Changes in the Corporations Law PLURAL VOTE

In August this year, Law 14,195/2021 was sanctioned, which stems from Provisional Measure n. 1,040 - also known as the MP for the Improvement of the Business Environment, and sought to facilitate some processes for companies to open and operate in Brazil.

With its sanction, we saw the alteration of the Corporations Law (Law No. 6404) in several aspects, and especially in this newsletter, we will deal with the adoption of plurality voting.

Plural voting means that each common share in a corporation may be entitled to more than one (1) vote. Before this law, each share was only entitled to one vote, and in short, the right to vote was linked to the investment: the higher the investment, the more votes.

The adoption of plurality voting, then, means a change in the proportionality of the shareholders' investment and voting power. When the company goes public, the founding partners may remain with the deliberative control of the company, if they so wish, even if they eventually hold a lower percentage of the capital.

For the adoption of plurality voting, the company must be aware of the requirements also brought with the novelty, among which we can mention Quorum for its approval, prohibition of use in meetings that resolve on the remuneration of administrators and conclusion of transactions with related parties, or by public companies, mixed economy companies, subsidiaries and companies controlled by the public power.

Thus, it is up to the company, duly advised, of course, to study the feasibility of adopting plurality voting and what are the effects of its adoption in practice, always aiming at the safe growth of the company.

Translated with www.DeepL.com/Translator (free version)