Midterm 1 - Private Law Flashcards
Profitability
> distribution of dividends
>you should create a partnership to develop profitable activities
Philantropy
“>philanthropic activities (normally related to education, environment, culture etc)
>non-profitable
>the distribution of profit is not allowed
>the entity (association, foundation) can seek profit
but cannot distribute it “
Foundation
“>you need a high amount of money to create one
>highly beurocratic
>not supervised by ministerio publico”
Association
“>easier to create
>don’t demand much money
>not supervised by MP”
“Can founders and directors of associatons and
foundations be remunerated?”
as a pro-labore according to the market values
Can I conduct any economic activity?
“a. services
b. commerce*
c. manufacturing/ industry*
d. agribusiness
e. real estate
f. international commerce*
g. digital economy
h. financial activity*
* can work as a natural person, but will not be able to fulfill bureaucratic demands like invoice, environmental authorization
> Sometimes you need a legal entity (pessoa jurídica), not a natural person (pessoa física)
Financial activity needs authorization from the central bank
Regulated activity: CRM, OAB…
Disadvantages of working as a natural person:
“>higher taxation
>unlimited liability “
“Can I work as a natural person,
or do I have to create a legal entity?”
"When selling a product/ service, it is required an invoice issuing; a natural person is not allowed to issue an invoice (nota fiscal) Tax evasion (sonegação de imposto): commerce, selling of goods requires issuing of ICMS (Imposto sobre operações relativas à Circulação de Mercadorias e sobre prestação de serviços)"
Can I work alone or do I need a partner?
“>sometimes the law imposes the creation of a partnership that must be set up as a legal entity
> this is the case for banks and financial institutions (corportations - “Sociedades Anônimas”)
> if it is not the case, in principle, you can work alone”
As a natural person can I hire employees?
“>yes, you can
> 4 requisites to be considered an employee:
- remuneration
- personality
- habituality
- subordination”
“For tax reasons should I set up a
legal entity? What taxes do I have to pay?”
“>Taxation for natural persons is higher
>Legal entities have to pay: PIS/ COFINS, ICMS, IPI”
Can I issue invoices (“notas fiscais”)?
Only if you have a CPNJ (Legal entity)
“Can i transition from EIRELI to a partership
and viceversa? “
Yes
Are managers EMPLOYEES?
Not in brazilian law. Managers receive pró-labole.
“Are the risks in a partnership proportional to each
partners ownership?”
No
Consequences of setting up a legal entity
“>CNPJ: issued by Receita Federal do Brasil for taxation purposes
> Taxation: corporate income tax (taxation on the profit (not on the gross value)) and other specific taxes (like PIS/COFINS, ICMS, IPI) that only legal entities must pay
> Wealth protection (partially): reduces the risk of private wealth loss
> It is advisable to have an establishment”
“Self-employed”
“*Suitable for service providers
- Cannot run commercial and / or manufacturing activities
- No labour rights (since it is not an employee)
- Taxed as an individual; cannot issue invoice, no wealth protection
- NOT a legal entity”
“Empresário individual”
“*Natural person with some legal entity advantages (CNPJ, invoice issuing, taxed as a legal entity but need to keep accounting strict) but this is NOT a legal entity
- No wealth protection
- You must create a bank account in the name of the business”
“Empresa individual de responsabilidade
limitada (EIRELI)”
“*It IS a legal entity
*EIRELI has an owner (titular), it is not a partnership
*It is necessary to invest at least 100 minimum wages
*EIRELI is a better alternative if one has money to invest and face risks on their job, otherwise it is best to be an empresário individual
*You must create a bank account in the name of the business
“
Requirements for doing business in Brazil
“>Be over the age of 18 (or emancipated) if in a management position;
> one can be a partner at any age
> Personal ability: a person declared incapable cannot do business alone
> NOT legally prevented, legal preventions:
○ bankrupt without paying the debts (falido não reabilitado)
○ public agents (judges, prosecutors)[CAN BE PARTERS]*
○ military (active)*
○ congressmen (deputy, senator)*
*These cannot be managers, but can be a partner without management power”
“➔ Restrictions on foreign investment: “
“a foreign capital depends on the nationality of the investor (the law only foresees national capital)
- a company can only be Brazilian if its head office is established in Brazil and according to Brazilian law// some companies’ subsidiaries had their headquarters in Brazil, thus the (e.g.) Renault Brasil is a Brazilian company, even though it is a multinational group
- for individuals as investors: citizenship and place of residence
- The must setup a legal entity
the outdated concept of “Brazilian company of foreign capital” doesn ́t exist anymore–now we have “Brazilian companies” and “foreign companies” only”
fields restricted to the foreign capital
" –health insurance –shipping (maritime transport) –journalism and broadcasting –mining and hydropower –financial institutions –airlines –rural land acquision (or border lands)"
Foreign company doing business in Brazil
“>Company wit it’s headquartes in a FOREIGN country
>They can’t own 100% of a brazilian company”
Partnerships (Sociedades)
“>At least two partners working together, they can be natural persons or legal entities; e.g.: Nestlé Brasil cannot own 100% of Kopenhagen
> “One person partnership” (“sociedade unipessoal”) is a controversial concept in Brazilian law
> Partnerships should be set up a legal entity, except in the case of:
“
