CVM 622, dated April 17th, 2020.
With regard to debenture holders meetings, the CVM held a public hearing on April 27th, 2020, the draft of a new regulation with the purpose of establishing conditions for holding digital meetings for holders of debentures issued by publicly held corporations offered publicly or admitted to trading on securities markets.
Our professionals are at the disposal of clients who need any clarification on the aforementioned legislation and on the impact of Covid-19 on their corporate routines: Eduardo Obino Cirne Lima ([email protected]), Lara Lebreiro ([email protected]) and Ana Clara Scofield ([email protected]).