On November 25, 2022, the Brazilian National Department of Business Registration and Integration (DREI) sent to all State Business Registries the Official Notice SEI No. 4742/2022/ME, clarifying an old controversy on the proper interpretation of Article 3 of Law No. 11,638/2007, which was viewed by some State Boards of Trade as a requirement for the publication of financial statements by large limited liability companies, and frequently questioned by Brazilian entrepreneurs given the cost and disclosure involved.
According to such norm, the rules on bookkeeping, drafting of financial statements, and mandatory auditing by an independent auditor registered with the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários), set forth in the Law of Corporations (Law No. 6,404/1976), apply to limited liability companies (or group of companies under common control) with total assets higher than R$ 240,000,000.00 or annual gross income higher than R$ 300,000,000.00 in the previous fiscal year, which are also known as “large limited liability companies”.
Since 2007, there has been a discussion on whether that rule would also include the mandatory publication of financial statements of these companies in the Brazilian Official Gazette and major newspapers. This discussion was solved by DREI for whom such publication is discretionary.
Thus, according to the DREI decision, now on Brazilian State Business Registries must unify their understanding and may neither require evidence of such publication nor deny the registration of any documents of large limited liability companies based on the lack of such publication.
