Annually, both limited liability companies (LTDA) and corporations (SA) shall hold an ordinary shareholders’ general meeting (“Ordinary Meeting“), within the first four months following the end of the companies’ social year (which usually coincides with the fiscal year, in accordance with the Brazilian law. Therefore, the deadline is generally April 30th, considering that the fiscal year ends on December 31st.
For the Ordinary Meeting, it is mandatory that shareholders review and deliberate the Company’s accounts and financial statements, presented by its executive officers, as well as the election or re-election of the Company’s officers, directors and the members of the audit committee, as applicable.
To assure transparency and accountability, all documents relevant to the deliberations set forth in the Ordinary Meeting agenda shall be made available to all shareholders at least 30 days prior to the date scheduled for the Ordinary Meeting to take place. For most companies, this means that they will need to make public their accounts and financial statements one month in advance from the date of the Ordinary Meeting.
It is important to note that the approval of the company’s accounts and financial statements by the shareholders will release the respective officers, directors, and audit committee members from liability, except in cases of error, fraud, or willful misconduct.
However, if the company fails to promote the Ordinary Meeting or the Ordinary Meeting is not held in accordance with Brazilian legislation, the company officers, directors and members of the audit committee, as applicable, can be held liable for damages caused to third parties and/or to the company.