Legal Framework of Startups is sanctioned and enters into force on September 1st, 2021
On June 1st, 2021, Supplementary Law No. 182 was sanctioned, which instituted the ‘Legal Framework for startups and innovative entrepreneurship’. The novelties brought by said law create better conditions for the development and consolidation of startups in the country, also stimulating initiatives for integration between the public and private sectors.
The new Legal Framework provides for some requirements for qualifying a company as a Startup, including: (i) having an annual gross revenue of up to R$16,000,000.00 (sixteen million reais); (ii) not exceed 10 (ten) years of registration in the National Register of Legal Entities (CNPJ); and (iii) that declare, in their articles of incorporation, the use of innovative models or that fall under the special regime Inova Simples – regulated by CGSIM Resolution No. 55, of March 23, 2020.
The Legal Framework provided investors with more possibilities to supply financial resources, without participating in the company’s capital and management. Investments may be made, for example, through subscription rights, call options, debentures and constitution of a special partnership agreement (Sociedade em Conta de Participação) between investor and company. In these cases, the investor will only be considered a partner of the startup after the contribution is converted into an effective equity interest and, since there is no intentional misconduct, fraud or simulation, will not be liable for any debts of the company.
In addition to that, startups may receive funds from companies that have invest obligations in research, development and innovation, which may contribute such obligations by means of equity funds, Equity Investment Funds (FIP), and investment in financing and accelerating startups programs managed by public institutions.
The text of the Legal Framework also brings changes to Supplementary Law No. 123, dated December 14, 2006, regarding investments by also called angel investors, providing for legal arrangements that have already been practiced in startups scenario. In addition to rules relating to conditions for remuneration and conversion of contributions, the law expressly determines that these investors may, even without effectively acting in management, participate in an advisory manner in deliberations, as well as have access to the status of the company’s accounts, balance sheets and cash.
Another innovative solution was to expressly provide for the creation of the “Regulatory Sandbox”, an experimental regulatory environment, where regulatory bodies and agencies of the public administration can ease or remove the incidence of regulations within their respective sphere of competence in order to allow companies to launch products/services with less bureaucracy.
Regarding the participation of startups in biddings, the new law created the possibility of a startups bidding category for public administration, with the objective of promoting innovation in the productive sector and to resolve demands that require a technology solution. A simplified and priority regime for applying for registrations of trademarks and patents was also created with the National Institute of Industrial Property (INPI).
Another very important aspect brought by the Legal Framework was the simplification of Corporations with annual billings lower than BRL 78 million, which may have only one officer, effective the publications provided for in the Corporation Law electronically and replace traditional corporate books by electronic records.
Some tax and labor issues were not addressed by the new law, such as the possibility of using stock options, which will subject to specific legislation.
The new law enters into force on September 1st, 2021.
Changes brought by DREI Normative Instruction No. 55
In order to simplify and modernize certain requirements and procedures related to business registration, the National Department of Business Registration and Integration (DREI) published, on June 10, 2021, Normative Instruction DREI No. 55 (“NI 55”). NI 55 modified the Normative instructions DREI No. 81/2020 and 82/2021, benefiting directly business companies, cooperatives, individual entrepreneurs and Individual Limited Liability Companies (EIRELI), and facilitating the processes of opening and registration of business acts.
As well as the Provisional Measure No. 1040/21 (“PM for the Business Environment”), dated March 29, 2021, the innovations brought by NI 55 are intended to reduce bureaucracy on corporate processes that entrepreneurs in Brazil undergo on a daily basis.
NI 55 modernized the rules related to the regulation of corporate names of business companies, excluding the prohibition of filing similar corporate names and creating the possibility for individual entrepreneurs, EIRELIs, business companies and cooperatives to use the registration number in the National Register of Legal Entities (CNPJ) as a business name (provided that it is accompanied by the identification of the corporate or legal type, when required by law). Thus, the analysis of the identity between denominations by the Boards of Trade will consider the corporate names as a whole (excluding only the expressions related to the legal type), so that only the filing of a business name identical to another already registered will be prohibited. Homograph names will also be considered identical.
These changes aim to eliminate human analysis and enable automatic analysis mechanisms, making the procedure for the filing of acts faster.
With the amendments of NI 55, the use of Visual Law techniques, including graphic elements such as images, flowcharts and animations, as well as paper stamps (timbre) and watermarks, is also allowed in acts submitted for registration with the Boards of Trade. Visual Law is a Legal Design solution that uses visual elements to make legal content clearer and more understandable to the general public.
Another determination of NI 55 is that Boards of Trade must seek to adopt the reception of documents electronically signed by a third-party system or Signature Portals and that they may enter into agreements, contracts or similar terms with certifying authorities for the issuance of digital certificate. In this sense, NI 55 also reiterates the possibility of the use of any type of digital certificate accredited by the Brazilian Public Key Infrastructure (ICP-Brasil) or other means that ensure the proof of electronic documents integrity, and, further, that documents presented in an electronic format, in case it is not possible to have the authenticity of their signatures carried out through consultation, must be attached to a declaration of their veracity electronically signed by the applicant (partner, owner, administrator etc., or, also, accountant or lawyer), under his/her personal responsibility.
Finally, one of the main changes introduced by NI 55 was the waiver of notarization and authentication of document copies by the register office in acts presented for filing with the Board of Trade. The authentication of a copy, when the act requires the original, may be performed by the Board’s server, by comparing the original and the copy, or even by a lawyer or accountant of the interested party.
Our office is at your disposal to clarify any eventual doubts in this regard and to assist you in the most diverse projects.
ETTORE BOTTESELLI ELECTED PRESIDENT OF THE UIA BRAZILIAN COMMITTEE
Today, Ettore Botteselli, senior associate of DDSA – De Luca, Derenusson e Schuttoff Advogados, was elected President of the Brazilian Committee of UIA – Union Internationale des Avocats.
UIA is the world’s largest international network of lawyers with 92 years of activity. At this moment, through its collective members (bars, federations, and associations) and individual members, UIA brings together two million lawyers from more than 110 countries.
THE INJUNCTION BY SUPREME COURT (STF) AND THE PROVISIONAL MEASURE 936/2020 LAY OFF ALTERNATIVES
On April 6 2020, an injunction by the Supreme Court (STF) was given in the context of a Direct Action of Unconstitutionality – proceeding # 6363/2020 – filed by Rede Sustentabilidade party. The decision prevents the use of individual agreements to implement the reduction of wages and working hours and the suspension of employment contracts as established by the Provisional Measures (PM) 936/2020.
According to Ricardo Lewandowski – appointed rapporteur, who issued the mentioned injunction – individual agreements to reduce wages and suspend contracts should only have full legal effects after the manifestation of the employees’ union. Therefore, while the decision is in force, individual agreements are only valid after collective bargaining with the union or if the union and the respective federation (or confederation) tacitly agree with them after due notification.
Companies and lawyers know by experience that collective bargaining can be a rather complex and not very agile process. Many unions do not even have the resources to negotiate during current isolation and social distance, which may force companies to take greater financial and legal risks, or more drastic measures such as massive terminations.
There is an expectation of a quick reform of such decision by the STF Plenary, with the anticipation of the judgment section to next April 16.
DDSA will be monitoring ADI 6363/2020 and is available to advise clients on this matter.
COVID-19: BRAZILIAN ENVIRONMENTAL DEPARTMENTS SUSPENDED DEADLINES FOR ADMINISTRATIVE PROCEEDINGS
With the purpose to reduce the impacts of COVID-19, Federal and State Environmental Departments suspended the deadline for the filing of defenses and appeal related to administrative procedure in course before such authorities.
Please note that each State authority set forth environmental specific and different regulations about such suspension, as well as in connection with the functioning of each department during the “quarantine”, that shall be observed by interested parties.
In addition, local authorities have also issued isolation and protection measures in view of the pandemic, within its jurisdiction. Therefore, it is important to check local environmental rules that may apply to your businesses.
Such suspension is only applicable to legal term for filing defenses and appeals. The term for the completion of any other environmental obligation, including the actions required for the validity of an environmental licenses, or those part of the investigation or remediation plans, as well as the ones provided for in consent decrees or set forth in any other agreement with the relevant authorities.
Federal Agency – IBAMA – has issued a Public Statement informing that all relevant environmental obligations shall be completed by the interested Party in due term, and if in any case the obligation is impaired in view of the COVID -19 crisis, such action can be suspended and resumed as soon as possible. IBAMA must be informed of all delays, with proof and evidence of the circumstance that hinders the environmental measures to take place within the term agreed.
At the State level the orientation is in line with IBAMA and any delays shall be fully documented and informed to the environmental authorities. Extension applications will be reviewed on a case-by- case basis.
We from the Environmental Department of DDSA – De Luca, Derenusson, Schuttoff & Advogados are welcome to assist You, please do not hesitate to contact us.
NEW LABOR MEASURES DUE TO THE CORONAVIRUS PANDEMIC
REDUCTION IN WAGES AND HOURS OF WORK AND SUSPENSION OF EMPLOYMENT CONTRACTS
PROVISIONAL MEASURE No. 936 OF APRIL 1st, 2020
Provisional Measure 936/2020 institutes the Emergency Employment and Income Maintenance Program and provides on supplementary labor measures to confront the state of emergency and the public health emergency resulting from the coronavirus (COVID-19).
The Provisional Measure creates the Emergency Employment and Income Preservation Benefit (“Benefit”), payable by the Government in the following events: (i) proportional reduction in the hours of work and wages; and (ii) temporary suspension of employment contracts.
The DDSA Advogados Labor Law team prepared a complete table of contents with all the possibilities for receiving the benefit.
We explain that the text above is not exhaustive and neither represents nor substitutes a specific recommendation based on analysis of the case. The law firm DDSA Advogados is available to guide its clients with respect to the main legal measures adopted to confront the pandemic and its effects on the employment relationships, as well as with respect to the applicability of Provisional Measure 936/2020.
CORPORATE REPORT PROVISIONAL MEASURE 931 (COVID-19)
Change of deadline and forms of holding general meetings and its registrations before the boards of trade
The Provisional Measure no. 931, dated March 30, 2020 (“Provisional Measure”), change several provisions of the Brazilian Civil Code and Corporation Law with the scope of adapting the Brazilian corporation legislation to COVID-19 current context and, consequently, the public authorities’ recommendations of social isolation.
The main points of Provisional Measure are the following:
i. Approval of Accounts
The company whose fiscal year ended on December 31, 2019, may hold its annual general shareholders’ meeting or quotaholders meeting to approve its accounts, until July 31, 2020, instead of March 31, 2020.
Regarding the public held companies (listed companies), Brazilian Securities Commission (“CVM”) will establish the date for presentation of financial statements.
The management terms of the companies’ management members (managers, officers, members of the board of directors) will be extended, as the case may be, until the companies hold their next annual general shareholders’ meeting and quotaholders meeting, or the correspondent board of directors meeting.
In relation to the corporations, subject to a different provision in the bylaws and, as applicable, the board of directors will be responsible to resolve, ad referendum, urgent matters that are under the shareholders’ general meeting competence.
iii. Dividends in Corporations
In respect to the corporations, the board of directors, if any, or the board of officers may, regardless any amendment to the bylaws, declare dividends, until the annual shareholders’ general meeting is held by the company.
iv. Public Held Companies (Listed Companies)
CVM may, exceptionally during the 2020’s fiscal year, extend the terms establish by the Brazilian Corporation Law to the public held companies.
v. Virtual Meetings and Remote Participation
An important measure set forth in the Provisional Measure is the possibility to hold virtual meetings by public held companies, as well as, the authorization for the shareholders to remotely attend to general shareholders’ meetings and quotaholders meetings, in closely held companies.
Concerning the closely held companies, the Provisional Measure modifies the Brazilian Civil Code and the Brazilian Corporation Law, in order to authorize the shareholder/quotaholder to remotely attend to the general shareholders’ meeting in corporations, limited liability companies and associations. However, this provision is subject to the subsequent regulation by the National Department of Business Registration and Integration of the Special Secretariat for debureaucratization, Management and Digital Government of the Ministry of Economy. Please note that this provision already exists for public held companies (listed on the stock market).
The great innovation of the Provisional Measure is the authorization of virtual meetings for public held companies, therefore, meetings held entirely digitally. However, such provision must be regulated and authorized by CVM.
vi. Boards of Trade
During the COVID-19 crises and, particularly about the restrictive measures to the boards of trade operation:
(i) the corporate acts subject to registration and executed after February 16, 2020, will retroact to the date of the document, if they are filed before the respective board of trade within thirty (30) days from the date on which the respective trade board normalizes its regular operation. Please note that some boards of trade, which have digital registration form continue to operate normally.
(ii) the requirement of prior filing of an act for the issuance of securities and for other legal transactions is suspended as of March 1, 2020. The filing of such acts must be made before the respective board of trade within thirty (30) days from the date on which the respective trade board normalizes its regular operation.
DDSA Corporate team is available to clarify any doubts or assist in any matter related to corporate aspects.
DDSA NO LATIN LAWYER 250 | CLIENT- CENTRED EXCELLENCE
DDSA – De Luca, Derenusson e Schuttoff Advogados was recognized by the guide of the international Latin Lawyer 250, in its 2020 edition, as one of the best firms in Latin America. We were recognzed as a “CLIENT-CENTRED EXCELLENCE” due to our focused attendance of the clients’ needs. We were appointed in the areas of Aviation, Corporate and M&A, Labor and Tax, led respectively by partners Ana Luisa Derenusson, João Cláudio De Luca and Guilherme Filardi, Leila Pigozzi Alves and Claudia Derenusson Riedel and Sabine Ingrid Schuttoff. We thank the trust of all clients and partners for this achievement, which proves our daily dedication and commitment to ensure the best results.
RELEASE: COVID-19 AND HOME OFFICE
Due to the COVID-19 pandemic outbreak and the necessary care and responsibility towards our lawyers, family members and clients, we inform that DDSA – De Luca, Derenusson and Schuttoff Advogados will be working in home office until April 1, 2020. We guarantee the fulfillment of all commitments to our clients, ensuring the continuity of the efficiency and promptness of our services and maintaining the excellence in quality that is our brand. Our team will normally respond to demands via video and phone conferencing, emails and our PBX will continue to function normally at +55 113040-4040.
LACCA: Thought Leaders 2020 CORPORATE | M&A
João Cláudio de Luca, partner at DDSA – De Luca, Derenusson, Schuttoff Advogados, was recognized for his work in Corporate Law and M&A at LACCA: Thought Leaders 2020. The international publication highlights those lawyers who stood out in their practice area as reliable and excellent leaders. We thank all clients and partners for this achievement.
Brazilian court refuses to recognise BVI proceeding on public policy grounds
Wednesday, 13 July 2016 (5 hours ago) by Jack Barton
Brazil’s Superior Court of Justice has said it won’t recognise the liquidation of British Virgin Islands company Gutmen Investment Corporation, citing risks to the judicial recovery of the company’s Brazilian subsidiary.
In a judgment released on 4 July, a board of 14 ministers dismissed the application from Gutmen Investment Corporation for recognition of the appointment of Mark McDonald of professional services firm Grant Thornton as liquidator by the BVI’s High Court of Justice.
Recognition would have given McDonald rights through a shareholder agreement over Brazilian company Manacá, a farming product wholesaler which is 99.5 per cent owned by Gutmen.
Manacá, which has been in judicial recovery proceedings in the Civil Court for the District of Ibaiti in Southern Brazil since June 2013, contested the recognition with counsel from De Luca, Derenusson, Schuttoff e Azevedo Advogados.
Gutmen was declared bankrupt by order of a BVI court in July 2012, following a default on payments to German bank Gesellschaft fuer Absatzfinanzierung (GEFA), from which it had attained a loan for the purchase of an aircraft in the US.
GEFA, described as Gutmen’s only significant creditor, seized the aircraft but its value did not offset the entirety of the outstanding debt. Gutmen’s other assets include its controlling stake in Manacá, which is valued at 750 million reais (US$76 million) and is currently undergoing a restructuring led by São Paulo firm Oliveira, Carvalho & Ranzini Sociedade de Advogados.
Gutmen, advised by Brazil’s Krikor Kaysserlian Duarte e Forssell Advogados Associados, held that it met all requirements of universality under Brazil’s civil code to have the liquidation, and McDonald’s status as liquidator, recognised.
Manacá, whose other creditors include agricultural companies and labour groups, argued that recognising the BVI proceeding would give Gutmen priority creditor status, which is not intended by Brazilian legislation.
Manacá cited Brazil’s civil code, under which orders of foreign courts should be recognised providing they are not contrary to national sovereignty, public order and morality.
Manacá’s creditors are currently considering a payment plan, and the company’s counsel argued that disrupting this to give priority to a non-operating holding company and the claims of one foreign creditor, GEFA, would be in violation of public order and sovereignty.
They further held that such priority would never be allowed if all proceedings were taking place in the Brazilian court system.
The court held that it had no grounds to challenge the decision of the foreign court but unanimously held that recognition of this decision, and therefore subordination of the Brazilian proceedings, would be an offence to national sovereignty.
Luis Augusto Roux Azevedo, of De Luca Derenusson, says the Brazilian court agreed that it was important to protect the creditors in the Brazilian proceeding, as it was unclear how McDonald would treat the judicial reorganisation if recognised as liquidator.
“We argued that this was in violation of the principle of public order, as we do not know what the BVI liquidator intends to do with the Brazilian company and what this means for the Brazilian creditors,” says Azevedo.
He adds that “this decision is highly significant because the Brazilian court said it was its duty to protect the creditors who were subject to the Brazilian proceeding.”
However, McDonald described the court’s decision as concerning. “I believe the judgment is concerning for international investors because it demonstrates that the Brazilian courts will not readily protect their interests.”
His lawyer, Henrique Forsell of Krikor Kaysserlian, adds that “there is nothing in the application that requests that the foreign creditors of Gutmen be paid by Manacá. Creditors of Gutmen have to be paid with assets available to Gutmen. Creditors of Manacá will be paid with assets available to Manacá.”
McDonald intends to ask the court to clarify certain aspects of the judgment, including the payment of dividends from Manacá to Gutmen, the time period over which the court will refuse to recognise the Gutmen proceedings, and the approval process for the sale of the BVI company’s assets. He also plans to appeal the decision.
Gutmen Investment Corporation v Manacá SA Armazens Gerais EAdministração
Counsel to Gutmen Investment Corporation
Krikor Kaysserlian Duarte e Forssell Advogados Associados
Henrique Forsell and Octaviano Duarte Filho
Counsel to Manacá
Luis Augusto Roux Azevedo and Leandro Araripe Fragoso Bauch
Oliveira, Carvalho & Ranzini Sociedade de Advogados
Emmanoel Alexandre de Oliveira
DDSA WIN THE DEAL OF THE YEAR
We are very proud to announce that DDSA is the winner of the ‘DEAL OF THE YEAR’ of the English directory “LATIN LAWYER”.
LUIS AUGUSTO AZEVEDO ROUX and FERNANDO LOBO, partners of the restructuring and bankruptcy of DDSA received the award for the legal restructuring of the construction company OAS, where DDSA team acted for the representative of the trustee, Alvarez & Marsal Brazil, among other players of the operation.
DDSA Chambers and Partners 2016
We proudly inform our clients and friends that DDSA was appointed by the important directory Chambers and Partners, in its Global 2016 edition, as one of the most important offices of Brazil in the areas of Insurance and Tax. Once again we thank our customers, partners and team for more such recognition.
DDSA AT LL 250 -LATIN LAWYER
We were nominated one more time by the recognized directory Latin Lawyer as one of the best law firms in Latin America. We were recognized for our customized and efficient service and for our capability to globally lead with a client’s demand.
ANA LUISA DERENUSSON AT ICGL
Ana Luisa Derenusson is the author of the aviation Brazilian Chapter of ICGL- International Comparative Legal Guides, one of the most recognized legal directories which brings experts analysis about the legislation around the world regarding an specific subject.
LEILA PIGOZZI ALVES AT LATIN LAWYER REFERENCE
Ana Luisa Derenusson é a autora do capítulo do Brasil sobre aviação do ICGL- International Comparative Legal Guides, um dos mais renomados diretórios jurídicos que traz a análise de experts do mundo todo sobre a legislação de uma determinada área.
ANA LUISA DERENUSSON WAS NOMINATED BY CLIENTS CHOICE 2016
The partner ANA LUISA DERENUSSON, was the only lawyer in Brazil appointed by the CLIENT CHOICE AWARDS 2016 in the aviation area.
DDSA IS IN THE SHORTLIST FOR THE LATIN LAWYER “DEAL OF THE YEAR 2016” AWARDS
DDSA IN CORPORATE-INTL
DDSA is in the special issue of the end of the year of CORPORATE-INTL magazine. Partners JOÃO CLÁUDIO DE LUCA and GUILHERME FILARDI talked about the success of the firm’s performance in 2015 in various sectors and the prospects of the future of Brazil and the new opportunities in the legal market.
DDSA IN LL REFERENCE: CORPORATE GOVERNANCE
Partners JOÃO CLAUDIO DE LUCA and GUILHERME FILARDI of the Corporate and M&A department, are the authors of Brazilian Corporate Governance page in Latin Lawyer Reference, which provides information about the main rules related to compliance issues and anti-corruption rules for domestic and foreign companies in Brazil.