Brazilian Law, pursuant to article 132 of Law n. 6,404 of December 15, 1976 (Corporations Law) and to article 1,078 of Law n. 10,406 of January 10, 2002 (Brazilian Civil Code) sets forth the obligations of the shareholders/quotaholders of a company to review and approve the annual accounts of the managers and the annual financial statements of the company.

Approval shall take place within four months following the end of the fiscal year, by means of an annual shareholders or quotaholders meeting. Considering that 2017 fiscal year of most of Brazilian companies ended on December 31, 2017, the annual meeting shall take place until April 30, 2018.

In addition to the approval, at the annual meeting the shareholders or quotaholders shall decide on the destination of the annual net profits, the payment of dividends, and, as the case may be, the election of the officers and members of the board of directors of the company (along with their respective compensation).

The companies must comply with certain legal requirements and requirements stated by their bylaws/articles of association in connection with the annual meeting (i.e. call, installation and deliberation of the annual meeting, registry of the minutes of the annual meeting with the Commercial Registry, among others).

The lack of the annual shareholders/quotaholders’ meeting may bring liabilities for the managers and the shareholders/quotaholders, and may also affect the credibility of the company before creditors and third parties in general.

The VPBG team is available for any clarification.