Corporate governance—Brazil—Q&A guide
Corporate governance—Brazil—Q&A guide

The following Share Incentives practice note provides comprehensive and up to date legal information covering:

  • Corporate governance—Brazil—Q&A guide
  • 1. What are the primary sources of law, regulation and practice relating to corporate governance? Is it mandatory for listed companies to comply with listing rules or do they apply on a ‘comply or explain’ basis?
  • 2. What are the primary government agencies or other entities responsible for making such rules and enforcing them? Are there any well-known shareholder or business groups, or proxy advisory firms whose views are often considered?
  • 3. What powers do shareholders have to appoint or remove directors or require the board to pursue a particular course of action? What shareholder vote is required to elect or remove directors?
  • 4. What decisions must be reserved to the shareholders? What matters are required to be subject to a non-binding shareholder vote?
  • 5. To what extent are disproportionate voting rights or limits on the exercise of voting rights allowed?
  • 6. Are there any special requirements for shareholders to participate in general meetings of shareholders or to vote? Can shareholders act by written consent without a meeting? Are virtual meetings of shareholders permitted?
  • 7. Are shareholders able to require meetings of shareholders to be convened, resolutions and director nominations to be put to a shareholder vote against the wishes of the board, or the board to circulate statements by dissident shareholders?
  • 8. Do controlling shareholders owe duties to the company or to non-controlling shareholders? If so, can an enforcement action be brought against controlling shareholders for breach of these duties?
  • 9. Can shareholders ever be held responsible for the acts or omissions of the company?
  • More...

This Practice Note contains a jurisdiction-specific Q&A guide to corporate governance in Brazil published as part of the Lexology Getting the Deal Through series by Law Business Research (published: May 2020).

Authors: Loeser, Blanchet e Hadad Advogados—Richard Blanchet ; Enrique Hadad; Eduardo Urrutia Depassier

1. What are the primary sources of law, regulation and practice relating to corporate governance? Is it mandatory for listed companies to comply with listing rules or do they apply on a ‘comply or explain’ basis?

The primary sources of law are the Civil Code (Law No. 10,406/2002), the Corporations Law (Law No. 6,404/1976), the Securities Law (Law No. 6,385/1976) and the Capital Markets Law (Law No. 4,728/1965).

The Civil Code regulates a wide range of topics, such as those related to property, family and obligations. However, it also sets forth the basic corporate governance legal framework applicable to limited liability companies. Although limited liability companies are the most common type of company in Brazil, this type of company cannot go public or raise funds in the capital markets.

The Corporations Law regulates both closely held and publicly listed corporations. It regulates, in a comprehensive way, corporate governance matters that are important for corporations, including shareholder rights, board structures, duties and responsibilities of board members and officers, tag-along rights, public offerings, financial statements and shareholders agreements, among other things. The Corporations Law may also apply

Popular documents