On 14 March 2019, Provisional Measure 876/2019 was published. The Provisional Measure substantially improves the speed with which certain businesses and corporate documents can be registered at Brazil’s Company Registries (Boards of Trade or Juntas Comerciais). This is in line with President Bolsonaro’s commitment to improving Brazil’s business environment.
Provisional Measure 876/2019 introduces two main changes:
- Sole shareholder companies (EIRELIs) and limited liability partnerships (sociedades limitadas), and documents related to them,
will be automatically registered with the Companies Registries upon filing if two basic requirements are met;
- copies of the documents will no longer need to be notarised.
Automatic company registrations
Registrations will be deemed to be automatically registered if:
- prior consultations for the business name and the viability of the location from where the business will operate are conducted; and
- the request is made using a template document issued by the National Department of Company Registrations and Integration (DREI).
After registration is granted, the documents will be analysed within two business days. If the Companies Registry identifies a material error (erro insanável), the registration will be cancelled. However, if the error is merely formal (erro sanável), then the party will be allowed to refile without cancellation of the registration.
The rules applicable to automatic registration will not apply: to the registrations of corporations (sociedades anônimas); to transformations, acquisitions, mergers and spinoffs of any companies; and to the registration of consortia and corporate groups, as well as documents relating to the preceding, which continue to be deemed registered within five business days from the date the documents are filed. If, however, the Companies Registry issues a requisition within the five-day period, then the documents will not be registered until the requisition is complied with.
End of mandatory notarisation of copies
Copies of documents will no longer need to be notarised. Instead, a lawyer or an accountant may simply declare that the documents are copies of the originals or the documents may be checked by the Registry’s officer receiving the documents.
This will bring about substantive compliance savings due to the high cost of notarising documents.
According to the Explanatory Memorandum (“Exposição de Motivos” or “Statement of Reasons”) of Provisional Measure 876/2019, 96% of all filings for business registrations involve sole traders, sole shareholder companies (EIRELIs) and limited liability partnerships (sociedade limitadas). Out of these filings, less than 1% are denied registration due to material errors.
The shift towards a more business-friendly environment is also found in the Explanatory Memorandum. It refers to Law 13,460/2017 (which created the continued evaluation of public services) as well as the World Bank’s Doing Business publication (which ranks according to their ease of doing business). Importantly, the Explanatory Memorandum highlights the need to improve Brazil’s position in that ranking.
This is yet another positive step towards modernising Brazil’s legal framework and should be welcome by local and foreign businesspeople.
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Last modified: March 18, 2019