Corporate restructurings have become increasingly common in the Brazilian business landscape, driven by the need to adapt to a dynamic and competitive economic environment. In this context, the assignment of preemptive rights, safeguarded by the Brazilian Corporations Law, emerges as a valuable strategic tool for shareholders and companies.

Preemptive Rights and Assignment

The preemptive right is an essential right of shareholders guaranteed by the Brazilian Corporations Law. This right ensures that shareholders have the opportunity to subscribe to new shares issued by the company in the event of a capital increase, in proportion to the number of shares they hold. The purpose of this prerogative is to protect shareholders’ proportional participation and prevent the dilution of their shares.

However, paragraph 6 of Article 171 of the Brazilian Corporations Law provides shareholders with strategic flexibility by allowing them to assign their preemptive rights to third parties. This assignment can occur either with or without compensation, enabling shareholders to transfer their preemptive rights to other shareholders or non-shareholders.

As highlighted by jurists, preemptive rights are incorporated into the shareholder’s assets at the moment the general meeting deliberates on the capital increase. From that moment on, shareholders are fully free to negotiate their rights within the time frame established by the company’s bylaws or the general meeting, which cannot be less than 30 days.

Assignment of Preemptive Rights in Corporate Transactions

The assignment of preemptive rights can play a central role in corporate restructuring, especially in mergers, acquisitions, or capital increases with the admission of new investors.

This assignment can facilitate the admission of strategic new investors into the company’s capital, promoting a realignment of interests and contributing to the reorganization of the corporate structure. This can be particularly useful in situations where companies seek to attract shareholders who bring not only financial resources but also expertise and synergies for business development.

Shareholder Protection and Respect for the Principle of Equality

It is important to emphasize that the assignment of preemptive rights can only occur after the capital increase is approved by the general meeting. This ensures that the principle of equality is preserved, guaranteeing that all shareholders will have the opportunity to participate in the decision and exercise their preemptive rights on equal terms.

Therefore, the assignment of preemptive rights after the approval of the capital increase by the general meeting is the mechanism that balances the interests of all parties involved, ensuring transparency and fairness in the process.

Final Considerations

The assignment of preemptive rights emerges as a versatile tool in corporate restructuring, allowing shareholders greater flexibility while also offering the company an opportunity to attract new investors. When used effectively, this strategy can create new opportunities for all those involved and contribute to more efficient, adaptable corporate management aligned with the strategic interests of shareholders and companies.

Authors:

Camila de Godoy Ferreira

Carolina Bueno de Oliveira Zogaeb

Tainara Morata Sanzovo

Jéssica Nader