Periodic Obligations for the Year 2020

 In Newsletters

We inform our clients about the need to comply with the following periodic obligations in 2020:

I. Approval of Management Accounts/Report and Financial Statements

According to the Brazilian legislation, limited liability companies and corporations shall hold, within the 4 months following the end of each fiscal year (in general, up to April 30 of each year), a quotaholders’ meeting (“reunião de sócios”), in the case of limited liability companies, or a General Shareholders’Meeting (“Assembleia Geral Ordinária”), in the case of corporations, to, among other matters:

(i)    analyze and approve the management accounts/report and the financial statements;

(ii)    decide upon the allocation of the profits/losses of the fiscal year; and

(iii)     nominate the directors/officers, if applicable.

It is highlighted that:

– corporations shall: (i) within at least 1 month prior to the date in which the General Shareholders’ Meeting shall be held, make available to the shareholders its financial statements and other documents required by law; and (ii) within at least 5 days prior to the date in which the General Shareholders’ Meeting shall be held, publish the referred documents, except in case the corporation is a closed-held company with less than 20 shareholders and net equity below the amount of R$ 10,000,000.00 (ten million de reais).

– limited liability companies shall make available to the quotaholders that are not invested with management authority the documents related to the management accounts/report and the financial statements. These documents shall be made available in writing, with proper evidences, 30 (thirty) days in advance to the meeting’s day.

In addition, regarding the limited liability companies, the publication of the financial statements is not required. Nevertheless, the registration of the minutes of the quotaholders’ meeting deciding on the management accounts/report and the financial statements is conditioned to the presentation of (i) a copy of the financial statements and other documents being approved; and/or (ii) a statement that the company requiring the registry is not a “large size entity” (sociedade de grande porte), as defined by Law 11.638/07[1].

II. Submission of Periodic Information to the Brazilian Central Bank – BACEN

 (i) Foreign investment in Brazil

 Furthermore, Brazilian companies’ receiving  foreign capital are obliged to disclose Periodic Information of Foreign Capital in Brazil to BACEN, by means of a register in the RDE-IED Module, in the terms of Circular 3.689/2013.

For the year 2020, Brazilian companies’ receiving foreign direct investment with net equity and total assets below BRL 250,000,000.00 (two hundred and fifty million Brazilian reais) shall, up to March 31, include in the specific option of the RDE-IED system, its updated corporate structure dated as of 12/31/2019.

In turn, Brazilian companies’ receiving foreign direct investment with net equity or total assets equal to or greater than BRL 250,000,000.00 (two hundred and fifty million Brazilian reais) shall fill in the specific option of the RDE-IED system the “Financial Economic Statement”, in accordance with the following deadlines:

  • Until March 31, referring to the base date of December 31 of the previous year;
  • Until June 30, referring to the base date of March 31;
  • Until September 30, referring to the base date of June 30;
  • Until December 31, referring to the base date of September 30.

 (ii) Brazilian investment abroad

Individuals or legal entities resident, domiciled or headquartered in Brazil, holding amounts of any nature, currency, assets and rights outside the national territory, totaling an amount equal to or greater than the equivalent to USD 100,000.00 (one hundred thousand American dollars) are obliged to present the Annual Declaration of Brazilian Capital Abroad (“Annual CBE”) to the BACEN, on the terms of the Resolution 3,854/2010 and Circular 3,624/2013. Note that there is a provision for a Quarterly Declaration of Brazilian Capital Abroad (“Quarterly CBE”), for amounts of a superior threshold [2].

The submission of the Annual CBE for 2019 shall be performed through a specific website of BACEN starting from February 15 until 6PM of April 5, 2020.

 We highlight that the failure to submit the CBE or the Periodic Information of Foreign Capital in Brazil, its late submission or the presentation of inaccurate information and/or without support documentation may result in the imposition of a fine of up to BRL 250,000.00 (two hundred and fifty thousand Brazilian reais),.

For further information about the contents of this alert, please contact:

Tomás Neiva
tomas.neiva@nbfa.com.br
(11) 3707-8370

Marcela Figueiró
marcela.figueiro@nbfa.com.br
(11) 3707-8370

Brunno Morette
brunno.morette@nbfa.com.br
(11) 3707-8370

[1] It is considered to be as a “large size entity”, for the purposes of this Law, the company or group of companies under the same control that had, on the previous fiscal year, total assets greater than BRL 240,000,000.00 (two hundred and forty million Brazilian reais) or an annual gross income greater than BRL 300,000,000.00 (three hundred million Brazilian reais).
[2] Individuals or legal entities resident, domiciled or headquartered in Brazil, with assets and rights detained against non-residents, including real estate, deposits, funds in foreign currency, among other assets, whose values in aggregated  totalize an amount equal to or greater than US$ 100,000,000.00 (one hundred million American dollars) or its equivalent in other currencies, shall present the Quarterly Declaration of Brazilian Capital Abroad (“CBE”) regarding the base dates of 03/31/2020, 06/30/2020 and 09/30/2020.

 

This memorandum has been prepared solely for the clients of this firm and aims at informing major changes and news of interest in the legal field. In the event of doubts, the lawyers will be at your complete disposal for further clarification..
The information included in this Newsletter is intended to provide the clients of our firm with general updates and does not constitute a legal opinion or professional advice in relation to any specific matter, present or future that our firm is or might be currently involved with. The English version of this Newsletter is a free translation from Portuguese.
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