On August 6, the Federal Government issued Provisional Measure 892/2019, which amends Brazilian Corporate Law (Lei das S.A.) to allow companies of publicly or privately-held corporations to publish their balance sheets and other mandatory documents on the websites of the Securities and Exchange Commission (CMV), that of the company itself and those of the stock exchange where they are traded.
The Law required the compulsory publication of the documents in the official journal of the Union or state and in a widely circulated newspaper published where the company headquarters is located. By “documents subject to publication” the law requires balance sheets, management’s report on the corporate business and key administrative facts, and the reports of independent auditors and the audit committee, if applicable.
According to the Provisional Measure (MP), the publications will receive digital certification of the authenticity of the documents through a certifying authority accredited by the Brazilian Public Key Infrastructure (ICPB Brasil). Electronic publications will not be charged, and it will be up to the CVM to regulate law enforcement. In the case of closely held companies (whose shares are not traded on the stock exchange), the form of publication and publication of the acts will be regulated by the Ministry of Economy.
According to Raphael Zaroni, partner of Zaroni Advogados, if the measure becomes law, its result will be felt not only by multinational companies that are usually required to publish pages and pages of acts and balance sheets, with exorbitant costs, but also by small and medium-sized companies that have the obligation to publish their corporate acts, but sometimes fail to comply with the obligation due to the high costs, and under the new measure they will be able to “update” their publications at “zero” cost.
The MP must be analyzed in Congress by a mixed committee and by the Plenary Bodies of the House of Representatives and the Federal Senate.