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COVID-19 | Corporate - DREI regulates partially and fully virtual meetings

April 16, 2020

COVID-19 | Corporate - DREI regulates partially and fully virtual meetings

Corporate - updated on Apr 15 at 03:02 pm

DREI regulates partially and fully virtual meetings for Brazilian closely held corporations, limited liability companies, and cooperatives​

On April 14, the National Department for Registry of Commerce and Integration (DREI) issued the Normative Instruction (NI) No. 79, which regulates the Provisional Measure (PM) No. 931, enacted by the Federal Government on March 30. PM No. 931 aimed at easing a number of the requirements applicable to closely held corporations, limited liability companies, and cooperatives. Among the legal changes set forth by PM No. 931 is the possibility of conducting shareholders, quotaholders and associates’ meetings, in part or fully through electronic means, similarly to the rules applicable to in-person meetings.

NI No. 79 regulated the changes brought by PM No. 931, in respect to conducting corporate meetings, as follows:

  1. Closely held corporations, limited liability companies, and cooperatives may conduct their meetings either: (i) in part electronically, where the participation and voting may take place either in person or remotely; or (ii) fully in electronic mean, where there is no physical place for the meeting to take place. The participation and voting may occur either by means of Proxy Voting mechanisms (Proxy) sent to the company or by remote participation by means of an electronic system;
     
  2. Partial or full electronic meetings must abide by all other legal provisions applicable to relevant corporate type and the provisions of the entity’s respective corporate documents;
     
  3. Documents and information previously sent to participants of the meeting must also be available through a secure electronic mean;
     
  4. The call notice for the meeting must clearly inform if it will be partially or fully virtual, containing details on how the meeting will occur and how the shareholder, quotaholder or associate may participate and cast their vote remotely (more details may be provided through a specific Internet link). The notice must also list the necessary documents, which may be registered electronically, so that the participant may be admitted in such corporate event. Participants must present these documents up to thirty minutes before the meeting begins;
     
  5. The company may not be held liable for any technical problem occurred during the meeting or for any other situation out of its control, but it must adopt an accessible system and technology to enable the attendees to remotely participate and cast their votes, as the case may be. The company may use third party technical services for the corporate event, but is required to comply with all rules set forth by NI No. 79;
     
  6. The company must keep all documents related to the meeting duly filed at its headquarters, including its full recording for a 3-year term, which is the statute of limitations applicable for seeking annulment of decisions taken at such meetings;
     
  7. The corporate books, in this case, may be solely executed by the president and secretary of the meeting, who will certify attendance by all participants in these books;
     
  8. There is no mandatory specific IT tool for use in these meetings. However, the company must seek that the IT tool to be adopted for the meeting allows a secure, reliable and transparent meeting;
     
  9. If a Proxy system is utilized, it must contain at least all issues to be discussed during the meeting (in a clear and direct manner, indicating the author of the respective proposal and being able to refer to more details through a specific Internet link); and
     
  10. The minutes must expressly state that the meeting was either partially or fully virtual, informing how the participation and voting occurred. President and secretary of the meeting must sign the minutes and attach a list of participants. Non-physical minutes must be signed electronically by the president and secretary of the meeting, and the minutes may be printed and on a legible form at any time, stating that all rules set forth in NI No. 79 were fully observed.

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