On August 26th, was sanctioned the Business Environment Law, Law 14,195/2021, materializing the provisions of Provisional Measure 1,040/2021 authored by the Ministry of Economy, whose intention is to facilitate the opening and operation of companies in Brazil, the aforementioned law deals with, among other issues, reducing bureaucracy, protecting minority shareholders, and facilitating foreign trade.
Among the changes that come into effect with the new Law, we highlight the discontinuation of the EIRELI corporate type, as provided in art. 41, of Law No. 14,195/2021, and every Individual Limited Liability Company (“EIRELI”) currently in existence will be transformed into a Single Person Limited Company (“SLU”), since the latter corporate type, brought in by the Economic Freedom Law in 2019, has a number of advantages over the EIRELI.
The transformation of EIRELI into SLU still depends on regulation by the National Department of Business Registration and Integration (“DREI”), the body responsible for the country’s Boards of Trade.
Regarding the measures that aim to facilitate the opening of companies, the integration of the company registration systems used by the Union, Federal District, States and Municipalities, the possibility of using the CNPJ number as the company name, and the automatic issuance of licenses and operating permits for medium-risk activities stand out.
The Law of Corporations (Law 6404/76), was also subject to changes brought by the Business Environment Law, with emphasis on the institution of plural voting in publicly or closely-held corporations with a ceiling of up to ten votes per share. The new attribution removes the “one vote, one share” principle, which concentrated the control of the company’s deliberations among the majority shareholders.
For publicly traded companies, however, plurality voting must be instituted before shares are traded on organized securities markets. In addition, the criteria for the creation of common classes with plurality voting were laid out, and they are: (i) the approval in a general meeting with at least half of the total votes conferred by the voting shares; and (ii) at least half of the preferred shares without voting rights or with restricted voting rights, if issued, convened in a special meeting called and installed with the formalities in law.
It is also worth mentioning that plural voting is valid for a period of up to seven years, extendable for any period, provided that the minimum quorums for approval are observed and that the holders of shares of the class whose plural voting is to be extended are excluded from approval voting. The shareholder who does not agree with the aforementioned matter is assured the right to withdraw from the company.
Given the extensive range of changes promoted by Law 14,195/2021, it is expected to stimulate national business development and greater efficiency for Brazilian companies, as well as to bring and attract investments to the country.
Our office is at your disposal to clarify any doubts in this regard and to assist you in the preparation and registration of these documents.