April 2022

_the april│2022 edition of our Newsletter has the following highlight:

– Improvement to the Remote Voting Forms for the season of Shareholders’ Meetings

– CVM publishes six new Resolutions and includes mandatory disclosure of notice of corporate demands

_Improvement to the Remote Voting Forms for the season of Shareholders’ Meetings


B3 introduced improvements to the voting forms, in particular to facilitate the election of the board of directors through the multiple voting procedure, allowing shareholders to distribute their votes proportionally in a different (even smaller) group of candidates than the one nominated in the simple election, which until the beginning of this year was not possible.


This amendment was designed to increase shareholders’ voting options in distance voting, in addition to simplifying and providing more security to voting, considering the possibility of mistakes in reading the votes manually imputed by shareholders in the system, especially if we consider that in most cases, shareholders choose to divide their votes equally among some candidates.


In addition, the improvements also include: (i) the possibility of including in the remote voting form a resolution with fixed text specific for the election of the president and vice-president of the company’s board of directors, which promotes a good practice of corporate governance, and (ii) the availability of an English version of the system’s standardized questions, an important measure to reduce potential problems of interpretation by foreign shareholders.


We contributed on the subject in the article “B3 improves voting instruments for shareholders’ meetings” published in the legislation and market section of “Capital Aberto”, on April 06, 2022, which can be accessed through the link below:



_The Role of Corporate Governance in the ESG Agenda


Over the past few years, it is possible to observe a significant increase in discussions involving ESG topics in the management of companies around the world. Although social and environmental aspects are gaining increasing prominence, the most advanced pillar in Brazil today is corporate governance.

Since the creation of the Novo Mercado segment of the B3 stock exchange in 2000, the Brazilian market has been establishing a high standard of governance, with the adhesion of specific practices and obligations aiming at increasing transparency in the disclosure of information for the decision-making process of shareholders and investors.

In this context, unsurprisingly, the result of a recent survey by AMBIMA (Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais – which stands for the Brazilian Association of Financial and Capital Market Entities)[1] with 209 asset managers, released earlier this year, indicated that governance is the ESG aspect most observed by asset managers, with ethics and transparency being the factors most mentioned by them (92%).

Among the governance priorities, labor policies and relations (79%), data privacy and security (77%), board independence (75%), and board compensation (54%) were also mentioned.

The survey’s conclusion is encouraging, since pillar G is the core of ESG. Without good corporate governance, it is impossible to effectively implement social and environmental actions and align the company’s objectives with the creation of long-term value not only for its shareholders, but also for society in general.

Under the scope of governance, the rules and procedures to be observed in the decision making of companies are defined, from the elaboration of policies to the determination of rights and responsibilities among its different participants, including the board of directors, officers, shareholders, stakeholders, and the market in general. Thus, the increase in corporate governance standards is directly related to an increase in the transparency with which companies relate and communicate with the market and their shareholders, managers, employees, and partners in general.

It is no coincidence that over the past few years, companies with good corporate governance practices have outperformed the general market indexes in both the US and Brazil.

In this line, an S&P Global survey (2020)[2] on governance factors showed that companies rated below average in relation to good governance are more susceptible to mismanagement. Therefore, failures in governance policies may expose companies to unacceptable levels of risk, significantly compromising their business

Given the evolution of the Brazilian market on the subject, the simple disclosure of information on integrity, policies and codes of ethics and conduct is not enough. It is essential that companies realize the value that the effective adoption of good corporate governance practices generates in their relationships, in the management of their business, and in their perception before the market and the community in which they operate.

The text above was published Portuguese in the Legislação & Mercado section of Capital Aberto on February 22, 2022, and can be accessed through the link below:




_CVM publishes six new Resolutions and includes mandatory disclosure of notice of corporate demands


On March 29th, 2022, the Brazilian Securities and Exchange Commission (“CVM“) published six new Resolutions, effective on May 2nd, 2022. The new rules introduce a new notice on corporates to be disclosed by publicly-held companies, in addition to contemplating revisions related to the Decree No. 10,139/2019, which provides for the consolidation of the interior normative acts to Decree issued by bodies and entities of the direct, autarchic and foundational federal public administration, which do not necessarily imply effective changes of merit, which are verified only in the Resolutions No. 79, 80 and 82.


Regarding the regulatory novelties, we highlight the new notice of corporate demands provided for in CVM Resolution No. 80/2022, which consolidated the rules regarding the registration and disclosure of periodic and occasional information by publicly-held companies. This announcement, which received public comments through Public Hearing 1/21, will make it mandatory to disclose certain judicial and arbitration claims based, in whole or in part, on corporate or securities legislation, or on the rules issued by CVM as of May 2, 2022.


From then on, it will be necessary to disclose the following information about the corporate claims in which the company, its shareholders or its managers are parties, in this capacity, and (i) that involve homogeneous diffuse, collective or individual rights or interests; or (ii) in which a decision can be rendered whose effects affect the legal sphere of the company or of other holders of securities issued by the issuer that are not parties to the process, such as action for annulment of corporate resolution, action for the administrator liability and action for the controlling shareholder liability:


  • notice regarding its initiation, within 7 (seven) business days from, according to the capacity of the party as plaintiff or defendant, the date of filing of the action or summons or, in case of arbitration, of the presentation of the request for its initiation or receipt, indicating: a) parties to the process; b) values, assets or rights involved; c) main facts; and d) request or provision claimed;


  • in the case of legal proceedings, decisions on requests for injunctive and evidence relief, decisions on jurisdiction and competence, decisions on the inclusion or exclusion of parties and judgments on the merits or termination of the proceedings without judgment on the merits, in any instance, in the period of 7 (seven) business days from its knowledge by the party;


  • in the case of arbitration, submission of a response, execution of an arbitration term or equivalent document that represents stabilization of the demand, decisions on precautionary or urgent measures, decisions on the arbitrators’ jurisdiction, decisions on the inclusion or exclusion of parties and arbitral awards, partial or final, within 7 (seven) business days from its knowledge by the party;


  • any agreement entered into in the course of the claim, within 7 (seven) business days of the presentation of its execution, indicating amounts, parts and other aspects that may be of interest to the collective of shareholders.


We emphasize that companies may not use the confidentially clause provided for in the regulations of arbitration chambers in order to fail to comply with the disclosure of the notice. Therefore, CVM was categorical, in the notice of Public Hearing 1/21, in stating that chambers regulations cannot contravene legal and regulatory provisions, since the disclosure obligations set forth in CVM Resolution No. 80/2022 reflect central concerns of the capital market rules and cannot be excluded by arbitration agreements, arbitration chamber regulations or by any other agreement.


More information regarding the new CVM Resolutions can be found in the link below:


April 2021

_the april│2021 edition of our Newsletter has the following highlights:

– General aspects regarding the election of the Board of Directors

– Brazilian Securities and Exchange Commission convicts the chairman of the board of directors for voting in a conflict-of-interest situation

_ General aspects regarding the election of the Board of Directors


The Board of Directors is a collegiate body, mandatory for publicly-held companies, authorized capital companies and mixed-capital companies, and optional for other companies, in accordance with article 138 et seq. of Law No. 6,404 of 1976 (“Brazilian Corporation Law”). It must be composed of, at least, 3 members, elected and dismissible, at any time, by the shareholders’ meeting. In this sense, there are 3 types of election that can be adopted, which are: (i) majority voting; (ii) multiple voting; and (iii) separate voting.


The Brazilian Corporation Law does not specifically regulate how the majority voting system should occur. The legal doctrine understands that there are two ways to organize it: “by groups” or “by candidate”. In the first form, shareholders vote for a group of candidates corresponding to the number of positions to be filled. In the second form, the shareholders vote directly on the candidates, and, in the end, the candidates with the most votes are elected.


Alternatively to the majority voting system, the Brazilian Corporation Law, in its article 141, stablishes the possibility of the multiple voting procedure. In this case, shareholders representing at least 10% (ten percent) of the voting capital stock (or, in case of publicly-held corporations, according to the percentages provided in CVM Normative Instruction No. 165/1991), may, up to 48 hours before the shareholders’ meeting, request the adoption of the multiple voting procedure, which attributes to each share as many votes as there are positions to be occupied.


The multiple voting procedure should not be confused with majority voting “by candidate” system. In the majority voting “by candidate” procedure, each share has one vote per position to be occupied, and the most voted candidates are elected. On the other hand, in the multiple voting procedure, each shareholder has the right to cumulate its votes in a single candidate or to distribute them among several.


It is important to highlight that, whenever the multiple voting procedure is adopted, the dismissal of any elected member will result in the dismissal of all the other members, which will require a new election. In any other situations of vacancy, in the absence of an alternate, the first shareholders’ meeting that takes place must deliberate on the new election of the entire board of directors.


Furthermore, the Brazilian Corporation Law provides, in the abovementioned article 141, in its 4th paragraph, exclusively for publicly-held corporations, the possibility of the separate voting procedure. This form is guaranteed exclusively to minority shareholders that prove the ownership uninterrupted of shares, during the 3 months preceding the shareholders’ meeting, and may be required by shareholders representing a minimum quorum of 15% of the total voting shares or 10% of the capital stock, when considering preferred shares without voting rights or with restricted voting rights, nevertheless CVM’s understanding is that the percentage of 10% also applies to companies that have only issued voting shares. For this purpose, it is possible to consider the shares of a single shareholder or the shares of shareholders acting together.


Finally, whenever the election of the board of directors is cumulatively performed by the multiple voting procedure and the holders of common or preferred shares exercise the right to elect a member separately, the controlling shareholder shall be ensured to the right to elect members of the board of directors in a number equal to the number of those elected by the other shareholders, plus one, regardless of the number of members established in the bylaws.



_Brazilian Securities and Exchange Commission convicts the chairman of the board of directors for voting in a conflict-of-interest situation


The Administrative Proceeding CVM SEI 19957.010833/2018-45 was filed by the Superintendence of Relations with Companies (“SEP“), in order to determine the liability of the controlling shareholder of a publicly held company, who was also the chairman of the board of directors, for voting and approving the execution of the dissolution of an agreement with another company in which the defendant was also a shareholder, due to an alleged conflict of interest situation with the company, in violation to articles 156 of the Brazilian Corporation Law.


The accusation originated from a complaint of a shareholder reporting abuses in the approval of said termination by the company’s management.


According to article 156 of the Brazilian Corporation Law, managers are prohibited from intervening in any transaction in which they have a conflicting interest with the company, as well as in the deliberation that the other managers take regarding such matter, provided that said manager informs the other of his/her impediment and includes in meeting’s minutes the nature and extent of their interest. However, there is disagreement as to the nature of the aforementioned conflict of interest, whether formal (i.e. the impediment must be verified a priori) or material (i.e. the impediment must be verified a posteriori).


In the analysis of the case, the reporting director Flavia Perlingeiro, understood that the defendant was prevented from voting at the board of directors’ meeting, regardless of the examination of the transactions’ matter, reinforcing the position historically adopted by CVM, that the nature of the conflict of interests is of formal, although she stressed that such impediment may vary according to the specifics of the case, this means there can be exceptions.


In his defense, the defendant stated that the decision taken at the board of directors meeting was unanimous and that it would have been approved even without his vote, declaring, as well, that there was no damage to the company or the market. The reporting director refuted such arguments since the approval of the matter by the other directors does not rule out the illegality of the defendant’s conduct of voting in a situation of conflict of interest, since it does not depend on the result of the deliberation, affirming also that the characterization of the violation of article 156 of the Brazilian Corporation Law does not depend on losses or damages.


Director Alexandre Costa Rangel presented a vote in disagreement with the reporting director’s vote as to the nature of the conflict of interest in question, according to his understanding the matter in question constitutes a material conflict. Due to this premise, it would be essential to demonstrate the personal interest and counterpoint of the manager regarding the transaction, in addition to the effective approval at the expense of the company’s interests.


Finally, with the vote of the director Alexandre Costa Rangel defeated, CVM’s board decided, by majority, to convict the defendant to the payment of a fine of R$ 150,000.00.


More information regarding the Administrative Proceeding CVM SEI 19957.010833/2018-45 can be accessed in Portuguese through the link below:




April 2020

_the April│2020 edition of our Newsletter has the following highlights:

– Publication of Normative Instruction DREI Nr. 76, dated March 9, 2020, regarding procedures to be adopted by Boards of Trade for preventing money laundering and terrorism financing

– Publication of Provisional Measure Nr. 931/20 and Brazilian Securities and Exchange Commission Resolution Nr. 849/20

– MAC clauses (material adverse effect) in M&A agreements and the coronavirus crisis

– Legal possibilities for deferral and retention of dividends

– Breach of contract and force majeure in pandemic times

_ Publication of Normative Instruction DREI Nr. 76, dated March 9, 2020, regarding procedures to be adopted by Boards of Trade for preventing money laundering and terrorism financing

On March 9th, 2020, the Brazilian National Department of Business Registration and Integration (DREI) issued Normative Instruction Nr. 76 (“IN DREI 76”), which provides the policies, procedures and controls to be adopted by Boards of Trade to comply with the provisions of Law Nr. 9,613/98, regarding the prevention of money laundering and terrorism financing activities and Law Nr. 13,810/19, regarding the compliance with United Nations Security Council determinations regarding unavailability of assets.

IN DREI 76, which comes into force on July 1st, 2020, provides that each Board of Trade must establish and implement their own procedures and controls to prevent money laundering and terrorism financing. Article 2 of said normative instruction sets forth the following minimum procedures that must be adopted by each Board of Trade:

(i) to identify the customers and others involved in the filings presented before the Board of Trade, including the ultimate beneficial owner;

(ii) to identify situations that should be notified to the Financial Activities Control Council (COAF), pursuant to article 11 of Law Nr. 9,613/1998;

(iii) to identify politically exposed persons (PEP), under the terms defined by COAF;

(iv) to identify the existence of determinations issued by the United Nations Security Council regarding the unavailability of assets owned by individuals and/or legal entities which are subject to the sanctions referred to in Law Nr. 13,810, 2019 and

(v) to periodically verify the effectiveness of the procedures and internal controls adopted (by the Boards of Trade).”

Article 3 of IN DREI 76 lists certain situations that should be specially monitored, selected and analyzed by the Boards of Trade and, if considered suspicious, reported by them to COAF. 

Among the situations listed as suspicious, the following stand out (i) incorporation of more than 1 legal entity, in less than 6 months, by the same individual or legal entity or which has the same manager or attorney-in-fact ; (ii) registration of a legal entity, whose quotaholders, shareholders, attorneys-in-fact or managers are domiciled in locations characterized as a tax heaven; (iii) registration of a company in which a minor, a person deemed incapable or a person over 80 years of age is a quotaholder or shareholder; (iv) registration of a legal entity with a capital stock that is flagrantly incongruous or incompatible with its corporate purpose; (v) registration of different legal entities incorporated at the same address, without an economic justification; (vi) frequent changes in the company’s corporate structure or purpose without apparent justification.

The Boards of Trade have not yet commented on the procedures that will be adopted by them to comply with the provisions of IN DREI 76.

IN DREI 76 can be accessed in Portuguese at:


_Publication of Provisional Measure Nr. 931/20 and Brazilian Securities and Exchange Commission Resolution Nr. 849/20

Considering COVID-19 pandemic and its impact on economic activity, more specifically in the fulfillment of obligations by limited liability companies and corporations, Brazilian Federal Government enacted Provisional Measure Nr. 931/2020 (“MP 931”) and, following such legal document, the Brazilian Securities and Exchange Commission (“CVM”) published CVM Resolution Nr. 849/2020 (“Resolution 849”), which extends several deadlines for periodic obligations related to publicly-held corporations. We highlight below the main provisions:

  • Ordinary Shareholders’ Meeting: the term to hold these meetings was extended for an additional term of 3 months, i.e. they must be held within 7 months from the end of the fiscal year.
  • Term of Office of Members of Management: extended until the Ordinary Shareholders’ Meeting or until the Board of Directors’ meeting that follows the Ordinary Shareholders’ Meeting, as the case may be.
  • Digital Shareholders’ Meeting: CVM may authorize publicly-held corporations to hold digital meetings. With this regard, CVM has already issued a public consultation regarding a new regulation on this matter (“CVM Public Consultation”). DREI, which regulates limited liability companies and privately-held corporations, has just issued Normative Instruction 79 (“DREI IN 79”), which regulates digital meeting and the digital voting process applicable to these entities.
  • Dividends: The Company’s Board of Directors or, in its absence, the Board of Officers may declare dividends, until the Ordinary’s Shareholders Meeting is held, regardless of the provisions sets forth in the company’s By-Laws.
  • Filing of corporate acts before the Boards of Trade: the deadline for filing corporate acts executed as of February 16th, 2020 shall be counted from the date when the respective Board of Trade reestablishes its services.

Specifically for publicly-held corporations, the deadline for the disclosure of their Financial Statements, the annual update of their Reference Form (Formulário de Referência), the annual update of their Registration Form (Formulário Cadastral) and of their Corporate Governance Report (Informe de Governança Corporativa) was extended for an additional period of 2 months. Moreover, the deadline for the disclosure of their quarterly information form – ITR for the 1st  quarter of 2020 was postponed in 45 days, pursuant to CVM Instruction Nr. 480/09.

MP 931, Deliberation 849, CVM Public Consultation and DREI IN 79 can be accessed through the links below, respectively:





_ MAC clauses (material adverse effect) in M&A agreements and the coronavirus crisis

Material adverse effect clauses, known as MAC clauses, are usually used in merger and acquisition agreements as a preventive tool to achieve the results desired by the parties. Such clause must specify any events that may cause a material adverse effect on the activities, financial or operational situation of the target company between the signing of the agreements and the closing of the transaction which, in case they occur, may generate relevant losses to the potential investor, as well as must specify the metrics negotiated by the parties to deal with this risk, which may even include the non-closing of the transaction.

Due to COVID-19, many investors who were in the middle of negotiations, specially between signing and closing of the transaction, have questioned the possibility of MAC clauses provided in the agreement encompass the effects caused by the pandemic, which, depending on the negotiated terms, could allow the investor to withdraw from the transaction.

In cases where the MAC clause is not provided in the sale and purchase agreement, parties can evaluate the applicability of article 478 of the Brazilian Civil Code, which allows the a party to terminate an agreement if the obligations of one of the parties become excessively costly, with extreme advantage to the other, due to extraordinary and unpredictable events.

Moreover, in times of uncertainty, such as the one we are experiencing now, it is important to also review the provisions of the Brazilian Civil Code on general agreement provisions, which sets forth that the following principles shall prevail in the interpretation of contractual provisions: minimum intervention and exceptional agreement amendment, as well as the principle of the parties autonomy to execute agreements. 

Due to COVID-19, many companies are uncertain on how to proceed with the distribution and payment of dividends. In a situation of global quarantine and forecasts of recession at worrying levels, controlling shareholders and members of management question how to proceed to avoid the breach of the obligation to distribute dividends and, at the same time, to maintain the company’s financial health. In these cases, there are three legal possibilities to be considered: the retention of mandatory dividends, the postponement of the payment of dividends and the retention of profits.

The possibility of retaining mandatory dividends is provided for in art. 202, §4 of the Brazilian Corporate Law, which constitutes a legal exception for cases in which the management bodies inform the Ordinary Shareholders’ Meeting  that such distribution is incompatible with the corporation’s financial situation. The Audit Committee (Conselho Fiscal), if in operation, must issue an opinion on this information and, for publicly-held corporations, its managers will forward to CVM, within 5 days of the shareholders’ meeting, a justified explanation on the information given to the shareholders. In this case, profits that are not distributed should be recorded as a special profit reserve and, if not absorbed by losses in subsequent years, should be paid as dividends as soon as the company’s financial situation allows.

In view of the difficulty in demonstrating such incompatibility due to an uncertain future economic crisis, there are companies evaluating the possibility of postponing the payment of dividends. Under the Brazilian Corporate Law, the legal term for dividend payment is 60 days from the date in which they are approved, unless otherwise decided by the shareholders’ meeting, provided that, in any case, they are paid within the fiscal year they were approved. Thus, it would be possible to propose to the shareholders the approval of the dividends and the postponement of its payment until the end of 2020 fiscal year, in order to give management time to analyze the concrete effects of COVID-19 on the company.

It is worth mentioning that the decision to postpone payment of dividends is more complex if they have already been approved, since, in theory, such dividends would be an unquestionable and due debt of the company before its shareholders. However, there are precedents by CVM and São Paulo State Supreme Court on the possibility of deferring the payment of dividends already approved due to a supervening fact, i.e., in case the company’s economic situation has changed in a way that paying the dividends already approved would compromise the company’s operations, or even in the event of reversal of future expectations, for the purpose of preserving its social interest (according to CVM Sanctioning Administrative Procedure No. RJ2008/8046, judged on October 30th, 2018 and Civil Appeal No. 1002982-64.2017.8.26.0554).

Finally, there is also the possibility of retaining profits, other than the mandatory dividend, pursuant to art. 196 of Brazilian Corporate Law, which regulates the retention of profits based on a capital budget approved by the shareholders. The budget to be submitted for approval by the shareholder’ meeting shall justify the proposed profit retention and shall indicate all sources of funds and capital investments, whether fixed or current. 

In all cases, it is note-worthy that CVM is aware of the impacts that COVID-19 may have on corporations, having already approved changes in regulatory deadlines and given guidelines on the treatment and disclosure of the effects of the pandemic on financial statements, as mentioned above. In this sense, CVM has recommended in its Circular Letter SNC/SEP 02/2020 that the companies should evaluate, in each case, guidances and estimates related to the risks of COVID-19 in the preparation of their Reference Form (Formulário de Referência) and the need to disclose relevant facts (Fatos Relevantes) to the market, in order to provide information that reflects the economic reality of the company.

More information about Circular Letter SNC/SEP 02/2020 and the aforementioned precedents can be accessed through the links below:




_Breach of contract and force majeure in pandemic times

In a scenario of uncertain global economy, with worldwide quarantines, the possibility of contractual breach concerns both creditors and debtors. Much is discussed about the possibility of not complying with contractual requirements under COVID-19 and, moreover, if there is a legal justification for doing so. Thus, many questions about the new coronavirus’ impact on contracts arise, whether it can be considered a reason of force majeure for contractual purposes and, if so, what would be its effects.

First, it is worth remembering that the concept of force majeure is provided for in art. 393 of the Brazilian Civil Code and considered a cause for debtor’s liability exclusion, resulting in an exemption for indemnification obligation on the part of the debtor and the removal of the incidence of fines related to contractual default. There are three fundamental aspects of force majeure characterization: (i) unpredictability, (ii) being out of control of the parties, and (iii) making contractual compliance impossible in the contracted time, place and form.

Once the above requirements are fulfilled, it will be necessary to verify if there is no contractual provision modulating the hypotheses of force majeure and its contractual consequences. In addition, it should be analyzed whether the risk of non-compliance is linked to the nature of the contract itself and if the contract can be fulfilled in another way, outlining or mitigating the risks involved. An example of this situation would be entities that provide educational services that, in view of the prohibition to hold presential classes, opt to hold online classes to continue providing educational services to its students.

The burden is on the debtor to prove that the global effects of COVID-19 have become an insuperable difficulty to comply with the contract, even if in a mitigated way. Therefore, it is advisable that the debtor formally notifies the creditor regarding the occurrence of a force majeure event. Further, the parties shall act in good faith and negotiate alternatives for compliance with the contract or term extensions, including for reimbursement of amounts already paid, since a force majeure event cannot, in any way, authorize unjust enrichment.

At last, in international contracts, it is fundamental to analyze the applicable law and agreed dispute resolution jurisdiction, since the interpretation of force majeure may be different in other jurisdictions. 

April 2019

_ the April │ 2019 edition of our Newsletter has the following highlights:

– Brazilian Securities and Exchange Commission (CVM) discloses Circular Letter with general guidelines for publicly-held corporations, foreign corporations and “companhias incentivadas

– Innovations on the Brazilian Securities and Exchange Commission’s risk-based plan

– Releasing of Brazilian Code of Corporate Governance for Startups & Scale-Ups

– B3 disclosed a report regarding companies’ adaptation to Novo Mercado Regulation

_ Brazilian Securities and Exchange Commission (CVM) discloses Circular Letter with general guidelines for publicly-held corporations, foreign corporations and “companhias incentivadas

On February 28th, 2019, the Brazilian Securities and Exchange Commission (“CVM”) disclosed Circular Letter CVM/SEP 03/2019, which provides general guidelines for publicly-held corporations regarding the disclosure of information and the execution of certain transactions.

CVM annually discloses these general guidelines, providing a consolidation of rules and general understandings regarding relevant topics and the day-by-day issues of publicly held corporations.

This year, the Circular Letter provided the following important news:

  • Brazilian Code of Corporate Governance: the information provided by the company in the Brazilian Code of Corporate Governance´s form shall be consistent with the one provided in the company’s reference form, internal regiments and any existent codes indicated by the company, which shall be available at Empresas.Net System.
  • Distant Voting: The Distant Voting Bulletin (“BVD”) shall not be a part of the Ordinary General Meeting’s management proposal or participation guide, as it is a document that contains specific rules of disclosure.

In case no shareholder sends the BVD through service providers (custodians and custodian bank), the company shall send, through Empresas.NET System, a statement made by the custodian bank informing that BVD’s were not exercised through service providers. In case the shareholders send the BVD exclusively through service providers, the company shall send, through Empresas.NET System, a consolidated statement of distant voting, even though the information is the same as the one presented by the custodian bank.

The disclosure of the final voting summary statement and final voting detailed statement attached to the minutes of the shareholders’ meeting at Empresas.NET System does not exempt the company from its obligation to disclose them in the correct category at Empresas.NET System.

In case the election of the members of the Board of Directors is to be carried out through the multiple voting process, shareholders who refrain from distributing their votes in the election of board of directors’ members through BVD shall also have their votes counted as refrained in the multiple voting process. Therefore, they will not participate in the appointment of the members of the board of directors.

  • Indemnification Compromise: The company shall disclose at Empresas.NET System the indemnification compromises made in favor of directors and officers, as well as the amendments and other documents related thereto.
  • Related Parties’ Transactions: usual and ordinary transactions related to cash management and treasury made between publicly-held companies and financial services companies which are related parties are exempt from the disclosure provide for in Schedule 30-XXXIII of CVM Instruction 480/09, even if they exceed the financial thresholds set forth in the aforementioned schedule, as long as the fees charges by the financial institution are within the range set forth in its disclosed general fee table.

Nevertheless, the companies remain obliged to disclose the operations among related parties in the Reference Form and financial statements, as provided for in the applicable regulation.

  • Shares Buyback Program: the company shall establish clear and objective mechanisms regarding share buyback programs, in order to avoid that transactions made in organized markets (i) have as a counterpart their controlling shareholders, members of the board of directors, member of the board of officers, members of the audit committee, or members of any statutory body with technical and advisory functions; and (ii) produce unusual effects on price, volume or liquidity, which may be beneficial to controlling shareholders, members of the board of directors, member of the board of officers, members of the audit committee, or members of any statutory body with technical and advisory functions in their negotiations with other market participants.

Additional information regarding the Circular Letter can be accessed in Portuguese at:


_ Innovations on the Brazilian Securities and Exchange Commission’s risk-based plan

On February 12th, 2018, CVM disclosed its biennial risk-based plan (“SBR”) for the years 2019 and 2020. This management system has been used since 2009 and is a way of presenting to the market some supervising actions that shall be taken by CVM’s technical areas over a given two-year-period.

The purpose of SBR is to improve CVM’s results in the future by innovating its processes and techniques.


CVM also informed that SBR will be more focused on promoting planning and execution, as well as on creating an exclusive goal for each one of the aforementioned actions.

Additional information can be accessed in Portuguese at:


_Releasing of Brazilian Code of Corporate Governance for Startups & Scale-Ups

On March 26th, 2019, the Brazilian Institute of Corporate Governance (“IBCG”) released its code of Corporate Governance for Startups & Scale-Ups.

This edition contains specific corporate governance structures for each phase of a Startup business, divided into: (i) creation; (ii) Minimum Viable Product – MVP; (iii) Product Market Fit – PMF; and (iv) scale. If a Startup presents a scalable, innovating and high growth potential business model, the last two phases will be considered as a transition from a Startup to a Scale-Up.

In addition, the code brings corporate governance pillars that shall be used in all phases aforementioned, although each one has its own features, which are:

  • Strategy & Society: medium and long term perspective and shareholders relationship.
  • People & Resources: intellectual capital and tangible and intangible resources needed.
  • Technology & Intellectual Property: distinction between ideas and operationalized models, in order to guaranty the sustainability and protection of the innovation.
  • Processes & Accountability: phase development and sustainable and consistent growth.

Additional information on the Brazilian Code of Corporate Governance for Startups & Scale-Ups can be accessed in Portuguese at:


_ B3 disclosed a report regarding companies’ adaptation to Novo Mercado Regulation

On February 15th, 2019, B3 disclosed a report about companies’ adaptation to the new Novo Mercado Regulation, which was amended in 2019 and shall be followed by the companies until their Ordinary General Shareholder Meeting to be held in 2021 (“Report”).

Among the new rules, we highlight the following:

  • New regulation on independent board of directors’ members characterization and their election procedure, as well as the board of directors’ opinion on the company’s indication policy for each candidate.
  • Mandatory evaluation of board of directors, its committees and board of officers.
  • Mandatory compliance methods, internal control and corporate risks, which cannot be cumulated with other operational functions.
  • Creation of an audit committee (statutory or not) in accordance with Novo Mercado’s new regulation.
  • Creation of an internal audit in accordance with Novo Mercado’s new regulation.
  • Disclosure of certain internal regiments and policies.

The survey conducted by B3 covered 90% of the companies listed in the Novo Mercado and most of them have not implemented the new regulation. The report shows that the new Novo Mercado Regulation is not followed by most of the companies yet.

Additionally, the report also contains B3’s orientations regarding the disclosure of information required pursuant to the new Novo Mercado Regulation, such as the indication of items in the reference form in which the information shall be disclosed.

More information regarding the Report can be accessed in Portuguese at:


April 2018

_the April │ 2018 edition of our newsletter has the following highlights:

CVM decided on the replacement of Board members elected through the multiple voting process

CODIM disclosed Guidance Statement on “Shareholder Participation at General Meetings”

CVM publishes annual report on its sanctioning activities in 2017

The founding partner Gyedre Carneiro de Oliveira was recently recognized by Who’s Who Legal 2017


_ CVM decided on the replacement of Board members elected through the multiple voting process

In a recent decision, the Brazilian Securities and Exchange Commission’s (“CVM”) decided on the replacement of members of the Board of Directors of a publicly-held company in case of vacancies due to resignation and death of members elected through the multiple voting process.

In this case, the Board of Directors was elected at the Ordinary General Shareholders Meeting (“AGO“) held in 2016 for a mandate of 2 years, and it was composed of 11 effective members and their respective alternates, among which 3 effective members of the Board of Directors and their respective alternates were elected through separate voting process, and the remaining members and their respective alternates were elected through the multiple voting process.

During the year 2016, two positions of effective members of the Board of Directors became vacant due to the death of one member and the resignation of another one.

Considering that the company’s bylaws did not establish the possibility of replacement of these members by the alternate members in case of permanent vacancy, the Board of Directors approved the appointment of 2 new effective members to replace the former members, with a mandate until the company’s next general meeting, pursuant to article 150 of Law No. 6,404/76 (“Brazilian Corporation Law”), as well as established that all members of the Board of Directors elected by multiple voting process would also have a mandate until the company’s next general meeting.

In this context, the managers’ proposal for the company’s 2017 AGO, the first meeting held after the vacancies in the Board included a resolution on the election of new directors, replacing all the Board members elected by the multiple voting process.

However, before the 2017 AGO, minority shareholders of the company submitted a complaint to the Superintendence of Corporate Relations at CVM (“SEP”) questioning the validity of the procedure adopted by the company to replace all Board members elected by the multiple voting process and requested the suspension of the election.

In summary, SEP decided in favor of minority shareholders, arguing that, in the event of vacancy of effective members of the Board of Directors for reasons other than dismissal by the general meeting, it would not be necessary to hold a new election of all members of the board of directors elected though the multiple voting process if the effective member was elected along with his/her respective alternate, in accordance with article 141, §3º of Brazilian Corporation Law.

Due to SEP’s decision, the company filed an appeal, claiming that the procedure was in accordance with the rules set forth in its bylaws and in the Brazilian Corporate Law.

In reviewing the case, CVM Director in charge of this procedure highlighted important guidelines for interpreting the provisions set forth in the Brazilian Corporation Law in case of replacement of members of the board of directors, as follows:

  • It is optional to appoint alternate members to the board of directors, and it is up to the shareholders, if they wish to do so, to define the duties of the alternates in the company’s Bylaws;
  • Unless otherwise provided for in the company’s Bylaws, in any case of vacancy, even in cases of election by multiple voting process, the general rule set forth in Article 150 of the Brazilian Corporation Law shall apply. Therefore, in case of vacancy a new members may be appointed by the Board of Directors with a mandate until the next general shareholder’s meeting; and
  • In the event of election through multiple voting process, in order to avoid the necessity of new election of the entire Board of Directors, the alternate must fulfill 2 conditions: (i) to be expressly allowed, pursuant to the company’s Bylaws, to fill the vacant position; and (ii) to have been appointed by the same group of shareholders that appointed the replaced member. If these requirements have not been met, pursuant to article 141, paragraph 3 of the Brazilian Corporation Law, the general shareholders’ meeting must convene to elect all members of the board of directors that have been elected though the multiple voting process.


Finally, CVM Board, by unanimous vote, accepted the appeal filed by the company and reversed SPE’s decision.

The decision can be accessed in Portuguese at:


_ CODIM disclosed the Guidance Statement on “Shareholder Participation at General Meetings”

On March 14, 2018, the CODIM (the Guidance Committee for the Disclosure of Information to the Market) disclosed the Guidance Statement on “Shareholder Participation at General Meetings”.

According to CODIM’s coordinators, the objective of the Guidance Statement No. 24 is to assist companies in developing and establishing mechanisms to facilitate and encourage the participation of shareholders, as well as to improve the disclosure of information to shareholders, enabling a more active involvement on their part in the General Meetings.

We have highlighted below the main recommendations:

  • Simplification of the shareholder participation process in the General Meetings, through the admission of digitally certified documents and an analysis thereof always based on the principle of objective good faith. It also recommends full disclosure of any exemption from compliance with other formalities, such as notarization and consular legalization and/or the Hague Apostille and other document requirements regarding shareholders’ representation;
  • Development and implementation of a Proposal Storage Center, by the company or third parties, through an electronic system, that would allow shareholders and custodians to make available any material related to the General Meeting, such as their voting statements, questions, proposals, and candidates to the board of directors and to the audit committee, in order to facilitate the disclosure of information to shareholders who will not be physically present at the General Meeting; and
  • Development and implementation of an Engagement Policy to improve the interaction between the Board of Directors and the shareholders on a continuous ways and not restricted to the General Meeting, enhancing the communication between shareholders and the company and increasing the transparency of actions taken by the Board.

The Guidance Statement on “Shareholder Participation at General Meetings” can be accessed in Portuguese at: http://www.projup.com.br/arq/121/arq_121_222577.pdf

_ CVM publishes annual report on its sanctioning activities in 2017

On March 27, 2018, CVM released the second edition of its report on sanctioning activity. This report contains key findings and results in this area, and aims at promoting a better understanding of CVM functions, as well as at enhancing market transparency.

According to the report, the total amount of fines applied in 2017 was R$166 million, a significant increase if compared to the average of the previous 3 years, which was R$ 103 million.

The report highlighted a few landmark cases that were filled and/or decided in 2017 regarding insider trading, abuse of voting rights by controlling shareholders, failure to comply with directors’ and officers’ fiduciary duties, irregular compensation of board members and failure to include mandatory information in the prospectus of public offerings and in the reference form (Formulário de Referência).

The Annual Report on CVM sanctioning activities in 2017 can be accessed in Portuguese at:


Our founding partner Gyedre Carneiro de Oliveira was recently recognized as an esteemed M&A lawyer by Who’s Who Legal, a leading directory on the global legal market, which, like Latin Lawyer, is edited by Law Business Research.

More information regarding the Who’s Who as well as our founding partner professional biography can be accessed at:


April 2017

Brazilian Federal Supreme Court (STF) rules that ICMS must be excluded from PIS/COFINS taxable basis

Extension of the Concept of Related Person in Public Tender Offers (OPA)

BM&FBovespa started the Closed Hearing for Amendments to the regiments for Level 2 and Novo Mercado trading segments

Founding Partner Gyedre Carneiro de Oliveira has been ranked in Chambers Global/2017 and in Chambers Latin America/2017


_Brazilian Federal Supreme Court (STF) rules that ICMS must be excluded from PIS/COFINS taxable basis 

After almost twenty years of discussion between State and taxpayers, the Brazilian Federal Supreme Court (STF) ruled that the state VAT (ICMS) must be excluded from the social contributions (PIS and Cofins) taxable basis because it does not fall within the concept of company’s turnover or gross revenue.

In its decision, the STF analyzed the appeal filed by a soybean oil company against a decision by the 4th Federal Court of Appeals that ruled as valid the inclusion of the ICMS in the PIS and Cofins taxable basis.

In the STF ruling, the prevailing understanding is that the collection of ICMS is not included among the sources for financing federal social contributions set forth in the Federal Constitution, since it cannot be considered as a share of the total sales or gross revenue of a company but only as a cash flow or accounting transit to be fully transferred to the State treasury.


It is worth noting that the STF did not rule on the decision’s effective date, in other words, it is uncertain whether the taxpayer would be limited or not in time to reclaim the PIS and Cofins paid in excess before STF’s ruling. This discussion depends on a specific request being filed by either party which has not been done yet. Thus, up to now, any company can file a lawsuit to claim back PIS and Cofins amounts unduly paid during the past 5 years.

STF’s decision is available in Portuguese at:


In a recent decision, the Board of Commissioners of the Brazilian Securities and Exchange Commission (CVM) expanded its understanding of the concept of related party for the purpose of public tender offer (OPA). In this sense, in order to correctly interpret and apply the related person’s concept, some elements should be considered, such as the interests involved and the actions of the shareholder in the preparatory procedures and in the context of the OPA.

The decision analyzed an appeal filed by a bank against a requirement of the Superintendence of Securities Registry (SRE) regarding the acceptance of registration of an OPA for cancellation of registration, with the adoption of special procedure, pursuant to CVM Instruction 361/2002 (“Instruction 361”).


In this sense, CVM Board, based on SRE opinion, considered the following elements and circumstances as parameters to define the shareholders in this specific case as related persons:

(i) the degree of kinship between the individual shareholder and the controlling shareholder (a) reinforcing the application of the rule of relative presumption and (b) clarifying that this relationship in itself is not sufficient basis to characterize them as a related person set forth in article 3, item VI, of Instruction 361, which is contrary to the SRE preliminary understanding;

(ii) the actions being aligned with the interests of the controlling shareholder, considering the joint decision between the individual shareholder and the controlling shareholder to propose the cancellation of the company’s registration after the shareholders’ waiver of the shareholders’ agreement clause regarding the maintenance of the company’s registry as a publicly-held company;

(iii) the execution of a shareholders’ agreement with the controlling shareholders;

(iv) being in favor of canceling the registration of the company as a publicly-held company, without knowing the terms of the offer, subsequently disclosed;

(v) being appointed to the board of directors of the company; and

(vi) being the partner of an affiliate of the company is not, in itself, sufficient to define as a related person, which is contrary to SRE’s understanding.

The minutes of CVM Board’s decision is available at the CVM’s website below:


_ BM&FBovespa started the Closed Hearing for Amendments to the regiments for Level 2 and Novo Mercado trading segments

The Brazilian Stock Exchange – BM&FBovespa – has presented the final proposals for the amendment to the Regulations for the BM&FBovespa special corporate governance segments (Level 2 and Novo Mercado) which will be submitted before a Closed Hearing (i.e, only for the companies listed in these segments). The first phase, which has begun on March 15th, 2017 and will continue until May 31st, 2017, is the period within which the listed companies can assess and clarify any doubts regarding the new proposals on their respective listing segment.

The second phase will take place from June 1st to June 23rd, 2017 and it is called the voting period, i.e., when each of the companies listed at BM&FBOVESPA’s Level 2 and Novo Mercado segments – 131 in Novo Mercado and 19 in Level 2 – will cast its vote on the matter. It should be noted that the quorum for approval is two-thirds of the listed companies on each segment


Among all the proposed amendments to the Novo Mercado Regulation, we highlight the following points:

  • Supervision and control: the companies will have the option either to have a statutory or non-statutory auditing committee. There were no changes on the attributions of these two committees.
  • Delisting: it must be preceded by a tender offer at a fair price with approval by 1/3 of the free float shareholders, except when the company’s bylaws establish a higher quorum; the voluntary delisting must comply with CVM Instruction 361.
  • Free Float: the company must keep the minimum free float of 25% or 15%, depending on its average daily trading volume. The period to restore the free float was increased from 6 to 18 months.
  • Compensation: the company must disclose on its Reference Form the minimum, average and maximum individual compensation of the members of the board of directors and statutory officers.
  • Documents: the definition of policies regarding compensation, appointment of the board of directors and statutory officers, related party transactions, risk management and socio-environmental report.
  • Acquisition of significant share interest: compulsory tender offer if a 20% to 30% share interest is reached, based on the highest price paid by the acquirer within the past 6 to 12 months. This rule will be exempted if the company already addressed, in its bylaws, protective measures against share dilution or poison pill provision.
  • Independent Board: the company must establish that its Board of Directors is formed by at least 20% or 2 (two) – whichever is higher – independent members, always adopting the roundup method, and also a process to check the independence level of the nominees to become independent members.
  • Dispersed capital on tender offers: the obligation to endeavor efforts to increase dispersed capital remains, except in the case of public offering of shares with restricted efforts.

BM&FBOVESPA’s presentation on the amendments proposal, as well as the drafts of the regiments can be accessed, respectively, in English and Portuguese at:




_Founding Partner Gyedre Carneiro de Oliveira has been ranked in Chambers Global/2017 and in Chambers Latin America/2017

Founding Partner Gyedre Carneiro de Oliveira has been ranked in 2017 edition of the Chambers and Partners Global and Latin America guides. The renowned British publication is one of the most prestigious legal directories which identifies and ranks the most outstanding lawyers in the world and in Latin America based on research and client interviews.

More information regarding the Chambers and Partners can be accessed at: www.chambersandpartners.com