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Deadline for the Annual General Meeting of Business Corporations ends on July 31

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Under the terms of art. 1,078 of the Brazilian Civil Code and art. 132 of Law n. 6,404, popularly known as the “Business Corporations Law”, it is mandatory for corporations to hold an Annual General Meeting (AGM).

Regularly, the meeting must take place in the first four months after the end of the fiscal year. Exceptionally in this year, the Provisional Measure nº 931 extended this period to seven months, with final date on July 31, 2020.

The goal is to gather shareholders for the management accountability, deliberation on the financial statements, election or reelection of the administrators and decisions regarding the allocation of net income or loss for the year.

The administrators must communicate, within one month before the date set for the AGM, through the publication of announcements, a list of documents to be accessed by their shareholders, as provided for in art. 133 of Law n. 6,404, such as:

I. management report on social affairs;

II. a copy of the financial statements;

III. the opinion of the independent auditors (if applicable);

IV. the opinion of the fiscal council (if applicable), as well as other pertinent documents.

The first call for the AGM must be promoted 15 days before the date it is scheduled to happen and it must comply with legal requirements for terms and content, under penalty of annulment of the meeting. In addition, the invitation must be made in a notice published in 3 issues in the Federal Official Gazette or in state newspapers.

The timely completion of the meeting is crucial. For closed companies, late AGM may result in managers being held liable if it causes damage to the Company’s assets or directly damages third parties (art. 159 caput and §7 of Law n. 6,404).