Every year, the quotaholders of limited liability companies shall hold the annual quotaholders’ meetings or assemblies to deliberate about: (i) the accounts of the officers, the balance sheet and the profit and loss statement; and (ii) if applicable, the appointment of officers or other matters that can be inserted in the agenda.

Accordingly, the companies shall take the measures to convene and carry out the meetings or assemblies, as follows.

1. Date/Time Limit. The quotaholders meetings/assemblies for the yearly approval of financial statements must occur within the 4 months following the end of the fiscal year. Therefore, the limited liability companies whose fiscal year ends on December 31 shall hold the meeting/assembly until April 30 of the following year.

2. Form of Meeting/Assembly. In-person, hybrid and digital meetings and assemblies may be held with quotaholders being able to participate and vote remotely, with due respect to the rights of the quotaholders provided by the law and further regulatory requirements, under the terms of article 1080-A of the Brazilian Civil Code.

3. Call Notice. Limited liability companies that have 10 quotaholders or less must follow the call notice rules for meetings of their articles of association, if there are provisions in that regard. On the other hand, the limited liability companies that have more than 10 quotaholders must publish the call notice of the quotaholders’ assembly at least 3 times, in accordance with article 1152, 3rd paragraph, of the Brazilian Civil Code.

The formality of the call notice by means of publication is not mandatory when all the quotaholders attend the assembly or declare in writing their awareness of its place, date, time, and agenda.

In addition, up to 30 days before the date set for the assembly, the balance sheet and the profit and loss statement must be made available to quotaholders who are not in charge of the management of the company, pursuant with article 1078, 1st paragraph, of the Brazilian Civil Code.

4. Effects. Except for error, willful misconduct or simulation, the approval of the financial statements without reservations releases the officers and, if it exists, the members of the supervisory board from liabilities.

Although there is no express legal provision imposing penalties for the failure to perform the approval of the financial statements and the accounts of the officers, the limited liability company that fails to perform it may be impeded or have difficulties to develop certain activities, such as the obtaining of financing or credit lines, among others.

Araújo e Policastro remains at your disposal for any necessary clarification and to assist you in connection with the measures required to hold annual quotaholders’ meetings or assemblies of 2023.