To regulate the application of Executive Order No. 892/19 (MP 892), which amended Law No. 6,404/76 (the Brazilian Corporations Law) with respect to the publication of acts and information of corporations, in September, the Brazilian Securities and Exchange Commission (CVM) and the Ministry of Economy issued new rules, respectively, on publicly and privately-held companies effective beginning in October.

Not yet converted into law, MP 892 determined that publications previously made in the Official Gazette and widely circulated newspapers should be made on the websites of CVM and the market managing entity where the company's securities are admitted for trading, in addition to the company's own website, in this case referring only to publicly traded companies.

In charge of regulating the application of the new rules for these companies, the CVM issued CVM Resolution 829, of September 27, 2019, providing that all publications and relevant information required by the Brazilian Corporations Law and CVM instructions regarding public companies should be made using the Empresas.NET System and on their own website, thus doing away with the need for digital certification of the documents.

The Ministry of Economy was responsible for disciplining the matter in relation to closely-held companies. To that end, Ordinance No. 529, of September 26, 2019, provides that the publication of acts of privately-held companies and the disclosure of their information (...) must be done in the Balance Sheet Center (CB) of the Public Digital Bookkeeping System (SPED), in addition to the companies’ own websites. Digital certification of the authenticity of documents kept on the website is required by a certifying authority accredited by the Brazilian Public Keys Infrastructure (Infraestrutura de Chaves Públicas Brasileira in Portuguese, or ICPBrasil).

Both Ordinance No. 529 and CVM Resolution No. 829 enter into effect on October 14, 2019. Thus, since then, publicly-traded and privately-held companies have been authorized to publish their acts only on the CVM's Empresas.NET System, or the SPED's CB, respectively, as well as on their own websites.

An issue that still hovers over the topic concerns the scope of the effects of MP 892 and Ordinance No. 529 in relation to limited liability companies (including those considered large). Although both rules generally refer to privately-held companies as well, the fact is that there was only an express amendment to article 289 of the Brazilian Corporations Law, without any mention of the provisions of the Civil Code dealing with publications. It seems that the spirit of the rule is to foster economic activity as a whole, reducing costs and red tape, regardless of the corporate form adopted. However, to date, the Brazilian Department of Business Registration and Integration (DREI) of the Ministry of Economy has only issued guidance to boards of trade regarding publications by corporations.

The topic is controversial and will probably still be subject to debate. The Federal Supreme Court (STF) is currently processing Direct Suit of Unconstitutionality No. 6,215 (ADI), for which Justice Marco Aurélio Mello will provide the written opinion. Filed by the Rede Sustentabilidade [“Sustainable Network”] Party, the ADI disputes the validity of MP 892. The Supreme Court has not yet ruled on the matter.

On September 20 of this year, MP 892 was slated to be processed on an urgent basis in the Legislature and, if not reviewed or converted into law by December 3, 2019, will lose its effectiveness. It will then be up to the Brazilian Congress to discipline, via legislative decree, the legal relations arising from it.

Registration of branches in states other than that of the headquarters

On August 6 of this year, DREI issued Normative Instruction No. 66, which deals with the approval, by boards of trade of the headquarters of a company, of acts related to the opening, alteration, transfer, and extinguishment of a branch in another state of the federation.

Instead of going through various states, the company may adopt a very simplified process that allows for a sole filing with the board of trade of the locality of the company's headquarters. The systems required to perform this procedure are still being adjusted in some regions.

Until the consultations regarding feasibility from the boards of trade and city governments are also integrated, it will be necessary to conduct the study initially in the locality of the branch. Once the feasibility study is approved, the corporate act may be filed with the registry of the headquarters. Thus, it will be up incumbent on the board of trade where the headquarters is registered, after granting the act, to electronically forward the information relating to the branch office to the body of the other state, which, in turn, must receive and store it.

The change of corporate name filed at the headquarters will be automatically extended to the branches, provided that the feasibility studies are presented completed together.

In practice, so far, there are states where recording already produces effects in relation to state registrations, and others where this is not the case. As for city registries, the systems are not yet interconnected, and registrations and updates must be done independently.