What are the required corporate disclosures, and how are they communicated?
Corporations are obliged to publish the annual report, the management report, as well as the corporate governance report (obligatory for listed companies) and hand them over to the commercial register. Usually the reports are published on the company’s website. See question 28 for further reports.
The Brazilian Corporation Law has adopted the principle of full disclosure when it comes to acts or facts related to the company that may be considered relevant. The disclosure of material events is a duty of the company’s investor relations officer, who may be held personally liable for damages arising as a result of non-disclosure.
CVM Ruling No. 358/2002, which sets forth the general disclosure rules for listed companies, defines ‘material event’ broadly, as any decision arising from a controlling shareholder, a general meeting or a management body of a publicly held corporation, or any other act or event of a policy, management, technical, business, economic or financial nature in connection with its business that could considerably influence the trading price of the securities issued by or related to the company; the decision by investors to buy, sell or keep those securities; and the decision by investors to exercise any rights they have as holders of securities issued by or related to the company.
The companies listed in the Novo Mercado segment are required to disclose their material facts in Portuguese and English, concurrently.
At the end of 2009, CVM enacted CVM Rulings Nos. 480/2009 and 481/2009, modifying, respectively, the rules regarding the disclosure of information by publicly held companies and the presentation of documents and information before meetings are held. The main change in disclosure issues was the introduction of the reference form, which basically compiles corporate, contractual, financial or economic, governance, and human resources information about the company. The reference form must be updated at least once a year, or in a shorter period upon the occurrence of certain events that demand an update of the information provided in the reference form.
As to financial reporting, listed companies must disclose their financial statements, together with the management report, the independent auditors’ report and the opinion of the fiscal board, if installed, at least one month in advance of the ordinary shareholders’ meeting.*
Listed companies must also disclose the standard form of financial statements (DFP), within the first three months of the end of each fiscal year. The DFP is an electronic form created in CVM’s electronic system that must be completed using information obtained from the annual financial statement.
Listed companies shall also disclose, on a quarterly basis, the quarterly information form, which is also an electronic form, and which must be completed using the company’s quarterly financial information; it must contain the report of the special review issued by the independent auditor.
In addition to disclosing their financial statements in Portuguese, companies listed in the Level 2 listing segment must also disclose them in English.
Regarding one-on-one meetings, companies listed in the Novo Mercado must hold a public presentation on the information disclosed in their quarterly earnings results or financial statements within five business days of their release. Such public presentation may be conducted face-to-face or via teleconference, videoconference or any other means that enables stakeholders to participate remotely. On the other hand, the companies listed in the Level 2 and Level 1 listing segments are required to hold, at least once a year, a public meeting with analysts and other third parties, to disclose information about their financial and economic situation, projects and expectations.
In the event of a tender offer for the acquisition of the control of a listed company (Takeover TO), in principle, the board of directors of the listed companies is not under an obligation to make a statement as to whether or not it agrees with the terms and conditions of the Takeover TO.
If, however, the board of directors decides to make a statement on the Takeover TO, the statement must be disclosed to the market and must address such issues as: provision of information on all aspects necessary to allow an informed decision by the investor, especially with regard to the price being offered; and any material changes in the company’s financial condition since the date of the most recent financial statements or quarterly reports disclosed to the market.
In the case of companies listed on the Novo Mercado and Level 2 listing segments, the board of directors is required to prepare and disclose a reasoned opinion on the Takeover TO – in favour or against it – and to address the following topics:
- the suitability of and opportunities presented by the Takeover TO;
- the impact of the Takeover TO on the interests of the company;
- the offeror’s stated strategic plans for the company; and
- any other point of consideration the board may deem relevant.
* the ordinary shareholders’ meeting must be held within the first four months of the end of each fiscal year.
In addition to disclosure requirements on publicly traded companies resulting from securities law (including information on performance, financial position, certain shareholding changes and other material information), French company law requires disclosures as follows:
- to the public commercial registry (registre du commerce et des sociétés), information including:
- name, capital, headquarters, business, bylaws, executive officer(s), board members, statutory auditors, branches and changes in those items;
- annual accounts (which can be kept confidential on request for companies not exceeding two of the following thresholds: total assets €350,000, turnover €700,000 and 10 employees on average); and
- for certain listed companies, annual board and management reports;
- to shareholders of an SA or SCA:
- documents to be sent to shareholders, or made available to them at the company’s main office, include the following:
- prior to any shareholder meeting: proxy, agenda, draft resolutions, summary of developments during the year in progress, management report (see below), information on board members and executive officers and candidates for board positions, reports of the statutory auditors (if applicable);
- prior to the annual meeting: accounts submitted for approval; comments on historic financial information; corporate governance report (which may be combined with the management report, for a single-tier SA); the total amount of compensation for the five most highly paid individuals (or ten most highly paid, if the company has more than 200 employees); the list of all shareholders; and (for companies with at least 300 employees) a “bilan social” including detailed information about the workforce (among other items, the ratio between average compensation of the 10% highest-paid and the 10% lowest-paid employees or between the senior white-collar and certain lower-category workers, the total compensation of the ten most highly paid individuals, with comments from the workers council (comité social et économique);
- at any time: the information referred to in the preceding paragraph, for the past three years;
- at any shareholder meeting: answers to questions from any shareholder, sent to management at least four days prior to the meeting;
- for a shareholder or group of shareholders holding at least 5% of share capital:
- written responses to questions to management, posed not more than twice a year, regarding any fact of the sort which could “compromise the continuity of the business” (C. com. article L.225-232); and
- the right to request the management to report on one or several management issues and, in the absence of a satisfactory response within one month, to request a court to name an expert to report on these issues;
- to shareholders of an SAS or SARL:
- prior to any meeting: the agenda, draft resolutions and report of management thereon;
- prior to the annual meeting, the accounts and report of the statutory auditor;
- written responses to questions posed to management, not more than twice a year, regarding any fact that could “compromise the continuity of the business” (for an SAS, only available to a shareholder or group of shareholders holding at least 5% of share capital).
Also note that shareholders representing a minimum of share capital (5% for an SAS or 10% for an SARL) can request a court to name an expert to report on specific management issues (for an SAS, the shareholders have the right first to request management to provide a response on these issues).
The management report should include certain business and financial information and other matters. This report for certain large companies must include a social responsibility statement, called a “declaration of non-financial performance”. Companies required to provide this statement are those which are publicly traded with more than 500 permanent employees on average and with either assets exceeding €200 million or turnover exceeding €40 million or those not publicly traded with more than 500 permanent employees on average and either assets or turnover exceeding €100 million. The non-financial performance statement must include the following (to the extent relevant to the company’s business):
- social and environmental consequences of its business, for example in respect of climate change, sustainable development, measures to combat discrimination and to promote diversity, including in respect of the handicapped;
- principal risks and risk-prevention policies and
- for publicly traded companies, respect for human rights and anti-corruption efforts.
Further, companies with at least 5,000 employees in France or 10,000 employees worldwide must present a risk-prevention plan (plan de vigilance) on risks, relating to human rights/fundamental liberties, health, safety and the environment, resulting from the business of the company, its affiliates and certain sub-contractors and suppliers.
Any SA or SCA is also required to prepare an annual corporate-governance report (which can for certain SAs be included as a section in the management report). The corporate governance report covers such matters as:
- a description of board and committee procedures and operations,
- all positions held by board members and executive officers,
- the choice of a governance code and an explanation of any deviation therefrom,
- for certain large companies, diversity statistics and policies (required for companies meeting at least two of the following criteria: assets of at least €20 million, turnover of at least €40 million and at least 250 permanent employees on average).
For listed companies the report must indicate compensation information for executive officers, capital structure, information about voting restrictions and shareholder agreements, agreements dependent on a change-in-control and “golden parachute arrangements”.
Basic information, including the names of the members of the Management Board and the articles of association, on every German corporation is online available from its commercial register.
German stock corporations (and SEs) have to prepare and publish their annual reports and, if any, group financial statements within certain time limits after the end of a fiscal year.
For listed companies, a number of other reporting and disclosure obligations apply.
Financial reporting. Companies must publish yearly and half-yearly financial statements, and interim management statements in the middle of each financial year (or alternatively, quarterly reports) in accordance with IFRS. Non-EU/EEA issuers can prepare financial statements in accordance with their respective national laws.
Ad hoc publicity. Under Art. 17 of the Market Abuse Regulation, any listed company must promptly publish, in a so-called “ad hoc” announcement, any new fact which has occurred in its field of activity and which is not publicly known, if it is likely to have a substantial influence on the exchange price of its shares.
Voting rights notifications. A listed company must publish any voting rights notifications it has received from any of its shareholders exceeding or falling below 3%, 5%, 10%, 15%, 20%, 25%, 30%, 50% or 75% of the voting rights in the company. In addition, notifications on certain transactions in derivative financial instruments relating to shares as well as certain transactions of persons discharging managerial responsibilities have to be published.
Information on shares and shareholders' rights. In general, listed companies must provide shareholders with all information necessary to exercise their rights. Specific publication obligations exist, for example, relating to information on shareholder meetings, dividend payments, the total number of issued shares, the issue of new shares and changes in the rights attached to the shares.
The GCGC. German stock corporations listed on the regulated market must publish a yearly declaration on whether they comply with the recommendations of the GCGC and explain any non-compliance with such recommendations.
All companies (whether public or private) must disclose certain resolutions taken either by the Board or by the General Meeting of shareholders as set out by the Law. This includes for example amendments of the Articles of Association, election of board of directors, mergers, invitations to the General Meetings etc. Such information must be submitted to or uploaded on the website of the competent General Commercial Registry within twenty (20) days from the date thereof. Companies subject to International Accounting Standards must also publish certain information (such as the Annual Financial Statements) on their website
Public companies should include in their annual financial statements a corporate governance declaration where they refer to the corporate governance code adopted by the company, any deviations from the corporate governance code of the company, description of the main features of the internal control and risk management systems and references to the governing bodies of the company, their committees and the policies applied in relation to corporate governance.
Public companies must disclose to investors all significant resolutions and corporate events, such as invitation of shareholders’ general meeting, the general meeting resolutions etc, as well as any other material information on the company and its shareholding structure. Acquisition and/or disposal of significant holdings in public companies are also disclosed.
All corporate disclosures are published in the company’s website and the Athens Exchange. The corporate announcement unit of the company is responsible for the creation, update and maintenance of the company’s website and the communication of the company with the competent authorities such the Athens Exchange and the Hellenic Capital Market Commission, and the media.
All companies are required to make certain specified disclosures to the Companies Registry. Companies are required to, in respect of every year except the year of incorporation, deliver its Annual Return (which contains particulars such as the address of registered office, details of shareholders, directors and company secretary) to the Companies Registry for registration within 42 days after the anniversary of the date of the company’s incorporation in that year (section 662 of the Companies Ordinance). Between the filings of annual return, companies are required to inform the Companies Registry upon the occurrence of certain events such as change of directors, allotment and issuance of shares and alteration of articles of association, within the period prescribed by the Companies Ordinance. On top of the above, a company must make its company records, including any register, index (such as index of shareholders’ names), agreement, memorandum, minutes or other documents but does not include accounting records, available for inspection by any person entitled to inspect those records under a relevant provision, during business hours. Pursuant to the Company Records (Inspection and Provision of Copies) Regulation (Chapter 622I of the laws of Hong Kong), the Court of First Instance may make an order to compel any non-compliant company to permit an immediate inspection by the person of the company records concerned at the time, for the duration and in the manner prescribed by the Court.
Listed companies and their corporate actors are subject to more disclosure obligations. Listed companies are required to disclose their annual report which contains discussion and analysis of the group’s performance, inside information, financial statements, half-yearly report and for companies listed on the GEM Board, also quarterly report. When a listed company entered into certain types of transactions, for instance, notifiable transactions classified according to the size of the transaction using five different percentage ratios (Chapter 14 of the Main Board Listing Rules and Chapter 19 of the GEM Listing Rules), and connected transaction entered into with connected persons such as directors, substantial shareholders, their associates and subsidiaries of the listed company (Chapter 14A of the Main Board Listing Rules and Chapter 20 of the GEM Listing Rules), it is required to submit to the Hong Kong Stock Exchange a size tests checklist in respect of the transactions, and to disclose the transaction details by way of an announcement and/or a circular and submit to the Hong Kong Stock Exchange through HKEx-EPS a ready-to-publish electronic copy of the document for publication on the Hong Kong Stock Exchange’s website.
Upon the occurrence of certain types of events, substantial shareholders of a listed company are also required by the SFO to disclose their interests, and short positions, in any voting shares of a listed company, and for directors and chief executives, to disclose their interests, and short positions, in any shares in a listed company (or any of its associated corporations) and their interests in any debentures of the listed company (or any of its associated corporations), by completing relevant Forms for Filing Disclosure of Interests (“DI Forms”). Completed DI Forms shall be submitted via an electronic filing systems and the disclosure information will be published on the Hong Kong Stock Exchange website under “Shareholdings Disclosure”.
Corporate disclosures for listed companies are mainly required by the CA, the FIEA, and TSE regulations.
Under the CA, a company must keep various documents at its head and branch offices including, articles of incorporation, shareholders registry, minutes of its meetings financial statements and business reports.
Shareholders can generally inspect or copy these documents, while court permission is required for minutes of board meetings or committee meetings.
In addition, the company must provide shareholders with financial statements and business reports approved by the board when giving notice of an annual shareholders' meeting (see question 25).
Listed companies have periodic reporting requirements and must submit annual and quarterly securities reports to the authorities. These companies also have to file, without delay, extraordinary reports on the occurrence of certain major actions or events.
(iii) TSE regulations
Listed companies must promptly disclose certain material events, and also disclose summary reports on financial results on a quarterly basis. Furthermore, listed companies need to submit a corporate governance report setting forth, among other things, an outline of the corporate governance system and the basic policy regarding the internal control system.
The most relevant corporate disclosures may be divided into three areas:
- Disclosure requirements related to the shareholders meetings (such as on the convening notices, proposals and resolutions adopted) and annual reports and accounts;
- Information duties concerning qualified shareholdings in private and public companies (being more demanding in listed companies and applying if anyone reaches, exceeds or reduces the thresholds of 2%, 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 and 90% of voting rights);
- Listed companies are subject to additional disclosure requirements arising from the Securities Code and CMVM’s regulations on other corporate matters (e.g., corporate governance report, own shares transactions and the exercise of shareholders rights), regular financial information (at least half-yearly and yearly) and from inside information rules (in line with the EU market abuse regime).
Relating to listed companies, this information is disclosed on their website and CMVM’s website.
Disclosure requirements are frequently triggered under the following laws and regulations:
First, under the KCC, the following documents must be prepared, kept at the Company’s head office (and branch offices, if any) and made available for inspection by shareholders and creditors at least one week in advance of the ordinary GMS: (i) a business report prepared by the director(s), (ii) financial statements prepared by the director(s) and (iii) an internal audit report prepared by the statutory auditor (or the audit committee if applicable).
Second, under the Act on External Audit of Stock Companies, any listed company, any company (joint stock company or limited company) with assets or sales equal to or greater than KRW 50 billion, or any company that is not a small-sized company as defined in the Enforcement Decree of the Act on External Audit of Stock Companies must have its financial statements audited by its external auditor and make the external auditor’s audit report available to the shareholders at its head office and branch offices.
Third, the FSCMA and the relevant disclosure regulations require various reports to be made by listed companies and their shareholders, including the following:
(i) In terms of periodic reports, a listed company is required under the FSCMA to submit to the KRX its annual reports within 90 days of the end of each fiscal year and semi-annual and quarterly reports within 45 days of the end of the applicable quarter.
(ii) A listed company is also required under the FSCMA to promptly report to the FSC certain events or BOD resolutions that are enumerated in the FSCMA (the general guideline being that such events or resolutions may affect an investor’s decision). For example, a listed company is required to file a report with the FSC regarding a contemplated merger, business transfer, spin-off or comprehensive stock swap or the acquisition or disposal of treasury stock. Such reports filed by listed companies are made available to the public by the FSC and the KRX via their websites.
(iii) In the event where the information provider of the fair disclosure intends to selectively release certain information to specific recipients such as institutional investors, the applicable listed company is required to notify or report such fact and the contents of such information to KRX, which is then disclosed to the public.
(iv) Once an investor in a listed company (including specially related persons and other parties acting in concert) holds 5% or more of the voting shares or certain other equity securities issued by such company, the investor must file a report regarding such acquisition with the FSC within five business days. For purposes of this report, the investor is deemed to hold the shares upon entering into a share purchase agreement. When the shareholding of the investor reaches 10% or more of the issued and outstanding voting shares of the listed company, a separate report must be filed with the Securities and Futures Commission (“SFC”) within five business days, and any change in shareholding must be reported to the SFC within five business days of such change.
Fourth, the MRFTL requires any large-scale affiliate transactions (that is those valued at KRW 5 billion or greater, or as otherwise prescribed by the MRFTL) to be subject to a BOD resolution and subsequent public disclosure.
Finally, from 2019, a KOSPI listed company with total assets of KRW 2 trillion or more is required to submit a corporate governance report providing the details of corporate governance such as shareholders, the BOD and auditors.
Corporate disclosures are required under a variety of provisions under the CO, the OaEC, other statutes as well as stock exchange rules. A broad distinction can be made between periodic, recurring disclosures and disclosures required upon the occurrence of certain events.
Listed companies are required to prepare and publish an annual report comprising the annual (consolidated and stand-alone) financial statements and a management report. The compensation report required by the OaEC and the corporate governance report pursuant to the DCG are typically included as separate sections in the annual report. The publication of semi-annual (consolidated) interim financial statements is mandatory for companies listed on the SIX, while quarterly financial reporting is voluntary.
Companies listed on the SIX are further required to inform the market of price-sensitive facts (so-called ad hoc publicity) as soon as they occur through both a "pull" (publication on the company's website) and a "push" (distribution by e-mail) system so as to ensure equal treatment of market participants. Companies may postpone the publication under certain limited circumstances only.
SIX stock exchange regulations require that members of the board of directors and executive management report transactions in the company's equity securities or financial instruments related thereto (including transactions by related parties if made under the significant influence of the relevant member) to the company. The company must submit information regarding such transactions through an electronic reporting platform.
In addition to the above, SIX's regulations also require companies to provide certain information on their websites (such as a corporate calendar) and provide for a number of regular reporting obligations. Specific reporting obligations apply to issuers of certain instruments such as bonds and derivatives.
Public companies are required to make disclosures based on rules and regulations promulgated by the SEC and the applicable stock exchange. These required disclosures are intended to timely provide investors with information that would be material to an investment or voting decision and include annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements related to annual and special meetings of shareholders and certain other reports disclosing changes in beneficial ownership of company equity securities. The required disclosures are publicly filed with the SEC and are also available on the company’s website.
Companies, both private and public, may also be required to make certain disclosures in accordance with the terms of debt and equity financings. These disclosure requirements are set forth in the applicable transaction documents (i.e. credit agreements, indentures and stock purchase agreements) and typically include providing investors with periodic financial statements and disclosure of material events.
The level of corporate disclosures required depends on whether a company is listed. All UK companies must make certain basic information available to the public at Companies House, including details of the registered office, the directors, the company secretaries (if any), and persons with significant control and copies of the constitutional documents and annual accounts.
Listed companies are subject to additional disclosure requirements under the Listing Rules, the Disclosure and Transparency Rules and the Market Abuse Regulation. These include an obligation to announce “inside information” without delay (subject to a limited ability to delay disclosure in particular circumstances), disclosure of voting rights notifications it has received, information on signification or related party transactions, share issuances or buybacks and other material information.
In addition, depending on their size, companies may be subject to a variety of other disclosure obligations, including a strategic report, statement in relation to compliance with the Modern Slavery Act, gender pay gap reporting, and payment practices. Please also see the response to Question 28.
All companies are required to send annual financial statements to shareholders in advance of their annual meeting of shareholders. Securities law requires public companies to make certain public disclosures of material information and documents on a continuous basis through market dissemination and filings on the System for Electronic Document Analysis and Retrieval (“SEDAR”) website. These continuous disclosure obligations include the dissemination and/or filing of annual and quarterly financial statements, management discussions and analysis, annual information forms, management information circulars (which, among other things, contain detailed disclosure relating to governance practices and compensation) and proxy forms, reports on voting results, material contracts, and reports, news releases and other disclosure documents relating to material information regarding the corporation, its business and its securities.
Non-listed and non-supervised entities are not required to disclose business information to the public, other than the required corporate disclosures to the Register of Companies, such as: (a) corporate seat and purpose, (b) number and characteristics of the issued shares or quotas, (c) names and data of (i) shareholders or quotaholders, (ii) members of the corporate bodies (directors and statutory auditors, with indication of those holding managing director or chair functions, as well as their date of appointment and term in office), (iii) accounting auditor, (iv) entity carrying out management and coordination activity (direzione e coordinamento) over the company, (d) etc.
With regard to listed companies, inter alia: (a) pursuant to Art. 120 CFA, investors holding more than 3% of the corporate capital of the company (5% if the company is a SME under the CFA) shall notify such holding to the company, CONSOB and the market, (b) pursuant to Art. 122 CFA, where investors holding more than the mentioned thresholds enter into a shareholders’ agreement (patto parasociale), such investors shall inform of the agreement the company, CONSOB and the market, (c) pursuant to Art. 123-bis, par. 2, CFA, on a yearly basis, the company shall inform the market of the compliance to the CG Code provisions (comply-or-explain).
Moreover, while listed companies shall comply with the disclosure duties under Regulation (EU) no. 596/2014 on market abuse (Market Abuse Regulation or MAR), certain large undertakings and groups (even though non-listed) shall comply with those under Directive 2014/95/EU as regards disclosure of non-financial and diversity information, as well as the relevant national implementing laws and regulations.
Specific provisions apply to banks and financial institutions.
The companies subject to independent audit under the TCC must establish a website within 3 months as the registration of the company to the trade registry and must allocate a specific part of this website to announcements of the publications required by law. The company must make the announcement within the time period granted by the law differently for each announcement. Not fulfilling these obligations can lead to the nullification of the related resolution, arising of the consequences of illegality and the responsibility of the board members or the directors acting in fault (TCC, article 1524). In addition criminal liability will also arise if the said website is not formed. In this case, board members will be subject to judicial fine of between 100 and 300 days and the ones who did not duly provide the related information on the website are subject to judicial fine up to 100 days (TCC, article 562/12).
The information that must be shared with public at the Public Disclosure Platform are stipulated in the legislation and specified in some of the questions of this QA.
Luxembourg law only provides for specific disclosure obligations rules for listed companies, whose shares are admitted for trading at the Luxembourg stock exchange. These disclosure rules particularly relate to transparency obligations in relation to, inter alia, the company's governance structures, as well as other policies, such as risk management.
In addition, all Luxembourg companies must be registered with the register of trade and companies (registre du commerce et des sociétés), and must publish their articles of association, managers/directors, share capital, shareholders (in the case of a SàRL) as well as changes therein, mergers (proposal) and annual accounts.
As of 1 March 2019, all entities registered with the Luxembourg register of trade and companies need to including civil and commercial companies, branches of foreign companies, Luxembourg common investment funds (F.C.P.) and other types of investment funds such as the UCITS, SICAR, RAIF and SIF must register their ultimate beneficial owner(s) ("UBO(s)") information via an online platform managed by the Luxembourg Business Registers. A substantiated request to restrict access to the UBO(s) information on file can be submitted at the same time or, under certain conditions, at a later stage. There is nevertheless an exception for companies whose securities are admitted to trading on a qualifying regulated market ("Qualifying Listed Entities"). The information to be provided includes the ultimate beneficial owner 's first and last name, nationality, date and place of birth, country of residence and national identification/registration number, and the nature and scope of the interest held in the Entity. Qualifying Listed Entities are only required to provide the name of the market on which their securities are traded.
Furthermore, both the Companies' Act, the 2011 Act and a number of other legislations provide for certain requirements with respect to provision and or/disclosure of certain information to the shareholders and/or third parties.
The strictest standards on corporate disclosure apply to public (listed) JSCs. Inter alia, public JSCs must disclose their constituent documents, GM agendas and minutes, the reports of the audit commission and independent auditors, annual financial statements, reports of the supervisory and executive board. Moreover, public JSCs are also obliged to disclose the date and agenda of upcoming GMs. The company annually submits the above documents along with some other information (shareholders owning more than 5% of shares, information on material transactions, information on the existence of a shareholder’s agreement etc.) to the Commission or other authorized agents for further disclosure. Besides, public JSCs disclose certain additional information to the stock exchange where they are listed.
Since 2018, private JSCs must publish the date and agenda of upcoming GMs on their web-sites. Like public JSCs, private JSCs should submit certain data (financial statements, information on majority shareholders, GM protocols etc.) to the Commission for further disclosure.
LLCs are not obliged to make any public disclosures. The only obligation imposed on LLCs by law is to retain all financial statements together with other documents pertaining to the activities of the company and provide them to participants or relevant state authorities.
The principle disclosure and reporting requirements on Australian companies are set out in the Corporations Act and the Listing Rules. As a basic rule and subject to certain exemptions, the Corporations Act requires all public companies, all large proprietary companies and certain small proprietary companies (notably those small proprietary companies that are foreign-controlled or have been requested to do so by ASIC or shareholders) to prepare and disclose annual financial reports. The Corporations Act also sets out the instances in which the annual financial reports must be audited.
The Listing Rules contain a number of additional disclosure rules that apply to listed companies, including additional periodic disclosure requirements and continuous disclosure requirements, including the disclosure of market sensitive information. The type of information that this covers will depend on the nature of the business of the listed company, but typically includes material transactions, involvement in a material law suit or the fact that the company's earnings will be materially different from guidance or market expectations.
Pursuant to the Companies Law, board members are under obligation to disclose all related party transactions to the board meeting and refrain from voting on such matter. Moreover, according to article 220 of the executive regulations of the said law, the board of directors shall disclose to the shareholders a report on the activities of the company including, in particular, the related party transactions. Furthermore, all shareholders shall have access to all documents in relation to any item of any general assembly meeting. According to the Companies Law, any shareholder holding 10% or more of the capital shares of a company has the right to obtain all information required in relation to related party transactions.
For listed companies, the EGX listing rules require disclosures including:
- Any amendments to the disclosures made at the time of listing;
- Any arbitral award or court judgment that affects the financial status of the company or the rights of the shareholders;
- Any judgment of imprisonment to any of the board members of the company;
- Related party transactions;
- Trading of shares by principal shareholders and their related parties in case of increase or decrease of the ownership by 5% or its multiples;
- In case of ownership by any of the principal shareholders or their related parties to 25% of the capital of the company or voting rights, they shall disclose their future investment plans in the company;
- In case of purchase or disposal of 3% of the capital of the company or voting rights by a board member, they shall disclose their future investment plans in the company;
- Periodical disclosures of the listed companies including but not limited to, capital structure, number of shareholders, board structure, treasury shares status and any amendments to the articles of association;
- Disclosure letter of the outcome of the independent financial consultant on the fair value;
- Disclose minutes of meeting of the EGM and OGM;
- Resolutions related to the dividend distribution; and
- Any material events including but not limited to; potential issuance of guarantees, debentures or mortgages, any resolution that may result in cancellation of registered stock, any potential amendment to the capital structure exceeding 5% of the shareholders’ rights and any transactions the value of which exceeds 5% of the revenues of the previous year.