Guides and Books

Annual Quotaholders’ Meetings or assemblies of limited liability companies


Corporate Area


Every year, the quotaholders of limited liability companies shall hold the annual quotaholders’ meetings or assemblies, according to article 1,078 of Law No. 10,406/2002 (Brazilian Civil Code), to deliberate about  (i) the accounts of the officers; (ii) the balance sheet and the profit and loss statement; (iii) the appointment of officers, if applicable; and (iv) other matters that may be included in the agenda.

Accordingly, the companies must take the measures to release information, convene and carry out the meetings or assemblies, as follows.

1.    Date/Time Limit. The quotaholders meetings or assemblies for the yearly approval of financial statements must occur within the 4 months following the end of the fiscal year. Therefore, the limited liability companies whose fiscal year ends on December 31 shall hold the meeting or assembly until April 30 of the following year.

2.    Call Notice. According to article 1,079 of the Brazilian Civil Code, the limited liability companies that have 10 quotaholders or less must follow the call notice rules provided in their articles of association. On the other hand, the limited liability companies that have 10 quotaholders or less whose articles of association do not provide call notice rules and the limited liability companies that have more than 10 quotaholders must publish the call notice of the quotaholders’ meeting/assembly at least 3 times, in accordance with article 1,152, paragraph 3, of the Brazilian Civil Code (State Official Gazette and wide circulation newspaper).
The formality of the call notice by means of publication is not mandatory when all the quotaholders attend the meeting or assembly or declare in writing their awareness of its place, date, time and agenda, as provided in article 1,027, paragraph 2, of the Brazilian Civil Code.

3.    Prior Availability of Documents. Up to 30 days before the date of the meeting or assembly, the balance sheet and the profit and loss statement must be made available to the quotaholders that are not part of the management, in writing and with evidence of the respective receipt.

4.    Publication of the Financial Statements. The Board of Trade of the State of São Paulo (JUCESP) issued the Deliberation No. 2 of March 25, 2015, according to which the companies and cooperatives considered as large-sized under the terms of Law No. 11,638/2007 must publish their balance sheet and financial statements of the latest fiscal year in a wide circulation newspaper in the place of its head-office and in the State Official Gazette, before the date scheduled for the quotaholders meeting or assembly.
Therefore, according to such Deliberation, the mandatory publication of financial statements applicable to corporations according to the Law No. 6,404/1976 must also be applicable to entities considered as a large-sized, irrespective of their corporate type.
It is important to highlight that a company or group of companies under the same control shall be considered as large-sized if, in the previous fiscal year, their total assets were higher than R$ 240,000,000.00 or their annual gross revenue was higher than R$ 300,000,000.00, according to article 3, sole paragraph, of Law No. 11,638/2007.
Based on the referred to Deliberation, JUCESP has denied the registration of minutes of quotaholders meetings/assemblies for the approval of financial statements of large-sized limited liability companies which failed to previously publish their financial statements.
However, several companies and unions have succeeded in judicially challenging the legality of the financial statements publication requirement imposed to large-sized companies not organized as corporations, by claiming, in sum, that the provisions of Law No. 11,638/2007 do not impose the publication of the financial statements to large-sized companies, but only impose (i) the adoption of accounting procedures and the preparation of financial statements in accordance with Law No. 6,404/1976, and (ii) that the auditing shall be performed by auditors registered with the Brazilian Securities and Exchange Commission (CVM).
In case of companies that do not meet the large-size concept, they shall present along with the minutes of the annual quotaholders meeting/assembly a declaration attesting that they are not large-sized companies (either individually or in combination with other companies under the same control) and such declaration shall be signed by the officer and the accountant in charge.
Other state Boards of Trade issued rules similar to Deliberation No. 2, of March 25, 2015, issued by JUCESP, such as the Boards of Trade of Minas Gerais and Rio de Janeiro. Therefore, it is important to verify the specific requirements of the relevant Board of Trade to register the corporate act of each company.

5.    Effects. Except for err, willful misconduct or simulation, the approval of the financial statements without reservations releases the officers and, if it exists, the members of the finance committee from liabilities.
Although there is no express legal provision imposing penalties for failure to perform the annual approval of the financial statements, the limited liability company that fails to perform it may be impeded or have difficulties to develop their activities, such as the obtaining of financing or credit lines, participation in public bidding procedures, remittance of dividends abroad, among others.
Araújo e Policastro remains at your disposal for any necessary clarification and to assist you in connection with the measures necessary to hold annual quotaholders’ meetings/assemblies of 2017.

Araújo e Policastro