The possibility of general meetings being held partially or totally in digital form has been gradually introduced, over the years, to Brazilian laws and regulations, as well as to companies’ bylaws.
These alternatives to in-person meetings were frequently treated as exceptional or optional, and included merely for the convenience of participants. The COVID-19 pandemic, however, has accelerated the process and caused lawmakers and regulatory agencies to implement broader rules and guidelines for digital meetings.
The Brazilian Securities Commission (Comissão de Valores Mobiliários – CVM) has updated or issued several rules in 2020, concerning different types of investment funds.
Since 2014, funds regulated by the CVM are entitled to holding digital meetings if their internal rules so permit (as per article 72 of CVM’s Instruction no. 555). But as a result of the pandemic, the analysts at CVM first issued a newsletter (Ofício-Circular nº 6/2020/CVM/SIN) favorable to the cancellation or delay of meetings that could not be held electronically. Additionally, several deadlines applicable to funds were extended (under CVM’s Deliberation no. 848). Finally, Deliberation no. 849 authorized every investment fund under CVM’s regulations to hold general meetings virtually, regardless of statutory permission, during fiscal year 2020.
Although limited to 2020, that authorization should be renewed at least for as long as the pandemic lasts, and it is expected to become the rule afterwards. CVM itself has already regulated the remote participation and voting in meetings of listed companies (as per Instruction no. 481, upon an amendment in 2015). Now in 2020, CVM’s Instruction no. 625 has done the same for holders of debentures from listed companies, as well as to holders of real estate or agribusiness receivables and commercial promissory notes that are offered publicly or traded in the securities market.
The introduction of virtual meetings for listed companies is based on a change to the law governing corporations (Law no. 6404/76), which also covers closely-held companies. Similarly, the Brazilian Civil Code was amended in 2020 to specifically mention the possibility of digital meetings in limited liability companies, leading to the release by the department of commercial registry of an instruction (Instrução Normativa DREI nº 79) containing detailed guidelines on how such meetings must occur.
This article is meant to be informative in nature and should not be used as a legal opinion. Our attorneys can provide assistance should you need advice in any such matters.
Orlando Parente da Camara Filho foi graduado na Universidade Federal do Amazonas, em 2002. Pós-graduado em Direito Contratual e Empresarial pela Pontifícia Universidade Católica de São Paulo (PUC/SP), membro da Ordem dos Advogados do Brasil (OAB), Secção de São Paulo, desde 2004 e da American Bar Association.