New normative instructions for boards of trade and the “EIRELI”

NEW NORMATIVE INSTRUCTIONS FOR BOARDS OF TRADE AND THE “EIRELI”

The Corporate Registration and Integration Department (the “DREI”), the body in charge of standardizing and supervising the activities of the Boards of Commerce throughout the country, has issued new normative instructions to review and simplify the settlements and procedures of the Brazilian Boards of Trade. Of the set of the edited Normative Instructions, stand out the 34 and 35, published on March 2, 2017, and the no. 38, edited on March 6, 2017.

The normative Instruction 34 regulates practices related to companies with foreigners (individuals or legal entities) in their corporate structures, since it only requires that the power of attorney granted by the foreign partner to be filed in a separate act. Notwithstanding this amendment, the law established a new obligation, through its Article 2, which compels the foreign partner to grant to its legal representative in the country specific power of attorney with an indefinite term to receive court summons.

Also, the foreign partner must prove, by documents as requested by each foreign jurisdiction, the attendance of legal requirements of validity and existence imposed in their country of origin.

Among the changes settled, the most prominent in the national legal scenario, is the permission for legal entities, domestic or foreign, to hold an Individual Limited Liability Company (the “EIRELI”). This amendment brings legal certainty to this institute since there was a great doctrinal and jurisprudential discussion regarding such possibility and by the legislative omission. This question was eliminated with the update of the EIRELI Registration Manual, through the Normative Instruction 38.

The other changes are limited to the operational scope, regarding to the filing procedure itself, as well as normalizing situations that already exist in practice, such as: (i) the possibility of the Limited Company to keep its shares in treasury, as well as the adoption of any other institutes provided by Law 6,404 / 76 (Brazilian Corporation Law) as well as the supplementary application to the Limited Companies, including the establishment of preferential quotas; (Ii) the presumption of onerousness in the transfer of quotas in the Limited Companies, being necessary the express mention of this not to be charged; (Iii) the waiver of proof of tax collection, such as, for example, the collection of the tax on causa mortis transmission and donation of any property or right.

And (iv) the possibility of prediction of several amendments with the deliberation of the change of the legal nature of the company.

Finally, the Normative Instructions will enter into force on May 2, 2017, and shall be mandatory for all Brazilian Boards of Trades.t