Changes in the Publication Requirements Applicable to Privatelyheld Corporations

In view of the changes made by the Government Act (Medida Provisória) 892, of August 5, 2019 in the Brazilian Corporations Act (Law 6,404/76) providing that an act by the Ministry of the Economy would set forth rules for the publication and disclosure of corporate acts of privately-held corporations, to replace the requirement of publication in a newspaper of wide circulation and in the official gazette, the Ministry of Economy published on September 30, 2019 Rule 529 in the Federal Official Gazette.

According to the Rule, in addition to disclosing their acts in their own websites, the privately-held corporations will be able publish their corporate acts without cost at the Central Balance-Sheet Database of the Public Digital Bookkeeping System (SPED).

For the publication of financial statements, there will be a Central Database for Financial Statements, expected to be fully operational on October 14, 2019, with digital certification under the standards of ICP-Brasil, which will allow to prove the authenticity, the inalterability and the date of publication of all corporate acts required by the Brazilian Corporations Act.

In the same sense, on October 3, 2019, the National Department of Corporate Registration and Integration (DREI) published Rule 67, aiming to adapt the Corporation Registration Guidebook not only to the provisions of the Rule of the Ministry of the Economy, focused on privately-held corporations, but also to the rule recently approved by the Brazilian Securities and Exchange Commission (CVM), applicable to publicly-held corporations.

The purpose of the changes made is to reduce the costs to the privately-held corporations, therefore creating an environment more favorable to entrepreneurship in Brazil and facilitating the access of such companies to the capital market.

However, if the National Congress does not convert the Government Act 892 into law within the applicable deadline, the previous wording of the Brazilian Corporations Act will be reinstated, requiring again the publication in a newspaper of wide circulation and in the official gazette.

The Corporate and Mergers & Acquisitions team remains available to provide any additional information deemed necessary.

This material is for informational purposes only and shall not be used in isolation for decision making. Specific legal advice may be provided by one of our attorneys.