One of our clients is a multinational company operating throughout Brazil. It was incorporated in Brazil as a joint stock company managed by a Board of Directors, a Supervisory Board and an Advisory Board.

The Bylaws were drawn up several years ago and provide for the existence of a collegiate board (made up of several members) but, in practice, some of the directors’ duties were no longer carried out. In addition, the CEO, a long-time director of the company, was moving abroad. Despite the move, he would remain on the company’s Board of Directors, but in a different position, and would therefore have his duties – which until then were not the responsibility of any other member of the Board – substantially modified.

As a result, the company should elect a new CEO and the former CEO would remain in another position.

Our client then approached us to have the company’s bylaws reformed, with the creation of a new Executive Board position, and for the attributions of each of the members of the Executive Board to be established in a clear, concise manner, with no overlap between the different positions, reflecting the needs of the current management. The reform of the Bylaws should also take into account the impact on the duties of the members of the Advisory Board, and that one of the Directors will not reside in Brazil.

The change came at a good time because, as we warned our client, it is now possible for a director of a joint stock company not to be resident in Brazil. Therefore, we also advised the company on the need to appoint a proxy for the director who has moved abroad.

We also discussed the requirements for the new Director to be appointedand, of course, to make sure that the arrangements were made in time to meet the Board change schedule.

The change was made in record time, with the approval of the director who was moving on, the new CEO and the parent company, as well as being in line with the new management model and the shareholders’ agreement and guidelines. In the course of two days, we restructured the company’s articles of incorporation, proposing its new model and wording, and sent them to its in-house legal team.

We also made the changes that were necessary for the specific case in record time, obtaining the final version of the Bylaws, with a management structure that actually represents the distribution of attributions that our client needs and actually practices.

Cases like this remind us that often the bylaws or articles of association of companies are not constantly revised, which results in a gap between the formal management structure (established in the bylaws or articles of association) and the management that is actually practiced.

In any case, the updates and adjustments that the company needs, in the overwhelming majority of cases, are not one-off: a change in a director can have a direct impact on the powers of all the other directors, and often on the rights of the shareholders or partners themselves.

When we assist our clients, we monitor these changes with our clients, so that there is no overlap or vacuum of responsibilities, so that the company can operate safely and reliably.

It will also be a pleasure to follow the development of your business! Contact us at novosnegocios@chenut.online.