Definition and Innovation of the Rules Applicable to Companies – Conversion of Provisional Measure n. 931/2020 into Law n. 14.030/2020

Abstract: As a result of this extraordinary moment in time of the COVID-19 pandemic, provisions of the original text to Provisional Measure n. 931/2020 were converted into Law n. 14.030/2020, along with other provisions innovated by the Federal Government.

Provisional Measure n. 931/2020 (“MP 931”) suggested changes to the procedure for calling company general meetings and meetings during the course of year 2020, an adaptation the result of the global impact of the COVID-19 pandemic.

Recognizing the relevance of the theme, the Federal Government submitted MP 931 for voting towards its conversion into law, which after analysis and modifications by the National Congress culminated in the approval of Law n. 14.030/2020 (“Law 14.030”), published on July 29, 2020.

With respect to the innovations to the original text of MP 931, we cite the following from Law 14.030:

• Determination that the matters the competence of the general meeting that had been already been deliberated by the board of directors on an urgent basis shall be a topic of deliberation in the first subsequent general meeting;

• Extension of the time period for the holding of ordinary general meetings to 9 (nine) months, specifically for cooperative companies and respective representative entities;

• Suspension until December 31, 2020 of the holding of in-person meetings and general meetings of associations, foundations and other companies that are not corporations, limited liability companies or representative or cooperative companies; and

• Express inclusion of the possibility that cooperative companies can hold their general meetings entirely digitally, so long as the legal rules regarding the participation and manifestation of associates, as well as other applicable requirements, are respected, in accordance with Department of Business Registration and Integration – DREI Normative Instruction n. 79/2020.

Additionally, Law 14.030 confirmed the other alterations suggested by MP 931, which rules became definitive following the publication of the Law, among which alterations we note:

• Authorization for the holding of ordinary general meetings and partner meetings in corporations and limited liability companies within up to 7 (seven) months from the end of the company`s fiscal year;

• The competence of the Board of Directors or Management to resolve urgent matters that would normally be decided in the general meetings of the company, including to declare dividends should the articles of association of the company not state otherwise;

• The extension of mandates expiring in year 2020 until the date of the holding of the ordinary general meeting or the holding of the meeting of the Board of Directors, as may be the case;

• The faculty of the Securities and Exchange Commission of Brazil – CVM to extend the deadlines established in Law n. 6.404/76 (“the Corporations Law”) relative to public companies, as was defined in CVM Deliberation n. 849;

• The maintenance of the suspension for 30 (thirty) days of the requirement for pre-filing relative to the issuance of securities, company acts and other legal transactions subject to filing and signed as of February 16, 2020, counting as of the date the activities of the respective competent commercial registry are reestablished.

The measures implemented by the Federal Government, including the innovations incorporated into the text of Law 14.030, motivated by the adversities brought by the COVID-19 pandemic, seek to make the procedure to be followed by companies more flexible and simplified.

• Almeida Advogados has teams specialized in Corporate and Company Law updated daily as to the measures as are being announced and are available to answer any questions relative to the content of this article.

Written by:
Ana Carolina Rovida
Caroline Pelumbo