According to the “Legal Framework for Startups”, sanctioned in earlier June by the President, important changes on the Brazilian Corporations Law (Law no. 6.404/76) will come into effect on September 1, 2021, which facilitates the conditions for small and medium-sized companies to enter the capital markets.
Those changes present a new corporate regime, that is being called as “Simplified Corporation” (or “SAS”), in which companies which annual gross revenue is less than BRL 78,000,000.00 (seventy-eight million of real) can be part.
Among the innovations brought by the Legal Framework, regarding the operation of the SAS, we highlight:
- publications, required by law, could be made rather than in newspapers;
- accounting books and other corporate documents, can be mechanized or made electronic, rather than paper ones;
- the Board can be composed by only one director;
- the dividends may be distributed freely, by decision of the general assembly, as long as the preferred shareholders’ rights to receive the fixed or minimum dividends be observed.
Therefore, closed or listed corporations and startups, will be able to simplify their corporate regime and adjust their structure to the new terms brought by the Legal Framework.
The SAS will be subject to regulation by the Brazilian Securities Commission (“CVM”), but there is no doubt that the innovation brought by the Legal Framework will facilitate the raising of founds by small and medium corporations, through the offering of their shares and/or debt securities in the capital market.
Our team remains at your entire disposal to provide you with any clarification you may deem necessary and to assist you in this matter.