2/25/2022
Law No. 14.195/21 brought several improvements to the Brazilian business environment, amongst which we highlight the amendments to Law No. 6.404/76 (the Brazilian Corporation Law – “LSA”), specially the one related to its Article 146, §2, allowing non-resident individuals to be appointed as officers of Brazilian corporations (“Sociedades por Ações”).
Before the publication of Law No. 14.195/21, only individuals resident in Brazil were allowed to be appointed as officers of Brazilian companies.
Nevertheless, the appointment of a non-resident officer is subject to the execution of a power-of-attorney (“PoA”) granting powers to an individual resident in Brazil. The PoA must contain: (i) powers to receive summons; and (ii) a validity term of at least 03 (three) years as of the date of termination of the officer’s mandate.
As the amendments introduced by Law No. 14.195/21 refer only to Sociedades por Ações, the following issue has arisen: is it possible to appoint non-resident individuals as officers of Brazilian limited liability companies (“Sociedades Limitadas”)?
Our conclusion is that, if the relevant Articles of Association expressly provides for the enforceability of the LSA, and, in addition, the requirements regarding the PoA are fulfilled, it shall be possible for such a Sociedade Limitada to have non-resident individuals duly elected as officers.
Due to the instability of the Brazilian economy, an ongoing emigration process of high net worth individuals and their families, has been observed during the last decade.
Thus, the recently approved prerogative that enables non-resident individuals to be appointed as officers of Brazilian companies, reveals itself useful not only to individuals living in Brazil who intend to move abroad, but are officers of Brazilian companies and do not wish to leave the company management, but also to those who are resident abroad and wish to diversify their investments, upon incorporation and management of a company in Brazil.
Co-authors: Isabela Alves de Sá and Marcelo Trussardi Paolini
