1E9Ct5D

3.1. Corporation (S/A)S/As are governed by their corporate bylaws and regulated by Law 6,404/76.3.1.1. CostA S/A involves more formalities than a LTDA. for its organization and operation, notably by virtue ofthe mandatory publication of certain corporate acts and documents; consequently, its cost is higherthan that of a LTDA. As an example of this cost, a S/A will currently spend a minimum amount ofapproximately R$ 30 thousand (US$ 18 thousand) annually, on publications alone. However, closelyheld S/As with less than 20 shareholders and with shareholders‟ equity, on the balance sheet date, ofless than R$ 1 million (equivalent to approximately US$ 430 thousand), are not required to publishfinancial statements and other management documents; they are only required to register a certifiedcopy of such documents with the Commercial Board. In addition, closely held S/As with a netshareholders’ equity of less than R$ 2 million (approximately US$ 1 million) on the date of the balancesheet are not required to prepare and publish cash flow statements, which considerably reduces thecost of publications.3.1.2. NameAn S/A name must necessarily be followed by the expressions “sociedade anônima” or “companhia”,in full or in abbreviated form.3.1.3. TypesS/As may be of two types:a) publicly held (“open”): when their issued securities are admitted for trading on the stock market.Publicly held companies involve a greater number of formalities, and are also subject to the specificlegislation of the capital market, which has as its main supervisory body the Brazilian SecuritiesCommission (Comissão de Valores Mobiliários - CVM), corresponding to the U.S. Security ExchangeCommission (SEC);b) closely held (“closed”) - when their issued securities are not admitted for trading on the stockmarket. Their operation is less formal and several requirements that are obligatory in relation topublicly held companies are optional in the case of closely held companies.11