MP 931 brings changes for limited companies and cooperatives

Provisional Measure No. 931, published on March 30, 2020

Provisional Measure No. 931, published on March 30, 2020, brings new rules for corporations, limited liability companies, cooperative societies and cooperative representation entities on various matters, such as the term for holding meetings, the mandate of directors, resolution of urgent matters, dividends, presentation of financial statements, filing of acts with the Board of Trade, remote voting, among others.

The ordinary general meeting that is held annually, in the first four months following the end of the fiscal year, in public limited companies, the shareholders’ meeting that must be organized annually in limited companies and the ordinary general meetings of cooperative companies and representative entities of cooperatives, even credit unions may be held, exceptionally, within seven months, counting from the end of the fiscal year, for those legal entities in which this event occurred between 12/31/2019 and 03/31/2020, making without effect, in fiscal year 2020, contractual provisions that require the meeting to occur, in public limited companies and limited liability companies, within a period of less than the seven months previously mentioned, which also applies to public companies, mixed-capital companies and their subsidiaries.

The aforementioned seven-month extension causes effects on the terms of management or performance of administrators, members of the fiscal council and statutory committees, in corporations, the mandate of administrators and members of the fiscal council, in limited companies, and mandate of the members of the management, supervisory and other bodies provided for in the cooperatives’ bylaws until the meetings that have been postponed are held, or even in the case of public limited companies that the board of directors meet.

In public limited companies, the Provisional Measure provides for other specificities, stipulating that urgent matters within the competence of the general meeting may be resolved by the board of directors ad referendum, except for a different provision in the bylaws; the declaration of dividends to the account of the profit on the balance sheet may be made, regardless of the amendment to the bylaws, by the board of directors or the executive board, until the annual general meeting is held; the Securities and Exchange Commission (CVM) will set the date for the presentation of the financial statements of publicly-held corporations, as well as extending other terms set forth in the Brazilian Corporation Law.

The filing of documents related to the constitution, alteration, dissolution and extinction of legal entities; acts related to consortium and group of companies provided for in the Brazilian Corporation Law; acts of foreign companies authorized to operate in Brazil; microenterprise statements; among others that should be presented at the Commercial Registry within 30 days, counted from their signature, may be presented within 30 days counted from the reestablishment of the regular provision of services by the Commercial Registry, as long as signed from 02/16/2020.

The MP also established the possibility of participation and remote voting in the deliberations between the partners, in the limited company and of the member of the cooperative in assemblies, a practice that will still be regulated by the National Department of Business Registration and Integration of the Special Department of Bureaucratization, Management and Digital Government of the Ministry of Economy.

In publicly-held corporations, participation and remote voting at a general meeting by the shareholder will depend on CVM regulation, whereas in closed companies, this shareholder’s participation will be subject to regulation by the Special Secretariat for Debureaucratization.

By: Wilson Sales Belchior