BRAZIL Law and Practice Contributed by: Ricardo Barretto Ferreira da Silva and Camila Sabino Del Sasso, Azevedo Sette Advogados
The incorporation/formation process usually may take 15 to 45 days, starting from the moment the powers of attorney are duly notarised and legal - ised and the final version of the AoA is approved. The whole process includes registering with the public authorities, issuing the necessary tax forms, opening the appropriate accounting books, and other actions aimed at making the company fully operational. 3.3 Ongoing Reporting and Disclosure Obligations In Brazil, private companies are subject to sev - eral reporting and disclosure obligations. Changes in management, such as the appoint - ment or dismissal of directors, must be report - ed by companies to the Commercial Registry of the state in which the company’s head office is located. Any changes to the AoA – including changes to the corporate purpose, address, capital, company name – must also be regis - tered with the relevant Commercial Registry in order to have legal effect. The preparation of annual financial statements is also required and its approval must be done in the minutes of the annual shareholders’ meet - ing, which needs to be held within four months from the end of the fiscal year and filed with the Commercial Registry. For corporations and large-sized limited liability companies (defined as those with annual gross revenue exceeding BRL300 million or assets exceeding BRL240 mil - lion), the financials must be approved and also filed with the Commercial Registry. In addition, companies with foreign members must register their UBO with the Brazilian Fed - eral Revenue Service within 90 days after obtain - ing the CNPJ number. Any updates to the UBO must also be reported immediately and the fail -
ure to do so can lead to suspension of the CNPJ number. Other obligations include the registration of for - eign investments with the Central Bank of Brazil, the maintenance of corporate books, and the registration of legalised powers of attorney for foreign members with the Registry of Deeds and Documents. 3.4 Management Structures Under Brazilian law, only individuals may be appointed as officers/directors or members of administrative bodies of a company. In the case of corporations, management is structured into two main bodies: • a board of directors ( conselho de admin- istração ), which is mandatory for publicly held corporations and those with authorised capital; and • a board of executive officers ( diretoria ), which is mandatory for all corporations, regardless of size or capital structure. The board of directors is responsible for defin - ing the company’s strategic business guidelines, whereas the board of executive officers handles day-to-day operations and is vested with the legal authority to represent and bind the corpo - ration. The specific rules regarding representa - tion must be detailed in the corporation’s AoA. The board of directors must consist of at least three directors; the board of executive officers must have at least one officer. Notably, up to one-third of the directors of the board may also serve on the board of executive officers. Additionally, corporations may have an audit committee, which can be established perma -
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