Investor Presentaiton
CORPORATE LAW
BY PAULO SALVADOR RIBEIRO PERROTTI AND FERNANDO MAURO BARRUECO
BRAZIL - CANADA COMPARATIVE LAW
word Companhia, or abridged to Cia. The corporate name may consist
of a name (e.g. of the founder or a distinguished forbearer). The
corporate name may describe corporate aims or activity, however,
such a description is not mandatory.
There are two kinds of S/As: publicly traded companies which obtain funds
through public offerings and subscriptions and are supervised by the
Brazilian Securities Commission (CVM); and a closed capital companies
which obtain the shareholders own capital or that of subscribers, in which
case the accounting and administration is simpler.
Capital stock is represented by securities known as shares. Depending
on the nature of the rights or advantages that these conferred upon
their holders, shares may be common, preferred or fruition shares.
Aside from essential rights, common shares confer upon their bearers
voting rights; whereas preferential shares, though they entitle their
bearer to special rights, may grant or suppress voting rights. Fruition
shares confer the bearer the right to continue participating in the
corporate profits of ordinary or preferential shares, even upon their
amortization, without reduction in capital.
By means of a Shareholder's Agreement, the shareholders may
decide issues relating to purchase and sale of their shares, establish
preferential acquisition rights, or exercise voting rights. All obligations
set forth in Shareholders Agreement are binding, and must be
respected by the Company.
A S/A may be managed by its Board of Directors and Administrative
Council, or exclusively by a Board of Directors, as determined in Law
or in its Bylaws.
An Administrative Council is a collegiate decision-making body. Such
councils are optional for closed-capital corporations, and mandatory
for open-capital or authorized-capital corporations. The Administrative
Council must be comprised of at least three members, who must be
individual shareholders, resident or nonresident in Brazil.
The Board of Directors is the executive body of a S/A. It is responsible
for representing the company and ensuring its regular operation. The
Board is composed of no less than two directors, that may or may not
be shareholders, who must be individuals residing in Brazil, elected for
a maximum term of three years.
The shareholders may supervise corporate management by means
of the Fiscal Council. The principal purpose of the Fiscal Council is to
oversee the company's accounts and management. Such supervision
may be permanent or periodic.
Installation of a Fiscal Council reflects the desire of the shareholders to
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