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occur without prior registration at CVM. The sale of the control of a publicly held company is subject tocertain conditions (e.g. public offerings) in accordance with CVM rules. Moreover, such companiesshall have independent auditors and comply with a series of disclosures determined in the rulesissued by CVM.Law 6,404/76, which regulates corporations, was amended in 2001, with the aim of increasingtransparency and increasing the rights of minority shareholders. Therefore, at least theoretically, thereform privileged the inclusion of rules that may be classified as being of corporate governance,including the following: (i) reduction, in the capital of the company, of the number of preferred shareswithout voting rights or subject to restriction in the exercise of this right; (ii) increased advantages ofthe preferred shares of publicly held companies (iii) tag along: in the event of the sale of the direct orindirect control of a publicly held company, the acquirer will be required to conduct a public offering forthe acquisition of the voting shares held by the other shareholders, at the amount equivalent to at least80% of that paid per voting share of the control block; (iv) increase in the period of time preceding thepublication of the Shareholders‟ Meeting to 15 days in the 1st call and 8 days in the 2nd call (the timefor closely held companies is 8 and 5 days, respectively); (v) right to elect and depose one memberand one alternate for the Board of Directors to shareholders with more than 15% of the total votingshares and to holders of preferred shares without the right to vote or with restricted voting rights thatrepresent 10% of the capital stock; (vi) inclusion of the spin-off among the cases that entail the right ofwithdrawal, if the spin-off implies the reduction of the mandatory dividend, participation in groups ofcompanies or changes in the corporate purpose; (vii) obligation of the controller of a publicly heldcompany, of the shareholders and group of shareholders that elect a member of the Audit Committeeto immediately apprise CVM, the Stock Exchange and organized over-the-counter entities ofmodifications to their shareholder statuses in the company; (viii) in the event of the going private of thecompany, the obligation of the controlling shareholder or of the company itself to make a publicoffering for the acquisition of all the shares at a fair price; (ix) increased independence of the AuditCommittee, permitting any member to supervise the acts of the administrators, verify compliance withlegal and bylaw obligations, and report any errors, frauds or crimes to the administrative bodies, and incase of failure to carry out the necessary measures, by such bodies, to the Shareholders‟ Meeting,suggesting courses of action that are useful to the company.3.1.16. New RulesNew rules for large-sized companies, whether S/As or LTDAs, were introduced by Law 11,638/07,requiring them to adopt a series of measures, with a view to the modernization and harmonization ofthe corporation law with the fundamental principles and best international accounting practices, inorder to correct imperfections of the law theretofore in force, adapt the law to the social and economicchanges in the market and strengthen the capital market itself. These measures include (i) alterationsconcerning the recording and drawing up of financial statements, based on international standards17