Normative Instruction No. 1/2024 of the National Department of Business Registration and Integration (DREI) brought some important changes for companies.
Previously, we addressed the issue by focusing on the changes applicable to the public registration of companies in Brazil, which you can check out by clicking here. However, this article will focus on the changes brought in for limited companies.
In addition to improving the rules for the use of visual law techniques, allowing the use of artificial intelligence tools to analyze documents submitted to the Board of Trade and requiring the presentation of a declaration of authenticity for documents signed electronically, we can include the following topics in the list of topics that have undergone significant changes:
Board of Directors
IN 1/2024 provides for the possibility of the members of the board of directors of a limited liability company being elected by the Board of Directors, when installed. Until then, the establishment of the Board of Directors was provided for by the DREI, but it did not regulate the selection of the board of directors.
The amendment introduced establishes: “In the event that a board of directors is provided for, by supplementary application of Law 6.404, of 1976, the administration will be divided into a Board of Directors and a Board of Executive Officers, with the partners being responsible for appointing the board and the latter for appointing the executive board. The directors may be foreigners or residents abroad, but must present a power of attorney granting specific powers to a resident in Brazil to receive judicial summons on their behalf (art. 146, § 2, of Law no. 6,404, of 1976).”
It is important to note that, although provided for in IN 1/2024, there are understandings to the effect that the Board of Directors is not compatible with the rules of limited liability companies, as provided for in the Civil Code, since in these rules, the power to elect directors rests exclusively with the shareholders, and it is not appropriate to extend this power to a Board of Directors.
Publication of financial statements
Special Appeal 1.824.89 – RJ, ruled by the Superior Court of Justice in March 2023, already determined that publication of the financial statements of large limited liability companies was optional. However, this decision is now reflected in IN 1/2024, which is also mentioned in the Manual for the Registration of Limited Liability Company Acts.
Treasury shares
With regard to treasury shares, IN 1/2024 establishes that it is impossible for the company itself to issue new shares on a primary basis; only secondary purchases are permitted, i.e. shares that have already been subscribed and paid up by a shareholder, provided that there are sufficient profits or reserves.
Voting rights for shareholders with usufruct shares
IN 1/2024 also determines the need for the beneficiary partner to be summoned to attend and actively participate in a meeting or assembly of partners, even if they do not have the right to vote.
Death of the managing partner of a one-man limited company
In the event of the death of a member of a sole proprietorship limited company, the legal representative of the estate, although entrusted with the management of the deceased member’s personal assets, does not automatically assume the role of company manager.
To this end, the executor of the estate can register the legal representative or the public deed of legal representative with the Board of Trade and amend the articles of association to decide on the appointment of a new manager, who can be either the legal representative or a third party. The rule also states that it is not up to the Board of Trade to intervene in any conflicts arising from the dual role of the legal representative.
–> Read also: DREI Normative Instruction No. 1/2024: changes to the public register of companies
If you have any questions on the subject, our corporate team is at your disposal.
