Conflicts of Interests in Shareholders’ Meetings of Brazilian Corporations: the Legal Framework according to Scholars and the Case Law of the Brazilian Securities and Exchange Commission

June 2018

Abstract

The issue addressed in this paper relates to the interpretation, according to Brazilian scholars and the case law of the decision board of the Brazilian Securities and Exchange Commission, of the provisions governing conflicts of interests in shareholders’ meeting of Brazilian corporations. More specifically, this paper envisions to answer how the rules regarding conflicts of interests in shareholders’ meetings of Brazilian corporations should be interpreted and applied. To that end, we will analyse opinions of scholars in respect to the interpretation of the caput and first paragraph of article 115 of Law n. 6,404/76, as well as two cases judged by the decision board of the Brazilian Securities and Exchange Commission. After a brief introduction on the legal background in Brazil and abroad on the matter, this paper specifically analyses the interpretation of the caput and the first paragraph of article 115 of Law n. 6,404/76. Articles 116 and 117 of Law 6,404/76, which establish specific duties of the controlling shareholders and complement the legal framework regarding the conflicts of interests in Brazilian corporations, will not be analysed. Key words: Conflicts of Interests, Abuse of Voting Rights, Undue Advantages, Private Benefits, Brazilian corporations, Brazilian Securities and Exchange Commission.

Author

Juliana Bastianello Baldin Martins

Managing Director - Legal Affairs, GTIS Partners, Brazil

Juliana Bastianello Baldin Martins joined GTIS Partners on May 2011 and is currently a Managing Director at the firm. Mrs. Baldin Martins is responsible for overseeing legal activities in Brazil. Prior to joining GTIS Partners in 2011, Mrs. Baldin Martins was a lawyer at Machado, Meyer, Sendacz e Opice Advogados, one of the largest law firms in Brazil. Mrs. Baldin Martins graduated from São Paulo University Law School (USP) in 2007, completed her Master’s of Business Administration at Fundação Getulio Vargas (FGV) in 2011 and her Master’s in Corporate Law at São Paulo University Law School (USP) in 2022.

Company

GTIS Partners

With broad expertise in investing, structuring, design, development and asset management, GTIS professionals oversee projects in residential, industrial/logistics, office and hospitality from concept to completion. Today, GTIS is established as a leading investor in the US residential sector, with a portfolio footprint in more than 35 major markets located predominantly in the Sunbelt. In Brazil, GTIS is among the largest private real estate investors with significant experience in the acquisition and development of iconic office, residential, industrial and hospitality assets concentrated in São Paulo and Rio de Janeiro, the most liquid markets in Brazil. As of Q3 2023, GTIS has committed over $6 billion of equity capital or approximately $19 billion in total project cost across the US and Brazil.

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