Keep Your Company in Good Standing

In Brazil, maintaining a company in good standing is a team sport. Managers take care of the day-to-day activities of the business while accountants deal with the bookkeeping and taxes. But there are ongoing legal obligations too.

Both Brazilian limited liability companies (Ltda.) and corporations (S/A) must hold a meeting of the “partners” each year by the end of April. After each meeting, the company’s lawyer should prepare resolutions to be filed with the state trade board.

In the annual meeting, members of a Ltda. approve the most recent financials, appoint the administrator, and discuss other topics they deem relevant. For example, they can take the opportunity to renew any powers of attorney that have expired.

At an S/A annual meeting, the scope of what can be resolved is more limited. Like in a Ltda., shareholders of an S/A approve the company’s financials. They also appoint directors and decide what to do with the company’s profits. All other topics, however, must be addressed at a duly called special meeting.

Annual meetings of the owners are key to good corporate governance and can help serve to protect both administrators and owners from civil liability by ensuring the company is in good order. They offer an opportunity to review the books and records of the business as well as the company’s operations generally.

Just remember that it can’t be done alone. Having the right mix of business, accounting, and legal advisors involved is key to making sure that your Brazilian company runs smoothly.