Through Provisional Act (MP) Number 931, the President of Brazil has relaxed the deadline established by Corporations Act 6.404/1976, that required corporations to hold Annual General Meeting until the last day of April. By this act
“Art. 1 The corporation whose fiscal year ends between December 31, 2019 and March 31, 2020 may, exceptionally, hold the annual general meeting referred to in art. 132 of Law No. 6,404, of December 15, 1976, within seven months, counting from the end of its fiscal year.”
This MP must be appreciated by Congress within 120 days counting of its publication, but, for all practical purposes, has opened to possibility that the AGMs deadline at actually postponed to June 30th (if Act is rejected within 60 days) or July 30th (as is the case with virtually all corporations in Brazil).
The Act 931 also establishes that
“§ 2 The statutory mandate and activities of corporations` administrators, members of the fiscal board and statutory committees are extended until the ordinary [annual] general meeting is held under the terms of the caput, or until the board of directors meeting occurs, as the case may be.”1
That will avoid a lack of proper (legal) mandate for statutory directors and board members.
The measure is applicable to private and public companies, state or privately held, large Limited Liability Corporations and Cooperative companies.
Other very important dispositions of the MP are:
- Postponement of Acts – Until the Boards of Trade are under lockdown, all corporate acts (changes in by-laws or statutes, and others) expiring in the period are automatically postponed until the Board of Trade is reopened and able to appreciate the acts filed (from the inception of the COVID-19 period, February 16th 2020 onwards)
- Remote Vote – partner and shareholders of corporations will be able to vote in AGMs remotely.
The above measurements seem to be in line and also a logical consequence of the new reality imposed to all of us by the COVID-19.