The Business Environment Law seeks to facilitate economic activity in Brazil
By Priscila Turchetto Grupo PLBrasil | 09/30/2021 Law 14.195/21, which was nicknamed the Business Environment Law, with orignated in Provisional Measure 1040/21. Its sanction by the Presidency of the Republic, took place on August 26, with 37 vetoes. among them the passage that dispensed with the issuance of an Annotation of Technical Responsibility (ART) or equivalent document for works. and exemption from IPI on vehicles purchased by a person with a disability and from offsetting the presumed credits of the Contribution to PIS/Pasep and Cofins. Similar to the Economic Freedom Law, Law 13.874/19, it is a legislative diploma that promotes changes in different sectors of the legal system. Among the changes that came into force, we mention those that facilitate the constitution and operation of legal entities and the development of activities: i) the unification of federal, state and municipal tax registrations in the National Register of Legal Entities (CNPJ); ii) the maintenance of the electronic system by the bodies involved in the process of registering and legalizing companies, so that the entrepreneur can previously consult the viability of the address where the company will be installed and the availability of the business name; iii) the use of the national risk classification of activities by states and municipalities that do not have their own classification; and iv) automatic granting, without human analysis, of operating permits and licenses to companies involved in medium-risk activities. In addition, it is important to mention the prohibition of charging, in the company’s registration process, data or information that already appears in the federal government’s databases; the expansion of the powers of the general meetings of publicly-held companies, in which minority shareholders may decide on the sale of company assets in excess of 50% (fifty percent) of total assets; the extension of the deadlines for calling general shareholders’ meetings, from 15(fifteen) for thirty (30) days; the prohibition, in publicly-held companies, of the accumulation of functions between the company’s main director and the chairman of the board of directors; the possibility of electing non-resident natural persons as Managers of Corporations (Company or Sociedade Anônima (S/A), as long as they are appointed in Brazil as an Attorney with powers of summons. In line with some of these important changes, we mention art. 41 of Law No. 14,195 which establishes that “individual limited liability companies existing on the date of entry into force of this Law will be transformed into single-person limited liability companies regardless of any change in their articles of incorporation”. Created in 2011, Individual Limited Liability Company (EIRELI) was a microenterprise model that contemplated entrepreneurs not included in the Individual Microentrepreneur (MEI) model, due to the type of activity or limitations on annual revenue. To facilitate entrepreneurship in Brazil, the Sociedade Limitada Unipessoal (SLU) was established by the Economic Freedom Law (13.874/2019) and provided another option for the entrepreneur who wanted to establish a business with individual performance. To some extent, the figure of EIRELI, was already with its relevance reduced due to the simplified discipline of the SLUs, which had characteristics very similar to those of the EIRELI, but did not establish the mandatory minimum share capital of 100 minimum wages in force. The tacit transformation of EIRELI to SLU will be carried out automatically, and in principle, it does not require any kind of attitude by the entrepreneur, but on the other hand, it makes it possible to reduce the capital of the transformed company, due to the absence of mandatory minimum share capital. On September 9, 2021, the Ministry of Economy (ME) published the Official Letter SEI No. 3510/2021/ME, containing guidelines on filing, which must be followed by all Boards of Trade in the country: 1. Inclusion in the registration form of the individual limited liability company of the information “automatically transformed to a limited liability company, pursuant to article 41 of Law 14,195, of August 26, 2021”; 2. Wide disclosure by the Boards of Trade regarding the extinction of EIRELI and about the possibility of creating a SLU, as well as the impossibility of filing documents for the incorporation of new EIRELIs; 3. Until the submission of a new official letter by the National Department of Business Registration and Integration (DREI), the Boards of Trade must normally file changes and terminations of EIRELI. The PLBrasil Group’s Board of Trade teams is available to assist you through the channels below: +55 (11) 3292-5050 junta@plbrasil.com.br
Annual Update of the Corporate Board
We inform that the deadline for the annual update of the Corporate Board in the RDE-IED system, referring to the base date of December 31, 2020, expires on March 31, 2021. Mandatory Criterion The annual update of the Corporate Board is mandatory for foreign direct investment receiving companies with a total equity or equity of less than R$ 250 million. Penalty The non-provision or provision of false, incomplete, incorrect or outside the established deadlines subject offenders to a fine of up to R$ 250,000.00 (two hundred and fifty thousand reais), as established in Article 60 of Circular No. 3,857, of November 14, 2017. The PLBrasil Group’s Foreign Capital teamis available to assist you with the registrations required by the Central Bank of Brazil in the channels below: +55 (11) 3292-5085 bacen@plbrasil.com.br
Learn the difference between electronic and digital signatures
The electronic signature can be used by individuals and/or legal entities and consists on the subscription of documents through computational means, used to validate the integrity and authenticity of both the content of the documents and the signatures of their signatories. Electronic signatures are generally used in low-complexity documents which, by law, do not require any formality. In other words, when there is no need to prove, by a specific means defined by law, that a certain signature was executed by the person who is said to be. Get to know some types of electronic signatures: Digitalized signature – reproduction of the handwritten signature as an image; Digital Accept – when the action of “Clicking on an acceptance button” is done; Digital Password – widely used in banking accesses, through filling in the user’s login and password; Token validation; IP (Internet Protocol) recognition; and Biometric recognition. When the signature is made through a digital certificate (technology that uses data encryption, ensuring authenticity, confidentiality, integrity and non-repudiation of electronic information), it shall be classified as a digital signature, since it uses asymmetric encryption that is composed of a pair of cryptographic keys (public and private) that complement each other, being considered a kind of electronic signature. In Brazil, the digital signature was introduced and is regulated by the Provisional Measure (“Medida Provisória”) 2.200-2 of August 24, 2001 (“MP 2.200/01”). Does the electronic signature have legal validity? Article 107 of the Civil Code specifies the principle of freedom of forms, which determines that the form of expression of will is free, except in the cases required by law. Therefore, as long as there is agreement between the parties, regardless of the form of signature, it has legal validity. The aforementioned Provisional Measure (“Medida Provisória”) MP 2.200-2 certifies in its article 1 the legal validity of signatures made by electronic means, in these terms: “Art. 1st The Brazilian Public Key Infrastructure (“Infra-Estrutura de Chaves Públicas Brasileira”) – ICP-Brasil is hereby established to guarantee the authenticity, integrity and legal validity of documents in electronic form, support applications and enabled applications that use digital certificates, as well as the execution of secure electronic transactions.” In addition, the new law 14.063 of September 23, 2020, which deals with signatures in the public area, defined 3 types of valid signatures: simple, advanced and qualified. In summary, simple and advanced signatures are those that we call an electronic signature, while the qualified signature, as it mandatorily employs the ICP Brasil digital certificate, is referred to as digital signature. When to sign electronically? We always recommend to evaluate the peculiarity of each operation; however, in general, the electronic signature can be used when, for example: It is a low-risk document; They are internal documents that need a simple approval, acceptance or agreement with an adhesion contract and others; They are low value contracts; and They are documents related to the Human Resources area, for acceptance between the company and its employees. Should you have any questions, our Commercial team is available at: +55 (11) 3292-5050 nn.sp@plbrasil.com.br
New REDESIM system simplifies bureaucracy
Agility in the Brazilian business environment has reached a new level with the consolidation of REDESIM. Integrated into the gov.br platform, this network unifies the systems of City Halls, the Federal Revenue Service, Finance Departments, and Commercial Boards. The goal is clear: to transform what was once a marathon of counters into a continuous and efficient digital flow. This operational change is supported by Provisional Measure No. 881 (“Economic Freedom MP”), converted into Ordinary Law No. 13,874, of September 20, 2019, and DREI (“National Department of Business Registration and Integration”) Normative Instruction No. 66, of August 6, 2019, which laid the groundwork for reducing bureaucracy in free enterprise. Speed and Cost Reduction with the REDESIM The main gain from this model is time. Opening a company used to take weeks, but today it can be completed in up to 24 hours. This partnership between government spheres has eliminated bottlenecks, reduced operating costs, and simplified market access for companies of all sizes. Simplified Expansion: The End of Barriers Between States One of REDESIM’s greatest advances is the ease of opening branches. Whereas entrepreneurs previously had to deal with different processes at each Commercial Registry in each state where they operated, today the scenario is one of strategic centralization. Now, when expanding the business to another state, the main steps are taken exclusively at the Commercial Registry of the headquarters. The system has eliminated the need for separate and redundant protocols, which generated costs and wasted time. Automatic Data Integration In this new flow, the Commercial Registry of the branch’s location acts receptively. It receives and stores the data sent by the headquarters automatically via the system. This means that the entrepreneur no longer needs to initiate isolated processes in each state, ensuring much faster and safer expansion. Qual foi a mudança no processo? 1st Step: Consult the feasibility in the City Hall (s) for opening of head Offices and/or branch and changes of any nature; 2nd Step: National Collector – Federal Revenue System which enables the completion of the Document of Basic Entrance (“DBE”), necessary for any change related to the National Legal Entity register (“CNPJ”); 3rd Step: Prior to the actual registration, governmental entities may require through the system, the additional collection of necessary data and information to obtain the registration. At this stage, the signature can be done online via digital certificate and no physical attendance will be required. After the analysis, the registration will be made by the competent body; and 4th Stage: In this stage, the verification will be performed by the Integrator State and then will be issued the Business License for the company to start activities. For activities which are considered as low risk (performed in an area under a fully exercise of law, pursuant to article 7 of Complementary Law No. 123, 2006, explored in a harmless or virtual, practiced at the residence of the entrepreneur or when the activity performed is typically digital), no attendance will be required. The PLBrasil Group’s New Business team is available through the channels below: +55 (11) 3292-5050nn@plbrasil.com.br
Law No. 13,818 establishes a new approach to legal disclosures for corporations
On April 24, 2019, Law 13,818 was published, bringing a new perspective in relation to legal publications, enabling corporations to benefit from the simplified regime of corporate acts. Previously, the Law No. / 1976 (“Brazilian Corporation Law”) exempts from publication of corporate documents at the Official Gazette and in newspaper of great circulation only Companies which have less than 20 (twenty) shareholders and shareholders’ equity of up to a maximum of R$ 1 million (one million of reais). Currently, this amount was changed to R$ 10 million of reais. Currently, this amount was changed to R$ 10 million of reais. As of January 1st, 2022, corporations, which guidelines falls under the new aspects of the legislation, may publish the corporate documents in a summarized form, in a newspaper of great circulation in the locality of the headquarters, and the full publication will only occur in the website of the newspaper of great circulation. All publications must contain digital certification demonstrating their authenticity, which is conferred by the accredited authority within the scope of the Brazilian Public Key Infrastructure (ICPBrasil). The vacancy period of said legislation will allow the market to adapt to the new model of systematic publication of corporate acts and will impact on a large cost reduction with publications.O período de vacância de referida legislação possibilitará que o mercado se adapte ao novo modelo de publicação sistemática de atos societários e impactará em uma grande redução de custos com publicações.
Changes to the rules governing the removal of directors and the expulsion of members in limited companies
We wish to inform you that Law No. 13,792 was published on 4 January 2019 in the Official Gazette (D.O.U.), amending the quorum required for the removal from office of a director or partner appointed to that role by an express provision in the articles of association. The new legislation amends paragraph 1 of Article 1,063, as well as the sole paragraph of Article 1,085, both of Law No. 10,406 of 10 January 2002 (Civil Code). The main change relates to the quorum required for the removal of a partner appointed as a director in the articles of association, which now requires the approval of shareholders holding more than half of the share capital, unless otherwise provided for in the articles of association. The previous wording required a two-thirds (2/3) quorum for this purpose. The requirement to convene a meeting or general meeting for the purpose of expelling a member from a limited liability company comprising only two members has also been waived, provided that the articles of association expressly mention the possibility of just cause and the expulsion of a member. Please follow the link to view the full text of Law 13,792 of 3 January 2019.
How to invest in a business in Brazil as a Foreigner in 6 steps
The success of the investment in a new foreign market depends, firstly, on the compliance with the country’s regulations. The faster and easier the process is, the greater the guarantee the local company will have the tools it needs to growth and success. Having the support of paralegal services may be the decisive solution to companies looking for opportunities of investments in Brazil to speed up the constitution of the legal entity, with competitive costs and effectiveness. Brazil stands as one the most bureaucratic countries in the world when it comes to starting a business, including those with foreign partners as shareholders, the hardship and documents demanded are increasingly larger. Besides demands as for legalization of documents drafted abroad, there are procedures in the Notaries Public to be done before filling the Articles of association of the Brazilian Company to be registered at the Board of Trade. Are you willing to invest in the Brazilian market? PLBrasil has large experience with business consulting and legal representation of foreign companies. Here are 6 basic steps on how to start a business in Brazil: The first step to stablish a subsidiary of the foreign company in Brazil is to grant powers to an attorney in fact for “company law and tax purposes”. The future attorney in fact has to be Brazilian, denizen, or hold a permanent visa and be resident in Brazil as well as have tax residence. From this moment on, he/she will be responsible for the interests of the foreign company as shareholder of the Brazilian company. The attorney in fact, with powers to receive summons and subpoenas from courts and/or tax tribunals, will be responsible vis-à-vis the Brazilian official authorities. It is also necessary to appoint and administrator of officer to the Brazilian company. This administrator shall not be prevented by the law or convicted, which will prevent him/her from, even if temporarily, to accede to be a civil servant, or convicted from bankruptcy crime, malfeasance, bribery, graft, embezzlement, or against the national finance system, against the rules of concurrence, consumer relations, or crime against welfare public faith or property. The second step, after appointing the legal representative, is to draft the articles of association. In this document the local or foreign shareholders shall be nominee, the company’s name, the corporate purpose, the headquarter address, the capital, administration, directors, corporate governance, amongst others. At this point, it is important to rely on the support of an attorney for the drafting of the terms. PLBrasil can refer lawyers that suit your needs. At this point, the constitution of a new company will be under federal, state and municipal levels. In order to operate legally and according to the corporate purpose, it is necessary to obtain beforehand permits, in some cases before filing the articles of association at the Board of Trade of the State in which the company will be set up. When the Articles of Association are dully filed, one shall move to the federal level, in order to obtain the Legal Entity Tax Identification Number (CNPJ), which will allow the payment of the taxes and obligations to the Federal Revenue Office. It is also necessary to start analyzing the documentation from the municipality and State (as for the State Treasury Office), in case the corporate purpose is for industry, commerce or Transportation. In order to the foreign shareholder be able to invest or loan money to the Brazilian subsidiary, electronic registers in the Brazilian Central Bank system are necessary, which will allow the inbound of foreign capital, being considered long term capital and/or foreign loan. The Law 4.131/62, which allows foreign investment, grants equal treatment to the foreign capital in Brazil, and set deadlines for the statement to be sent to the Brazilian Central Bank about the foreign capital invested in Brazil. The register of the foreign capital at the Electronic Declaratory Register (RDE) allow the return of the invested capital overseas, fast and without any need of authorization beforehand. At this point, the Brazilian company must be about to open a bank account in Brazil, in order to allow exchange contracts and receiving of remittances. In case you intend not to overspend in these areas, we can recommend companies of our trust specialized in Business Process Outsourcing. After all the steps above described were taken, and the company is dully incorporated, PLBrasil will be able to answer your demands as for signing documents, represent in meeting and intermediating the interests of the foreign company in the Brazilian Market. This newsletter is only informative and must not be considered as a legal opinion.
5 reasons to hire a Paralegal
If you’re looking to optimize your legal team, increase productivity and focus on strategic activities, here are 5 reasons to hire a paralegal. This professional could be the missing piece to streamline bureaucratic processes and ensure legal compliance. The paralegal is the lawyer’s right-hand man, a professional with legal or accounting training who takes care of the paperwork, such as documents, certificates, processes and deadline control. The paralegal knows the legal procedures and speeds everything up, releasing the lawyer for more important tasks. Having a specialized and experienced professional in the procedures of public departments and their regulations avoids errors and favors the grant of processes. Hiring a Paralegal is an ideal solution for growing companies that need quality support without compromising their finances and payroll. Do not let paperwork limit your firm’s potential. With a paralegal taking care of the paperwork, you and your team can focus on business-boosting strategies, more complex cases, and client service. It means more time to defend your client’s interests and work on your core business. Can you imagine having an organized and detail-oriented professional taking care of all the documents and deadlines? Hiring a paralegal ensures that you no longer have to keep track of spreadsheets or fear missing an important deadline. Laws and regulations change all the time, and the paralegal is up to date with these changes, so that your firm is up to date with the legislation, minimizing risks and ensuring the legal certainty of your business. Laws and regulations change all the time, and the paralegal is up to date with these changes, so that your firm is up to date with the legislation, minimizing risks and ensuring the legal certainty of your business. We invest in technology to offer capabilities that would normally be out of reach for many companies. With our platform, you have access to regulatory and corporate documents, in addition to monitoring the progress of the proceeding at any time, and updated in real time. Invest in the growth of your business! In addition to paralegal services, PLBrasil Group offers a full range of solutions for your company, including legal representation, accounting, and translation. Count on our expertise to boost your business.
