Promulgated on September 22, Law 14,451/22 (a result of Bill 1,212/22) amends the Civil Code to reduce certain quorums for resolution on matters for limited liability companies as follows:

• Appointment of non-partner officers: previously, the quorum for resolutions was unanimity of the partners as long as the capital was not paid up. After full payment, the quorum for approval was at least 2/3. With the new law, the quorum becomes 2/3 of the partners, while the capital is not paid-in, and of partners holding more than half of the capital, after the payment is made.

• Modification of the articles of association, merger, and dissolution of the company or termination of liquidation: a quorum which used to be 3/4 of the capital stock is now more than half (absolute majority of the capital stock).

Regarding the appointment of non-partner officers, the reduction in quorum occurred both for the paid-in capital and the pending paid-in scenario. In the second case, the reduction was greater to give more protection to partners, since, pending payment, all partners are jointly and severally liable for the capital to be paid in.

On one hand, the change certainly facilitates and optimizes decision-making, but by eliminating the need for unanimity of the partners pending payment, it ends up subjecting all of them to the risk of the new administrator's will, in a scenario of joint and several liability for the payment of the capital stock.

As for the other matters, by extinguishing the high quorum of 3/4, the change seems to be more in line with the majority principle for decision-making within companies, as provided for in article 129 of the Brazilian Corporations Law and other similar institutions, such as condominiums.

The quorum of 3/4 was maintained for calls to order of partners' meetings (article 1,074). With this, opening of the meeting requires a quorum greater than that necessary for resolution on the matters, which creates a certain incongruity.

In general, the change brings limited liability companies closer to corporations, allowing greater interference and exercise of control with a smaller stake in the capital stock.

The change requires that partners of limited liability companies pay attention to their rights and the extent of the influence they now have on corporate decisions with the new provisions. This can certainly impact on the valuation of partners' interests in the company in the event of sale or other transactions, encourage the renegotiation of articles of association and shareholders' agreements to adjust the applicable quorums to the will of the partners, and motivate litigation in the event of abuse.

The new law has 30 days to take effect from the date of its publication. By the end of October of 2022, therefore, the changes will be in full effect.