With the entry into force of Article 1 of Law 13.818/19 on January 1^st of this year, publications ordered by Law 6.404/76 (Brazilian Corporate Law) have gained new rules. The changes altered the Article 289 of the Brazilian Corporate Law and created a simpler and more flexible procedure, which meets the companies’ expectation for a modernized and less costly advertising regime, at least partially. To these changes, are added the recent amendments to the Brazilian Corporate Law promoted in 2021 by the Supplementary Law 182/21 (“Startups’ Legal Landmark”).

The most relevant change was to end the obligation of companies to carry out these publications in the official press vehicles of the Union, the states, or the Federal District. Pursuant to the new wording of Article 289, publications "shall be made summary form in a newspaper of general circulation edited^[1] in the place where the company's headquarters is located, and with simultaneous disclosure of the full content of the document on the page of the same newspaper on the Internet, which must provide digital certification of the authenticity of the documents kept on its page, issued by a certifying authority accredited under the Brazilian Public Keys Infrastructure (ICP-Brazil)".

The new wording applies to mandatory publications made from January 1^st, 2022, regardless of the period (fiscal year or quarter) to which they are referred. It covers, for example, the financial statements for the period ended December 31, 2021.

In relation to legal publications involving financial statements, Article 289 states that "the publication shall contain at least in comparison with the data of the previous fiscal year, information or overall values relating to each group and its classification of accounts or records, as well as extracts of the relevant information contemplated in the explanatory notes and opinions of the independent auditors and the supervisory board, if there is."

This became the general rule for the legal publications of publicly-held or closed companies, with certain exceptions related to the size of the company.

The Brazilian Securities Commission (CVM) issued its 39^th Guidance Opinion on December 20, 2021, in order to give further evidence to the publication requisites to be observed by the companies in the publications of the summarized financial statements. The document explains the procedures for the summary content of financial information, explanatory notes, reports by the independent auditors and the fiscal council – if in operation – for the disclosure of essential information. The summarized financial statements should be preceded by the following featured notices, in order to avoid doubts from readers:

• "The financial statements presented below are summarized financial statements and should not be considered in isolation for decision making. Understanding the financial and equity situation of the company requires reading the complete audited financial statements, prepared in accordance with corporate law and applicable accounting regulations"; and

• "The full audited financial statements, including the respective independent auditor's report, are available at the following electronic addresses:

1.  [insert the electronic address of the newspaper of general circulation in which the publication was made];
2.  [insert the company's electronic address, if Company registered in Category A];
3.  [insert CVM's electronic address]; and
4.  [insert B3's electronic address in the case of listed companies]".

As for other acts, however, such as the minutes of general meetings, there is no legal or regulatory provision regarding the acceptable level of information synthesis. The practice shall dictate certain reasonable standards, and it is up to each company to carefully assess the criteria it will adopt in its publications, including cases where the summary publication may, if necessary, not be justified.

Although there is not, in the current normative framework, a provision on the minimum content to be considered for the summary publication of the other documents listed in the Brazilian Corporate Law, this act should be understood as part of the set of information provided by the issuer to the market, which implies compliance with Articles 14 and 15 of CVM’s Instruction 480/09. Therefore, the document published in a summary form should include:

• the observation that this is summarized information and should not be considered in isolation for decision-making; and

• the electronic addresses of the newspaper of general circulation, CVM and B3 (in the case of listed company) where the full document is published.

Publications shall always be made in the same newspaper, chosen at a board of directors’ meeting. Any change shall be preceded by notice to shareholders in the statement of the minutes of the ordinary general meeting (AGO), pursuant to Article 289, third paragraph of the Brazilian Corporate Law.

It is assumed that the wording of Article 289, third paragraph of the Brazilian Corporate Law encompasses any change brought about by the company. Considering that not publishing in the official press vehicles is a change in disclosure, the Superintendence of Business Relations (SEP) understands that it is sufficient for the company to update the registration form, in item "Disclosure Channels", and provide a notice to shareholders clarifying the change, motivated by the amend to the legislation. We emphasize that, if the company's articles of association contain specific rules for legal publications (in other words, indicates that publications will be carried out in the official press), it will also be necessary to amend the articles of association in order to adapt it to the new Brazilian Corporate Law rules.

The Articles 294, 294-A and 294-B of the Brazilian Corporate Law – as the wording given by Startups’ Legal Landmark – establish certain special regimes for closed and publicly traded companies depending on the amount equivalent to their revenues, as an exception to the new general rule provided for in Article 289 of the Brazilian Corporate Law.

Pursuant to the Article 294 of the Brazilian Corporate Law, closed companies with annual gross revenues of up to R$ 78 million are exempt from publishing in a printed newspaper, and can publish them exclusively electronically. Ordinance 12.071/21 of the Ministry of Economy, in turn, established that this disclosure should be made both on the company's own website and in the Balance Sheet Center of the Public System of Digital Bookkeeping (“SPED”). The net worth and the number of shareholders of the company, previously provided for in the amended article, are no longer criteria for the exemption from publication.

The Normative Ruling of DREI/ME 112 (IN DREI 112), of January 20, 2022, has altered the Normative Ruling of DREI 81 (IN DREI 81), of June 10, 2020, which provides for the general standards and guidelines of the Public Registry of Companies. The objective is to adapt IN DREI 81 to the new rules on publications ordered by the Brazilian Corporate Law. The Companies Registration Manual, which corresponds to the Annex V of IN DREI 81, has been already changed, especially in items 17 and 17.1, Section I, Chapter II, which specifically deals with publications ordered by the Brazilian Corporate Law and publications of closed companies with annual gross revenue of up to R$ 78 million, respectively.

The new wording given by IN DREI 112 reinforces that companies must carry out their publications exclusively in a newspaper of general circulation (printed and digital), edited in the place where its headquarters is located, and clarifies that it is not up to the local Board of Trade to analyze the merit of publications held in summary form in the printed newspaper,  except in the case of the financial statements in summary form, which shall contain the minimum provided for in Article 289, item II of the Brazilian Corporate Law.

For registration purposes, IN DREI 112 also clarifies that compliance with the requirement regarding the annual gross revenue must be measured upon presentation of a statement by the company. The SPED will allow the issuance of documents proving the authenticity, inalterability and date of publication of the acts. Furthermore, according to IN DREI 112, the specific provisions on electronic publications do not apply to the controller of a group of companies or affiliated thereto, referred to in Article 265 of the Brazilian Corporate Law.

Smaller publicly-held companies, that is, those with annual gross revenues of less than BRL 500 million, may also be exempted from the formalities provided for in Article 289 of the Brazilian Corporate Law regarding publications ordered by law – but this will depend on specific regulation of CVM, as established in Article 294-A, item IV, of the Brazilian Corporate Law.

To summarize the rules applicable to legal publications provided in the Brazilian Corporate Law, as introduced by the Startups’ Legal Landmark and Law 13.818/19, we present the following resume:

We also point out that the provisions of the Brazilian Civil Code on publications of simple and limited-liability companies have not been changed – in the few cases where they are required, such as capital reductions, mergers and incorporations. In principle, those companies remain obliged to use the official press vehicles in such cases, which creates a clear legislative imbalance. Micro and small-sized legal entities, on the other hand, remain exempt from the publication of any corporate act, pursuant to Supplementary Law 123/06.

The new publication rules introduced by Law 13.818/19 have caused doubts to companies about the possibility of publishing their financial statements in full content in the newspaper. It is also unclear whether this would disown the company from publishing it in newspaper's website. In other words, would it be possible for companies to choose publishing the full content of financial statements in the printed newspaper? And if so, would they be exempted from publishing on the newspaper's website?

The new wording of Article 289 of the Brazilian Corporate Law contains divergent interpretations on this issue. From a perspective, it would be possible to interpret that companies must carry out the publications of their financial statements in a newspaper of general circulation in a summarized way, with simultaneous disclosure of the full content on the website of the same newspaper; alternatively, it can be interpreted that the publication in a printed newspaper, in a summarized way, is optional. In this case, companies that chose to publish financial statements the full content on printed newspaper would be free to make any disclosure on the newspaper's website, either in full or in summarized form.

Although CVM’s 39^th Guidance Opinion treats the changes introduced by Law 13.818/19 to the Brazilian Corporate Law as a possibility that allows companies to carry out publications in the printed newspaper in a summarized way, conservatively, and until there is a definitive position of CVM on this regard, we understand that the companies should carry out their legal publications in a summarized way in newspapers of general circulation, with the simultaneous disclosure of the full content on the  same newspaper’s website.

Even if, unfortunately, the changes in the Brazilian Corporate Law were not broader, they represented an important advance in terms of cost reduction and simplification of the bureaucratic procedures of legal publications, and contributed to simplify the scenario of the information regime of Brazilian companies. We hope that, in the future, legal publications will be carried out exclusively through digital means, as a definitive step of modernization and cost reduction for companies, without prejudice to the wide access to this information which are indispensable to the market.

^[1] We understand that, if the newspaper of general circulation chosen is not effectively edited in the locality of the company's headquarters, this fact should not, in any way, prevent the registration of publications by the local Boards of Trade, whenever and when the newspaper meets the distributive criterion, according to the guidance given to the local Boards of Trade in Circular Letter SEI No. 3153, of the National Department of Business Registration and Integration, of November 23, 2020.