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Trade Associations obliges limited companies to publish balance sheets

The trade associations of some states have begun to require the publication of the financial statements of Limited companies, with the creation of the Law 11,638 / 2007, which amended and repealed some provisions of the Law 6,404 / 1976 and has extended to the companies - considered "large" - the provisions on the preparation and dissemination of financial statements. In its Article number 3, single paragraph, the law considers large the company or group of companies under the common control, that have, in the previous fiscal year, the total assets of more than R$ 240 million or annual gross revenues in excess of R$ 300 million.

Even after the creation of the law, these large companies have continued without publishing their balance sheets due to the lack of interest in disclosing their numbers and because they have no body charging this publication. In 2010, the former National Department of Trade Registration (DNRC), now replaced by the Business Registration and Integration Department (DREI), which is the governing body in a technical way the Boards of Trade, issued a technical guidance through  the Circular Letter 064 / 2010 / SCS / DNRC / GAB of April 13th 2010, towards the requirement of compliance with the Law 6,404 / 1976, as amended by the Law 11,638 / 2007, concerning the obligation to publish the financial statements of  the large limited liability companies.

Thus, in the same year, 2010, the Trade Association of Minas Gerais (JUCEMG) created the Instruction Service IS/03/2010; this statement states in its Article 3: a large limited partnership that requires minutes of recording assembly or meeting of members, containing decision about taking account of management and on the balance sheet and the economic result should join the leaves the newspaper containing the publication of its balance sheet and financial statements relating to the object of the resolution, or include in the minutes, the names, their dates and leaves, newspapers where the cited publications were made.

For the company be exempted from publication, it needs to file a statement signed by one of its officers or legal representative with specific powers for the signing of this declaration, making that way the administrator and the company responsible for the veracity of the facts stated therein. In 2011, the Trade Association of Rio de Janeiro (JUCERJA) issued the Statement number 39 that states in its 2nd paragraph: the meeting of the large Limited companies’ shareholders which approves the financial statements should come to registration accompanied by the previous evidence of publication of them.

Now, in 2015, the Trade Association of the State of São Paulo (Jucesp) created the Resolution number 02/15 which states in its Article 1, “the entrepreneurial companies and cooperatives which are considered large, pursuant to Law number 11,638 / 2007, shall publish the Annual Balance and the Financial Statements for the previous year, in a widely circulated newspaper in the place of the company's headquarters and in the Official Gazette of the State; and Article 2: the presentation of the publication above will be dismissed when the society requires the filing of the Balance Sheet approval of minutes Annual and Financial Statements, accompanied by the "statement" that it is not a large company pursuant to Law number 11,638 / 2007, signed by the administrator, in conjunction with the accounting officer duly authorized.

It is worth mentioning that the company that does not meet this requirement will not register in the commercial association, the minutes of approval of the financial statements for the last financial year, and without that record, the companies could have operational and financial difficulties. This measure will impact many national and multinational companies that previously hid their numbers, thus making unfair competition to its competitors who divulged their balance sheets. I consider this commendable effort of the Trade Boards to increase the transparency of companies towards society, especially at such a troubled facing our country and that in spite of so many scandals, agencies and regulators want to reduce even more this transparency.

Such as, SUSEP, which no longer requires the publication of half-year results of the insurers; CVM, which no longer requires almost any publication; and the Central Bank, which no longer requires the publication of investment funds. Not to mention the provisional measure, MP number 651, which relieved some listed companies to publish their balance sheets and in the various projects of laws that pass in Brasilia that want to end the legal advertising, which is the basic instrument of transparency of public and private entities in their benefits account with the company.

The legal advertising, besides the high transparency also contributes with the society in various ways, such as funding a free press, helping the official presses, which in addition to printing the official journals, use these resources for social work, they cite as an example, the project “Mais Leitura” which encourages the reading, from the Press Officer of the State of Rio de Janeiro, which, through the initiative of President Haroldo Zager, sold in 2014 at popular prices nearly 1 million books to low-income people by providing access to information and learning for the needy population. We also have the EBC, which uses the legal advertising revenue to finance radio and TV stations. The end of the legal advertising also increases corruption in non-profit organizations and trade unions.

The initiative of the Trade Boards should not be seen merely as a bureaucratic act but as a defense of society. It would be great if those commercial registries that do not yet meet this requirement followed the example of Minas Gerais, Rio de Janeiro and Sao Paulo.

Text: Mark Light
Source: Monitor Digital
Version: Grazielle Segeti



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