October 2023

_the october│2023 edition of our Newsletter has the following highlight:

– Brazilian Securities and Exchange Commission (CVM) amends points of CVM Resolution No. 175

– The extemporaneous registration of a partner’s withdrawal does not have retroactive effects


_ Brazilian Securities and Exchange Commission (CVM) amends points of CVM Resolution No. 175


CVM issued CVM Resolution No. 187, which entered into force on October 1, 2023, to introduce some changes to CVM Resolution No. 175, a regulatory framework for investment funds that revoked the former CVM Instruction No. 555 and consolidated the regulation of investment funds. Due to the relevant changes brought about by the new regulatory framework and the consequent emergence of doubts and questions regarding its provisions, the new changes introduced in CVM Resolution No. 175 reflect the requests made by market representatives.


These new amendments focus on the general provisions of the rule and its Normative Annexes I, II, III, IV and XI, which cover financial investment funds (FIF), receivables investment funds (FIDC), real estate investment funds (FII), equity investment funds (FIP) and pension funds, respectively.


In the general sphere of the rule, the changes include adjustments in different aspects, such as the transfer of open class quotas, the deadline for reviewing the financial statements, which is now up to 60 days after they are made available to the quotaholders, and the possibility for the custodian to request the administrator to convene quotaholders’ meetings.


In the Annexes, several changes were incorporated, including the inclusion of the mention of “Long-Term” in the disclosure of omitted FIF operations, the definition of subclasses of subordinated quotas in FIDCs, the relaxation of rules for the acquisition of credits owed by companies in reorganization, among other changes related to the composition and operation of these funds. The new regulation for investment funds promises to bring significant advances in the financial scenario, improving the transparency and security of investments.


CVM Resolution No. 175 mentioned above was published on the CVM website, and can be accessed through the link below:




_ The extemporaneous registration of a partner’s withdrawal does not have retroactive effects


Unanimously, the 4th Panel of the Superior Court of Justice (STJ) decided that the registration with the Board of Trade of a corporate act resolving on the withdrawal of a partner from a company after the deadline provided for by law, that is, 30 days from the signing of the document, does not have retroactive effects, which may lead to its liability for debts assumed by the company.


The central case involved the conversion of a limited liability company into a simple company in 2004, transferring the filing of the company’s corporate acts from the Board of Trade to the Registry of Legal Entities. However, the corporate conversion instrument was only registered years after the date of the act, so that the transformation was not properly publicized.


After receiving notices in tax foreclosures related to debts acquired by the company after her withdrawal, the former partner filed a lawsuit against the Board of Trade of the State of Rio de Janeiro to correct the filing date of the corporate change but was unsuccessful in the lower courts.


In the STJ, Reporting Minister Antonio Carlos Ferreira noted that, as from the conversion to a simple company, the corporate acts were registered exclusively with the Civil Registry of Legal Entities, including the corporate act that resolved on the withdrawal of the managing partner of the company. However, in the case in question, the conversion of the type of company was filed with the Board of Trade only a decade later, resulting in the formal permanence of the businesswoman as a managing partner during that period.


According to the Reporting Minister Antonio Carlos Ferreira, “the registration normally confirms the existence, allowing the identification of the individual entrepreneur or the business company and its submission to the set of business rules due to the economic activity. However, corporate changes need to be disclosed through registration to be effective before third parties.”


The Reporting Minister also pointed out that, according to articles 1,150 and 1,151 of the Civil Code and article 36 of Law 8,934/1994, changes to the articles of incorporation take effect from the date they were written, provided that they are registered within the following 30 days, or from the date of registration, if the deadline is not met. In dismissing the appeal, the Reporting Justice concluded that the lack of continuity of the registration with the Board of Trade allowed the lawsuits to be directed against the former managing partner, due to her formal position in the registered entity.


More information regarding the case can be found at the link below:



October 2021

_the october│2021 edition of our Newsletter has the following highlight:

– CVM Resolution 44 issued in August 2021 replaces CVM Instruction No. 358/2002

– Understanding Shareholders’ Agreements: Voting Rights

_CVM Resolution 44 issued in August 2021 replaces CVM Instruction No. 358/2002


In August 2021, the Brazilian Securities and Exchange Commission (“CVM”) issued CVM Resolution No. 44, which addresses the disclosure of information related to a material act or fact, the trading of securities pending an undisclosed material act or fact, and the disclosure of information related to the trading of securities (“CVM Resolution 44”), which revoked CVM Instruction No. 358/2002 (“ICVM 358”).

CVM Resolution 44, which came into force on September 1, 2021, has as its main objectives: (i) adapt the text of ICVM 358 that treats insider trading, in order to bring the provisions closer to the consolidated interpretation in CVM on the subject; (ii) make the regime of investment plans more flexible; and (iii) make the obligation of disclosure of information release policy by publicly-held companies more flexible.

While companies start the process of updating the policies of disclosure of information and trading of securities in order to reflect the new provisions introduced by CVM Resolution 44, we highlight the main changes briefly below.


Presumptions for characterizing the misuse of privileged information

To reflect the consolidated interpretation of the CVM board, CVM Resolution 44 provides the following relative presumptions in order to characterize the misuse of privileged information in securities trading:

• Presumption of use: The person who has traded securities with material information not yet disclosed has made use of such information in said trading. This presumption also applies to a former manager who has left the company for three months or less ago and has material, undisclosed information;

• Presumption of access and knowledge: Controlling shareholders (direct or indirect), managers and fiscal council (conselho fiscal) members, and the company itself, have access to all material information not yet disclosed. Such individuals, as well as those who have a commercial, professional or trust relationship with the company, upon having access to material information not yet disclosed, know that it is privileged information; and

• Presumption of relevance: Since the beginning of studies or analyses, information regarding the following matters are relevant: operations of any form of corporate reorganization or business combination, change in the company’s control, decision to promote the cancellation of the publicly- held company’s registration or change in the change of the environment or segment for trading of its shares, as well as a request for judicial or extrajudicial recovery and bankruptcy filed by the company itself.


Autonomous prohibition on trading securities prior to the disclosure of quarterly and annual information

The ICVM 358 already regulated the prohibition of trading securities by controlling shareholders, managers, and fiscal council members in the period of 15 days prior to the date of disclosure of the company’s quarterly accounting information and annual financial statements, and this prohibition was maintained by CVM Resolution 44, in an objective form.

However, CVM Resolution 44 has formalized the method of calculation of the 15 day period related to the prohibition, which must be made excluding the day of disclosure, observing, however, that, on the day of disclosure, trades can only be carried out after such disclosure has been effectively made. In addition, CVM Resolution 44 expressly provides that the referred prohibition is absolute, that is, it is not necessary to demonstrate the intention of obtaining undue advantage from the trading.


Regime of individual investment plans

Regarding the rules related to investment plans, which are instruments that enable their signatories to trade securities during prohibited periods, CVM Resolution 44 has reduced from 6 to 3 months the minimum period related to the effects of the plans and their eventual modifications and cancellations.

Furthermore, CVM Resolution 44 has expanded the list of individuals who may enter into such plans, making it possible for anyone who has a relationship with a publicly-held company that makes them potentially subject to the trading prohibitions to enter into such plans.


Information disclosure policy by publicly-held companies

The policy for disclosing material acts or facts is no longer mandatory for all publicly-held companies, and is now required only for companies that, cumulatively: (i) are registered in category “A”; (ii) have been authorized by a market managing entity to trade shares on the stock exchange; and, (iii) have outstanding shares, with the exception of the shares held by the controller, people related to the controller, company’s managers and those held in treasury.


The full text of CVM Resolution 44 can be accessed in Portuguese through the following link:



_Understanding Shareholders’ Agreements: Voting Rights


Expressly foreseen in the Brazilian Corporation Law, the shareholders’ agreement is an important instrument of corporate governance for companies, and through which shareholders may establish rules regarding their relationship within the company, such as the exercise of voting rights, election of managers and transfer of shares. It is worth highlighting that shareholders’ agreements may be executed by all shareholders or by part of them. This enables the existence of more than one shareholders’ agreement within the same company.

We are now initiating a series of articles in which the main aspects related to shareholders’ agreements will be addressed.

In this first article, we present some considerations regarding the political rights that can be contemplated within a shareholders’ agreement, with emphasis on the right to vote and its implications, in particular qualified quorums, golden shares, block voting, prior meetings, and voting limits.


Voting rights and qualified quorums

The Brazilian Corporation Law establishes as a general rule that each common share is entitled to one vote in the deliberation of the shareholders’ meeting. It is possible, however, to restrict the voting rights of the preferred shares or to create classes of common shares with the attribution of plural voting, not exceeding ten votes per share. It is through the vote, and always observing the interests of the company, that the shareholders express themselves regarding the matters on the agenda at a shareholders’ meeting, so that, depending on the corporate structure, a single vote can be decisive for the approval or rejection of a certain matter.

As a standard rule, decisions at a shareholders’ meeting are taken by an absolute majority of votes (that is, a majority of the votes of those present at the meeting), excluding blank votes.

Regardless of the quorums provided by law, it is possible – and fairly common – for bylaws and shareholders’ agreements to establish higher approval quorums for a wide variety of matters in order to accommodate the different concerns and/or needs of the shareholders on a case-by-case basis.

As shown in the following items, the shareholders’ agreement may also provide specific rules for the exercise of voting rights, and it is always important to ensure the compatibility of the rules created for the agreement to be effective.


Golden Shares

Another voting mechanism are the golden shares or, as a term used in the context of privatizations of Brazilian companies, “special class shares”. The purpose of golden shares is to allow their holder to have distinctive influence on the deliberations of the general meeting, even if its owner does not hold the majority of the company’s capital stock.

For instance, in the case of the privatization of Embraer, the Brazilian Union became the holder of a single special class common share, which grants it, among other dispositions, veto rights in a series of matters, including the change of Embraer’s name and corporate purpose.

The golden share may also be used in contexts other than privatizations. In family businesses, for example, it may be held by the family leader and granted certain special rights that preserve his/her interests within the family context.


Block Voting

Block voting, in turn, is a mechanism capable of standardizing the vote of shareholders integrating the same group. Under this mechanism, it is possible to establish approval quorums within the block itself, so that the decision taken by such quorum is binding on all members of the block.

However, the matters foreseen in the shareholders’ agreement for the purposes of block voting are not unlimited. As stated in Special Appeal 1.152.849-MG, judged by the Superior Court of Justice, there is a distinction between the vote of will, which refers to the manifestation of the shareholders’ will, and the vote of truth, which consists in the shareholder’s assessment regarding the correspondence of the document in question and the reality of the corresponding object. Therefore, a shareholders’ agreement that has as its object the vote of truth, which declares the legitimacy of the managers’ acts, is considered invalid.

Such mechanism is important, for instance, in companies that have as shareholders members of different family units. Therefore, it is possible, via shareholders’ agreement, to establish that each family unit will vote as a block, which, in addition to ensuring a greater representation of each unit in corporate decisions, ends up being a way to bind future generations.

As an example, the Natura & CO Holding S.A. shareholders’ agreement currently establishes five shareholder blocks, and there is a specific chapter in the document to address them, providing, among other matters, the definition of a representative and an alternate for each block, and the specification that each block may enter into shareholder and/or voting agreements with each other for the purpose of organizing the block’s activities within the scope of the Natura & CO Holding S.A. shareholders’ agreement.


Prior Meetings

The purpose of prior meetings is to enable a group of shareholders (whether the controlling group or not) to establish, in advance, their votes regarding the matters of a given meeting. The shareholders’ agreement, therefore, may regulate prior meetings, including the rules for calling, installing, and approval quorums.

This mechanism is often used together with block voting. Using the same example as in the previous item, the Natura & CO Holding S.A. shareholders’ agreement regulates prior meetings, which must be called and held prior to each shareholders’ meeting. In this case, only the representatives of the shareholders’ blocks attend, and the resolutions passed at the prior meeting (according to the quorum and rules established in the agreement) bind the vote of all shareholders that are parties to the agreement.


Voting Limit

Voting limits can be established in the bylaws and shareholders’ agreements as a corporate governance tool to limit the interference of a certain shareholder or group of shareholders in the company’s decisions. This limitation can be used, for example, to create equality among shareholder groups – which in a family business can be useful in creating a balance in voting rights among family units with very different corporate interest between them, without interfering in other rights inherent to each unit’s corporate interest, such as profit sharing.

Out of curiosity, it is worth mentioning that currently B3’s bylaws establish a shareholder voting limit, so that no shareholder or group of shareholders may, as a general rule, cast votes higher than 7% of the capital stock.

Considering the above, the relevance of the management of political rights in shareholders’ agreements is evident, since its treatment may directly influence the outcome of the resolutions at shareholders’ meetings. In upcoming publications, we will mention other aspects related to political rights in shareholders’ agreements, such as the election of directors and officers, the binding of votes regarding management and the resolution of deadlocks.


The text above was published in legislation and market session of Capital Aberto on October 6, 2021, and can be accessed in Portuguese through the link below:


October 2020

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

– CVM holds public hearing regarding insider trading

– CVM condemns publicly-held company’s managers for irregularities in capital increase

_ CVM holds public hearing regarding insider trading


The Brazilian Securities and Exchange Commission (“CVM“) has submitted to public hearing a proposal to reform the current CVM Instruction No. 358/02 ( “ICVM 358/02“),  in order to improve the wording and consolidate CVM’s jurisprudence on insider trading. The draft presented in the Public Hearing Notice SDM 06/20 proposes the following amendments:


  • Relative Presumptions: In the current wording of article 13 of ICVM 358/02, the literality of the article may be interpreted as an absolute prohibition to trade securities issued by the company before the disclosure of a relevant act or fact by those who, by virtue of their position or function in the company, its controlling company, its subsidiaries or affiliates, have knowledge of the information relating to such relevant act or fact. However, CVM’s Board has already consolidated the understanding that these are relative presumptions of (i) existence of relevant information (presumption of relevance), (ii) access to privileged information (presumption of access) and (iii) use of privileged information in negotiations (presumption of use), which may be uncharacterized by evidence to the contrary. In this sense, the new wording of the article would incorporate such presumptions into the normative text;


  • Objective trading prohibition before disclosure of ITR and DFP: creation of an autonomous and objective prohibition to trade securities issued by the company 15 days prior to the disclosure of the company’s quarterly information (“ITR”) and annual information (“DFP”);


  • Investment/disinvestment plans: proposal to relax the current rules for investment plans, reducing the minimum period for plans to come into force from six to two months;


  • Disclosure policy: in line with CVM’s compliance costs project, proposal to amend article 16 of ICVM 358/02, to provide that only publicly-held companies registered in category A before CVM, authorized by a market management entity to trade shares on the stock exchange and outstanding shares, would be required to prepare a disclosure policy for relevant acts or facts.


The public hearing is open for suggestions until November 13th, 2020. More information on the public hearing may be accessed through  the link below (in Portuguese only):




_ CVM condemns publicly-held company’s managers for irregularities in capital increase


On September 29, 2020, the CVM’s Board judged PAS CVM nº RJ2016/7929 (SEI Electronic Process nº 19957.007552/2016-43), in which it analyzed the responsibility of two managers of a publicly-held company (the “Defendants”), due to irregularities in a capital increase carried out by the company.


In summary, the Defendants, as members of the company’s board of directors, approved the execution of some agreements with their subsidiaries, which provided that the Defendants would grant the company a personal guarantee to their obligations and, in return, they would be remunerated on the guaranteed debt (“Agreements”). In addition, the company would hire an insurance (D&O) in favor of the Defendants to protect them from certain risks arising from the exercise of the position of officer, a position that both also held in the company. If the referred insurance was not contracted, the company itself should keep the Defendants free from possible risks and compensate them regarding labor, tax and social security debts arising from statutory liabilities. Therefore, the Defendants started to hold credits against the company, which were not reflected in the company’s financial statements from 2011 to 2015.


Afterwards, the company issued a notice to shareholders informing the approval of a capital increase at a meeting of the board of directors, through the subscription of shares in cash and credits, with the issuance of common and preferred shares. As a result of the capital increase, the other shareholders would be diluted by 91.84%. After a request for clarification to the company, it confirmed that related parties, including the Defendants, would subscribe shares with  credits held against the company, as well as that some of these credits were a result from the aforementioned Agreements.


The Reporting Director, Flávia Perlingeiro, pointed out several irregularities that occurred in the capital increase. The first of them, is the violation of Article 156 of Law No. 6,404/1976 (“Brazilian Corporation Law.”), which deals with conflict of interest. In this sense, it shall be noted that the Defendants entered into the Agreements with the company not only on behalf of their subsidiaries, but also, in their own name.


In this line, Flávia Perlingeiro mentioned that the Defendants’ conflict of interest (a priori) would be present. In other words, subject to the provisions of Article 156 of the Brazilian Corporation Law, in addition to being prevented from deliberating on the transaction with themselves and having to reveal the conflict to those who should speak out about it, the Defendants should also have refrained from even participating in the negotiations on the transaction, both as officers of the company, and as directors, which did not happen.


Additionally, SEP also accused the managers for not having reflected the credits arising from the Agreements in the financial statements from 2011 to 2015, representing a concealment of the company’s liabilities and of transactions with related parties. According to the Reporting Director’s vote, Pronouncement CPC 05 (R1) (“CPC Pronouncement”) clarifies that it constitutes a transaction with a related party  the transfer of resources, services or obligations between an entity that reports the information and a related party, regardless if there are any charges in return.


CPC Pronouncement also provides that if transactions between related parties occur during the period covered by the financial statements, the nature of their relationship, the information on the transactions, balances, commitments, shall be disclosed in said statements. Thus, the information referring to the Agreements should have been included in explanatory notes to the financial statements, characterizing a violation to the Brazilian Corporation Law and the CPC Pronouncement.


Finally, the Defendants also failed to comply with Article 157, §4 of the Brazilian Corporate Law combined with Article 3, caput, of ICVM 358/02, considering that one of the Defendants, who also held the position of Investor Relations Officer of the company, did not disclose a relevant fact regarding the capital increase, instead only a notice to shareholders was published.


Although a capital increase is not a situation expressly disposed among those considered as a potentially relevant act or fact, under the terms of ICVM 385/02, the list provided in said instruction is exemplary. As already decided by CVM, the list neither exhaust the possibilities of a relevant fact, nor determines a relevant fact, always being necessary to analyze the fact and the company to which it refers.


The Reporting Director also took the opportunity to distinguish a relevant fact from a notice to shareholders, in the first case the disclosure of a relevant fact aims to publicize situations with the potential to influence the decision to buy, hold or sell shares issued by a company. Therefore, it is a communication aimed at the market in general, covering the entire investing public. The notice to shareholders, on the other hand, is the title given to communications addressed to the company’s shareholders, provided in the Brazilian Corporation Law and CVM regulation. Therefore, it is a communication with a more restricted scope and audience than those applicable to relevant facts.


When the capital increase was carried out, the notice to shareholders then released by the company was intended only for its own shareholders, and had no emphasis to the high dilution potential resulting from such transaction. However, precisely due to this dilution, a relevant fact should have been disclosed to provide broad communication to the market.


Therefore, the Reporting Director concluded that the fact that there was no complaint by the other shareholders, investors or creditors, as well as that there was no unusual variation in the trading of the shares issued by the company, when the information was disclosed, does not exempt the Investor Relations Officer for failing to carry out the communication required by ICVM 358/02.


CVM’s Board decided to condemn the Defendants, as members of the board of directors and officers of the company (one of them being the Investor Relations Officer – DRI) to pay a fine for failing to comply with Articles 156, 176, §5 and 177, §3 of the Brazilian Corporation Law and the CPC Pronouncement and to give the DRI a warning for not disclosing a relevant fact regarding the capital increase.


More information regarding PAS CVM 19957.010904/2018-18 (RJ2018/8378) can be accessed, in Portuguese, at the link below:



October 2019

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

– Provisional Measure regarding Declaration of Rights of Economic Freedom is converted into Law

– Brazilian Federal Senate approves councilors’ nomination and CADE’s quorum is restored

– CVM regulates the electronic publication of corporate acts

_ Provisional Measure regarding Declaration of Rights of Economic Freedom was converted into Law 

On September 20th, 2019, Provisional Measure No. 881/19 (“MP”) was sanctioned by the Brazilian President and converted into Law No. 13.874/19, which establishes the Declaration of Rights of Economic Freedom. This Law establishes rules regarding the protection of free enterprise and the free exercise of economic activity, the actions of the State as normative and regulatory agent and other measures.

Among the changes regarding corporate aspects, we highlight the following: (i) disregard of legal entity; (ii) single-member limited liability company; and (iii) new rules regarding corporate acts’ file before the Boards of Trade.

Disregard of Legal Entity: the Brazilian Civil Code was amended to provide the following new requirements for the disregard of a legal entity: distortion of the legal entity purpose, which consists in the fraudulent use of the legal entity for the purpose of harming creditors and for the practice of illegal acts of any nature, or fraude (confusão patrimonial), which is the improper confusion between the companies’ and the partners’ assets. The mere existence of an economic group without the presence of the other requirements does not authorize the disregard of the legal entity. The mere expansion or change in the original purpose of the legal entity does not represent a distortion of the legal entity purpose. The disregard of legal entity is also applicable to the extension of the obligation of partners or directors to the legal entity.

Single-member Limited Liability Company: the Brazilian Civil Code was also amended to allow the constitution of a limited liability company by a single quotaholder, and the single partner’s constitution document shall observe the article of associations’ provisions, when applicable. Unlike EIRELI, it is not required for a Single-Quotaholder Limited Liability Company to have a capital stock equivalent to, at least, one hundred (100) minimum wages and the same individual may have more than one Single-Quotaholder Limited Liability Company.

New rules regarding corporate acts’ file before the Board of Trade: Law No. 8.934/34 (Trade Registration Act) was amended to provide the possibility of automatic file of documents and declarations regarding mere register information before the Board of Trade,  as well as certain corporate acts which follow DREI’s instruments standards. For other corporate acts, Law No. 13.874/19 provides that the analyses and registration before the Boards of Trade shall take up to five business days, depending on the case.

Law No. 13.874/19 can be accessed in Portuguese at:


_ Brazilian Senate approves councilors’ nomination and CADE’s quorum is restored

On October 1st and 2nd, 2019, the Brazilian Federal Senate (“Senate”) approved the appointment of four new members of the Administrative Council of Economic Defense (“CADE”).

Indicated by Brazilian President Jair Bolsonaro, the following members were elected as new CADE’s councilors: Lenisa Rodrigues Prado, Sérgio Costa Ravagnani, Luiz Augusto Hoffman and Luis Henrique Bertolino Braido (“New Counselors”).

After the publication of his appointment in the Brazilian Official Journal (“DOU”), on October 7th, 2019, Councilor Sérgio Costa Ravagnani took office. As a result, the minimum quorum of four Counselours for the establishment of CADE’s Court (“Court”) was restored and cases that were suspended since mid-July are being processed again.

The other members elected shall take office within the next days, after the publication of their appointment in the DOU.

More information regarding the appointment of New Counselors can be accessed in Portuguese at:



_ CVM regulates the electronic publication of corporate acts

On August 5th, 2019, Provisional Measure No. 892 (“MP 892”) was issued, which amended article 289 of Law No. 6.404 of December 15th, 1976 (“Brazilian Corporation Law”), establishing that publications ordered by the referred law shall be made electronically, provided that (i) publicly-held companies shall follow the regulation issued by the Brazilian Securities and Exchange Commission (“CVM”); and (ii) closely-held companies shall follow the regulation issued by the Ministry of Economy (“ME”).

In accordance with MP 892, on September 30th, 2019, CVM’s Resolution No. 829 (“Resolution 829”) and ME’s Ordinance No. 529 (“Ordinance 529”), regarding corporation acts’ electronic publications proceedings, were published in the Brazilian Official Journal (“DOU”, and, jointly with Resolution 829, the “Regulations”).

Regarding publicly-held companies’ publications, Resolution 829 provides that:

  1. publications shall be made on NET system;
  2. documents will be considered as published on the date of their disclosure on NET system;
  3. in case of Articles 151 and 258 of the Brazilian Corporation Law, regarding publication of a manager’s resignation letter and the notice for public offer to acquire control, as well as in other situations provided for in the Brazilian Corporation Law or in CVM’s Ruling in which the publication is made by third parties, the publication shall be made by sending the documents to the company, with a copy to the Corporate Relations Superintendence (“SEP”).The company shall immediately make the publication on NET system.
  4. publications will be made without previous analyses by CVM and B3 and do not imply their agreement with the content of the documents;
  5. publicly-held companies shall continue to disclose on their website the publications provided by the Brazilian Corporation Law; and
  6. the obligation for publicly-held companies to file documents before the Boards of Trade is maintained in cases provided by the Brazilian Corporation Law.

Closely-held companies’ publications shall be at the Public Digital Bookkeeping System (“SPED”), pursuant to Ordinance 529. Such publications authenticity will be digitally certified by an authority registered before the Brazilian Public Key Infrastructure (“ICP Brazil”). SPED will also allow the issuance of documents that prove the authenticity, inalterability and the date of publication of corporate acts.

We highlight that Resolution 829 and Ordinance 529 may be amended or revoked if MP 892’s wording is modified during the National Congress decision regarding the conversion of MP 892 into Law until December 3rd, 2019.

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



October 2018

_the October | 2018 edition of our Newsletter has the following highlights:

São Paulo Court of Justice decides on the removal of a partner from a limited liability company due to serious misconduct

Brazilian Federal Revenue Counsel acknowledges the regularity of a corporate reorganization structure involving the sale of corporate stakes by investment funds (FIP)

Brazilian Superior Court of Justice decides on the prescriptive period applicable to the breach of contractual obligations

_São Paulo Court of Justice decides on the removal of a partner from a limited liability company due to serious misconduct

On August 22nd, 2018, the 1st Reserved Chamber of Corporate Law of São Paulo’s Court of Justice, by unanimous decision, granted the appeal (“Appeal”) filed by a limited company and its majority quotaholder to remove the minority quotaholder due to his serious misconduct practices.

The Appeal intended to reform an award enacted within a limited liability company’s partial dissolution claim, which was dismissed and kept the minority quotaholder – who was also the company’s manager – as a quotaholder of the company based on the following grounds: (i) the serious misconduct practices attributed to the minority quotaholder were not proved; and (ii) the breach of the affection societatis is not sufficient motive to judicially remove a quotaholder from a limited liability company corporate structure.

At the decision on the Appeal, the reporting judge acknowledged that it was not possible to remove a quotaholder from a limited liability company solely based on a mere lack of affectio societatis. However, the reporting judge reformed the award enacted by the ordinary courts, as it was proved that: (i) the minority quotaholder disposed of the company’s assets to pay personal expenses, regardless of the necessary independence between his personal belongings and the company’s assets; and (ii) the conflicts between the quotaholders prevented the management and the operation of the company, compromising the regular course of the corporate business.

The reporting judge understood that the acts undertaken by the minority quotaholder consists not only in the breach of the affectio societatis – an essential element for the incorporation of limited liability companies, but also represented a serious misconduct, therefore there was sufficient reason to determine the company’s partial liquidation, with the removal of the quotaholder who incurred in the aforementioned misconduct and later calculation of his compensation in view of such a removal.

More information on the Appeal can be accessed in Portuguese at:


_Brazilian Federal Revenue Counsel acknowledges the regularity of a corporate reorganization structure involving the sale of corporate stakes by an investment fund (FIP)

On June 15th, 2018, the 1st Ordinary Panel of the 2nd Chamber of the Brazilian Federal Revenue Counsel (“CARF”) ruled upon an administrative proceeding (“Administrative Proceeding”) in which it acknowledged the regularity of a corporate reorganization structure involving the transfer of corporate interest to an investment fund (“FIP”) followed by the sale of such corporate interest to a third party, which resulted on the reduction of capital gains taxes (“Corporate Reorganization”).

The Administrative Proceeding was originated from a tax assessment notice issued by the Brazilian Federal Revenue Services regarding the collection of corporate income tax (“IRPJ”) and social contribution on net profits (“CSLL”) on the sale of shares by a FIP because the FIP had only been incorporated as an instrument for tax evasion.

Within the Corporate Reorganization, a holding company controlled by the FIP had its capital stock reduced, with the payment of the amount due to the FIP made with the transfer of the shares then held by such holding company in its subsidiaries. As a result, the FIP became the direct quotaholder of the subsidiaries and,  in the following steps of the Corporate Reorganization, was able to sell these shares in a more tax efficient way.

The Brazilian Federal Revenue Services argued that the FIP was incorporated as an instrument for tax evasion, once the taxation of capital gains arising from the sale of its assets, such as the shares issued by the subsidiaries, is different and results in the reduction of the IRPJ and CSLL that would be due in case the holding company had sold these shares and recorded said capital gain.

Therefore, Brazilian tax authorities asked that the sale of the shares directly by the FIP not be enforceable for tax purposes, as it was deemed to be a simulated transaction, in order to levy the IRPJ and CSLL on capital gains as if the holding company had sold the shares of its subsidiaries held by it before the capital stock reduction.

The reporting judge, followed by the majority of the judges, sustained that, in the Corporate reorganization structure: (i) the FIP was not incorporated only as an instrument to allow the reduction of taxes on capital gains; (ii) the FIP’s role was to consolidate the management of assets, which may cause some assets to be sold for the acquisition of more profitable ones; and (iii) the funds obtained with the sale of the shares did not return to the holding company; instead, they were used by the FIP to acquire other assets, which, between 2009 and 2015, resulted in the increase of the FIP’s net worth in more than R$300 million, which emphasizes the negotiation purpose of the FIP’s incorporation.

It is important to mention that in October 2017, the Brazilian Federal Revenue Services enacted Provisional Measure No. 806, which caused the taxation of capital gains arising from the sale of assets by a FIP to be the same as the taxation of capital gains arising from the sale of assets by a company. The aforementioned Provisional Measure was not converted into law and has lost its validity in April 2018.

More information on the Administrative Proceeding can be accessed in Portuguese at:


_Brazilian Superior Court of Justice decides on the prescriptive period applicable to the breach of contractual obligations

On June 27th, 2018, the 2nd Section of the Superior Court of Justice (“STJ”), by majority of votes, denied the Divergence Appeal filed on a Special Appeal (“Divergence Appeal”) in order to maintain the decision that fixed the prescriptive period of 10 years to file a motion for indemnification in case of breach of contractual obligations.

On the Divergence Appeal it was discussed whether, in case of breach of contractual obligations, the limitation period for the creditor to charge the debtor for the nonperformance of a contractual obligation would be decennial, pursuant to the Article 205 of the Brazilian Civil Code, or triennial, pursuant to Article 206, paragraph 3th, subparagraph V of the aforementioned code.

In the Divergence Appeal judgement, Justice Nancy Andrighi, followed by the majority of STJ justices, clarified that:

(i) The expression “civil repair” in Article 206, paragraph 3th, subparagraph V, of the Brazilian Civil Code does not include the indemnification of any and all negative, patrimonial or extra patrimonial, consequences arising from the breach of legal duties, but only the civil liability arising from illegal extra-contractual acts;

(ii) In case of contractual civil liability, i. e., the liability arising from the breach of a contracted duty, whatever the creditor claim may be – specific performance of the contracted obligations, reimbursement of damages and losses or contractual resolution, the prescriptive period is always decennial; and

(iii) The different treatment given to the contractual civil liability, which prescriptive period is decennial, and the extra-contractual civil liability, which prescriptive period is triennial, does not violate the equality principle, since the circumstances that generate them are absolutely distinct.

More information on the Divergence Appeal can be accessed in Portuguese at: