Check below the most important news of March.
Corporate and M&A
Annual Partners/Shareholders Meeting
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 meetings shall be held within the first 4 months after the end of the fiscal year. In Brazil, the fiscal year-end normally occurs simultaneously with the end of the calendar year on December 31, thus the ordinary partners/shareholders meeting shall usually be held until April 30.
Limited Liability Companies. Regarding the limited liability companies, prior to the annual meeting, the partners must receive the financial statements and the economic results of the company. The decisions taken in the meeting shall be reflected in the minutes that must be registered with the competent Board of Commerce within 20 days as of the date of the meeting.
Based on the terms of JUCESP resolution no. 2/2015, large corporate companies and cooperatives, regardless of the corporate type (including limited liability companies), shall evidence the publication of their financial statements in the newspapers usually used by the company, to file the Minutes of partners or shareholders Meeting which approved such statements.
According to Law no. 11.638/07, companies or group of companies under common control which have, on their last fiscal year, total assets greater than R$ 240 million or gross income greater than R$ 300 million are considered large companies. Companies which present a statement, signed by a legal representative jointly with an accountant attesting that the company is not large are released from publishing their financial statements.
Corporations. In relation to corporations, the decisions shall be taken in an Ordinary Shareholders' Meeting ("AGO"). At least 1 month prior to the AGO, the company must publish its financial statements, which shall subsequently be registered with the Board of Commerce. Alternatively, the company can publish a notice to the shareholders, within the term above, informing that the financial statements are available in the headquarters and publish the financial statements at least 5 days prior to the AGO. Moreover, in case all shareholders attend the meeting, the terms above may be waived, provided that the financial statements are published prior to the AGO.
The minutes of the AGO shall be registered with the Board of Commerce within 30 days as of the date of the meeting and, subsequently, published in the newspapers usually used by the company.
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 n°3/2019 (Ofício Circular CVM/SEP n°3/2019), published by CVM's Superintendence of Corporate Relations on February 28, 2019. The delay to disclose its financial statements is considered a serious breach by CVM and can subject the company to the payment of a daily fine.
Our team will be pleased to assist you with the corporate documents required for the approval of the 2018 accounts and to discuss alternatives on the publication of financial statements for the large limited liability companies.
Court deems as illegal the use of bank dada obtained through breach of secrecy without judicial authorization
The Federal Court of São Paulo prohibited the use of data collected through an illegal breach of bank secrecy during a police investigation regarding crimes of fraud against Brazilian Social Security.
According to Court, the police authority with agreement of Public Prosecutor's Office ("MPF") was requesting the validation of the data that was shared by Caixa Bank ("CEF") with the Authorities through an illegal breach of Bank Secrecy.
The Court criticized the actions of the public agencies and declined the request, as well as prohibited the use of the shared data. The Court also determined the opening of an investigation since CEF's employees could have committed a crime by sharing the data without legal authorization.
The president of the Supreme Federal Court postpones trial regarding the possibility of the Federal Revenue Office providing data under seal to the Public Prosecutor's Office without judicial authorization
The president of the Supreme Federal Court, Justice Dias Toffoli, postponed the discussion regarding the sharing banking and tax data collected by the Federal Revenue Office ("RF") with the Public Prosecutor's Office ("MPF"), without previous judicial authorization.
The trial was expected to be held on March 21st. The appeal filed by the MPF underpins that is not illegal for the RF to share information with the MPF for use in criminal investigations without previous judicial authorization.
The case gained national attention, since it is related to a recent scandal involving the RF leaking sensible data of the Supreme Court Justice Gilmar Mendes. Since this new case occurred, Justice Dias Toffoli stated that if it is deemed legal to share sensible data with the MPF without judicial authorization, then it will be very important to define clear limits to be observed by public agencies in this process.
The appeal is expected to be judged in following weeks.
Supreme Federal Court restate the jurisdiction of Electoral Justice to try ordinary crimes related to election offenses
The Plenary of the Supreme Federal Court restated precedents in the sense that the Electoral Justice has jurisdiction over ordinary crimes related to election offenses. The Supreme Federal Court also decided that the Electoral Court should analyze case-by-case whether the ordinary crimes are related to the election offenses. If not, the Electoral Court should send the cases to the competent court.
The decision was rendered in a criminal investigation regarding the former mayor of Rio de Janeiro Eduardo Paes and the federal deputy of Rio da Janeiro Pedro Paulo. At first, in a decision rendered by a single Justice, the Supreme Federal Court decided that the Federal Court of Rio de Janeiro was the competent authority to conduct investigations. The investigated politicians appealed, requesting the maintenance of the investigations in the Supreme Federal Court and, alternatively, the Court to decline jurisdiction to the Electoral Court of Rio de Janeiro.
Although this decision favored the written law that specifically states that the Electoral Court has jurisdiction over ordinary crimes related to election offences, it was highly controversial. Some of the Federal Prosecutors of the Car Wash Probe have stated that the aftermath of this decision may be detrimental to the Car Wash Probe, since the Electoral Courts could become overloaded with cases and not be as efficient as the Federal Courts.
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.