Sanctioned Act 14.451, which reduces the quorum for resolutions in limited liability companies

On September 22, 2022, Act no. 14.451 dated 2022 was published. This amends the quorum for resolution of partners in limited liability companies and, therefore, also amends articles 1.061 and 1.076 of the Brazilian Civil Code of 2022. The rule will become effective 30 days after its publication.

The purpose of the new Act is to reduce red tape in decision-making in limited liability companies, the most common corporate structure among family businesses in Brazil. The new legal provision reduces the quorum for decisions on the appointment of non-partner managers, dismissal of a managing partner, modification of the articles of incorporation, merger and consolidation and dissolution of a company, in addition to termination of the liquidation status.

For the appointment of non-partner managers, the new approval quorum becomes 2/3 of the partners before paying  the capital, and approving holders of more than half of the capital stock after the payment. The previous rule required unanimous approval in the case of unpaid capital and 2/3 after payment.

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On the other hand, the dismissal of the managing partner shall have a quorum of at least more than half of the share capital, unless there is a different provision provided for herein. The previous rule required the approval of at least 2/3 of the capital stock.

In relation to the amendment of the articles of incorporation, merger, consolidation, dissolution and termination of the liquidation status, the quorum previously provided was 75% of the capital stock. With Act no. 14.451, the quorum will be reduced to a simple majority of the capital stock. With this change, the quorum for amending the articles of association of the limited liability company is equivalent to the quorum provided for corporations.

Written by Clara Couto, Associate at Drummond Advisors

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