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private law > Midterm 1 - Private Law > Flashcards

Midterm 1 - Private Law Flashcards

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1
Q

Profitability

A

> distribution of dividends

>you should create a partnership to develop profitable activities

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2
Q

Philantropy

A

“>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 “

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3
Q

Foundation

A

“>you need a high amount of money to create one
>highly beurocratic
>not supervised by ministerio publico”

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4
Q

Association

A

“>easier to create
>don’t demand much money
>not supervised by MP”

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5
Q

“Can founders and directors of associatons and

foundations be remunerated?”

A

as a pro-labore according to the market values

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6
Q

Can I conduct any economic activity?

A

“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…

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7
Q

Disadvantages of working as a natural person:

A

“>higher taxation

>unlimited liability “

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8
Q

“Can I work as a natural person,

or do I have to create a legal entity?”

A 
"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)"
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9
Q

Can I work alone or do I need a partner?

A

“>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”

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10
Q

As a natural person can I hire employees?

A

“>yes, you can

> 4 requisites to be considered an employee:

  • remuneration
  • personality
  • habituality
  • subordination”
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11
Q

“For tax reasons should I set up a

legal entity? What taxes do I have to pay?”

A

“>Taxation for natural persons is higher

>Legal entities have to pay: PIS/ COFINS, ICMS, IPI”

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12
Q

Can I issue invoices (“notas fiscais”)?

A

Only if you have a CPNJ (Legal entity)

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13
Q

“Can i transition from EIRELI to a partership

and viceversa? “

A

Yes

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14
Q

Are managers EMPLOYEES?

A

Not in brazilian law. Managers receive pró-labole.

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15
Q

“Are the risks in a partnership proportional to each

partners ownership?”

A

No

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16
Q

Consequences of setting up a legal entity

A

“>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”

17
Q

“Self-employed”

A

“*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”
18
Q

“Empresário individual”

A

“*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”
19
Q

“Empresa individual de responsabilidade

limitada (EIRELI)”

A

“*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
“

20
Q

Requirements for doing business in Brazil

A

“>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”

21
Q

“➔ Restrictions on foreign investment: “

A

“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”

22
Q

fields restricted to the foreign capital

A 
"
–health insurance
–shipping (maritime transport)
–journalism and broadcasting
 –mining and hydropower 
–financial institutions
 –airlines 
–rural land acquision (or border lands)"
23
Q

Foreign company doing business in Brazil

A

“>Company wit it’s headquartes in a FOREIGN country

>They can’t own 100% of a brazilian company”

24
Q

Partnerships (Sociedades)

A

“>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:
“

25
Q

“Partnerships should be set up a legal entity,

except in the case of:”

A

” >Sociedade em Conta de Participação (SPC), or

>Sociedade em Comum; unwanted by the law and treated much like natural person - NOT legal, irregual situation”

26
Q

In a two person partnership:

A

” ○ In the case of death, there is 180 days available to find another partner
○ Transformation of the partnership into a EIRELI
○ Liquidação of assets and extinção (debts, creditors and taxes must be paid before extinção)
○ In order for the “herdeiros” to become partners with a management power the social contract should have a specific clause addressing the topic
○ Essentially, herdeiros do not enter into a partnership
○ Valuation: payment of equity/ share if they do not enter in the partnership (from personal money, not the companies)”

27
Q

Partnership Withdraw

A

> Withdrawal: is one partner decides to withdraw they can only sell their shares to a non-partner with the consent of the other partners, otherwise the one leaving should sell to the remaining partners

28
Q

To start a partnership:

A

“>A social contract must be formalized

> Normally, in Brazil, the heirs can NOT become a partner. This can only happen if all ORIGINAL partners accept this.

> When leaving a partnership a new social contract MUST be established in order to exclude your name from it”

29
Q

Social Contract

A

“>made to regulate the relationship amont partners
>some clauses are mandatory and others not.
“

30
Q

Main Clauses of a Social Contract

A

“>partners qualification (name, adress, nationality etc)
>it IS possible to accept a foreign partner
>it is easier (less bureaucratic) when he lives in brazil
>foreign parteners that live abroad neew a agent/procurador to represent him in Brazil

> trade name (““firma””, ““razão social””)
>the name of the partnership
> it’s the ““official”” name, not to be confused with the ““brand””
head office (do not use home adress - dissolução irregual)
object clause/business purpose
social capital
share/equity
management
remuneration/profits distribution
admission of new partners”

31
Q

Wholly-owned subsidiary (subsidiária integral)

A

“>Partnership with only one partner
>Must establish or be transformed into a sociedade anônima
>The parent company (sociedade controladora) must be a Brazilian company, i.e. have its headquarters in Brazil”

32
Q

Intellectual Activity

A

“>profissional autônomo (pessoa física) - alone
>Eireli (personalidade jurídica, but not a legal entity/ pessoa jurídica) - alone
>Sociedade simples (pessoa jurídica) - at least 2
>Service providers with dome kind of specific knowledge, such as doctors, lawyers, engineers, teachers, professors and cultural/artistic activities”

33
Q

Business Activity

A

“>commerce, industry, manufacturing, international trade, financing
>Eireli - alone; separates personal wealth
>Empresário individual (pessoa física) - alone
>Sociedade empresária (SA or LTDA)”

34
Q

” Sociedade simples”

A

”> at least two partners
> legal entity (w/o wealth protection)
> not organised as a enterprise
> suitable for intellectual activities
> Cartório de Registro de Pessoas Jurídicas
>partners have a secondary, but illimited, liability (responsabilidade subsidiaria)
>cannot apply for judicial recovery
>cannot be declared bankrupt
>depending on the judge, a sociedade simples can be setup as a LTDA. this will provide wealth protection.”

35
Q

” Sociedade empresária”

A

“>at least two partners
>legal entity
>organised as an enterprise
>suitable of business activities
>Junta Comercial do Estado (JUCESP)
>all corporations (S.A.), by definition, are business partnerships (sociedade empresária)
>limited liability
>some wealth protection
>can apply for judicial recovery. they get more time to pay the creditors and a substantial reduction of the debts (by negotiation).
>can be declared bankrupt. in principle, this avoids the charge of the partners assets.
“

36
Q

“➢ What defines a sociedade simples ou empresária?”

A 
">gross income
># of employees
>technological structure
>profit level
>number of establishments"
37
Q

“➢ What are their differences (S. Simples and S. Empresaria)?”

A

“>only sociedades empresárias can apply for judicial recovery
>only sociedades empresárias can be declared bankrupt (somehow protect partners assets)”

38
Q

“Are the risks in a partnership proportional to each

partners ownership?”

A

No

39
Q

Businessmen (Empresários)

A

“>Businessmen (Entrepreneurs) are people who develop business activity
>It is considered businessmen who professionally conducts organized economic activity to the protection and circulation of goods and services.
>It is not considered a businessmen who develops intelectual profession of scientific or artistic nature, even with the cooperation of assistants or collaborator, unless the conduction of the profession consistutes and element of the business.”

private law (1 decks)

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