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Supervisory structure introduced by the New Commercial Code

We hereby inform the business community and other interested parties that, with the New Commercial Code, approved by Decree-Law no. 1/2022, of 25 May, changes have been introduced to the way certain corporate bodies function. In these terms, we bring below a description of one of the changes, specifically concerning the supervisory structure. We would like to remind that this new Commercial Code ("CCom") will come into force on 22 September this year.

In effect, article 114 of the CCom states that one of the bodies of a commercial company is the Fiscal Council or Statutory Auditor. Among other duties, this body is responsible for supervising the company's management and verifying compliance with their legal duties and those arising from the articles of association, as well as opining on the annual report of the board of directors and its proposals to the General Assembly on certain matters.

Under the terms of article 114(3) of the CCom, apart from the limited liability share companies for which it has always been mandatory to have a supervisory body, whenever the company issues securities or is classified as a medium[1] or large company[2], the supervisory structure adopts one of the following forms: Fiscal Council or Statutory Auditor or a Board of Directors which includes the Audit Committee and the external auditor.

The second form indicated above represents an innovation to the corporate supervision structure in the Mozambican legal system. Furthermore, if the company resorts to public subscription or public offering, or trades on the securities market, it must hire an external auditor. This structure can be changed at any time.

With this innovation, we understand that it allows for companies in the abovementioned conditions to have a reinforced internal control mechanism. It should also be noted that the same impediments applicable to the Fiscal Council or Statutory Auditor apply to the members of the Audit Committee, with the exception of the provision in article 150(1), paragraph a) of the CCom.


[1] Employs between thirty up to one hundred employees and has an annual turnover higher than 30.000.000,00 but up to 160.000.000,00 Mt.

[2] Employs more than one hundred employees and has an annual turnover higher than 160.000.000,00 Mt.