The Ultimate Guide to Annual General Meetings in Brazil You Need to Know

Annual General Meetings (AGMs) are an essential element of corporate governance in Brazil, ensuring transparency and accountability among shareholders and management. Governed primarily by the Brazilian Civil Code and related legislation, AGMs are subject to strict timelines, documentation, and procedural rules. This guide provides an overview of key requirements and best practices for AGMs in Brazil.

Legal Timeline for AGMs in Brazil

Under Article 1.078 of the Brazilian Civil Code, AGMs must take place within four months of the fiscal year’s end. For companies with a fiscal year concluding on December 31, the AGM must be held by the last working day of April. While postponements are not legally permitted, AGMs conducted after this deadline typically lead to indirect consequences, such as restricted participation in public bids or challenges in obtaining credit.

Consequences of Delayed AGMs

Entity-Related Impacts:

• Companies may face restrictions on registering corporate acts with the trade board until AGM documentation is submitted.
• Non-compliance with AGM deadlines can affect the company’s ability to participate in public bids or secure financing.

Director-Related Impacts:

• Directors may remain personally liable for decisions made during their tenure if AGMs are delayed.
• Without timely AGMs, directors face risks of legal challenges and administrative hurdles.

Procedural Requirements for AGMs in Brazil

Article 1.078, §1º mandates that key documents—including the balance sheet, financial statements, and meeting agenda—must be sent to shareholders 30 days prior to the meeting. Proof of receipt is required unless:

• All shareholders are present or
• Written acknowledgment of meeting details is provided.

Meeting Format and Resolutions

Meetings can be held:

• Physically, as required for companies with over ten shareholders (Article 1.072, §1º).
• Virtually, following Provisional Measure No. 931/2020, which allows for remote or semi-presential AGMs.
  Resolutions can also be passed through written consent when shareholders unanimously agree, negating the need for a physical meeting (Article 1.072, §3º).

Financial Statements and Auditing Obligations in Brazil

Financial statements must be:

1. Published in a local commercial newspaper at least five days before the AGM.
2. Filed with the trade board (e.g., JUCESP) within 30 days of approval, along with proof of publication or SPED documentation.
   Failure to meet these deadlines can result in fines or delays in processing corporate acts.

Audit Requirements

Companies meeting thresholds of R$240 million in assets or R$300 million in gross revenue must have their accounts audited, as per Law n.º 11.638/2007. However, audit reports are not legally required for publication.

Shareholder Representation in Brazil

Foreign shareholders must appoint a resident attorney-in-fact in Brazil to represent their interests at AGMs. The power of attorney (POA) must be:

• Notarized, apostilled, and translated if issued abroad.
• Filed with the trade board before representation at the AGM.

Recommendations for Smooth AGM Management

1. Prepare documents early: Ensure management reports and financial statements are ready 30 days before the AGM.
2. Comply with publication requirements: Publish financial data in a commercial newspaper or electronically via SPED.
3. File documentation on time: Submit AGM records and financial statements within the 30-day deadline post-AGM.
4. Verify representation: Confirm valid POAs for all foreign shareholders in advance.

Want to simplify AGM management in Brazil?

Adhering to Brazil’s AGM regulations ensures compliance, transparency, and corporate stability. Delays or omissions can lead to significant operational and reputational risks.

For businesses navigating Brazil’s legal landscape, Klea offers comprehensive support, from document preparation to publication and filing assistance. For further insights into corporate governance practices, explore our resources on international compliance, or book a demo to see how Klea can simplify your AGM process.