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April 30, 2019

Published Complementary Law that implements the Inova Simples, a simplified system for formalization of startups

Technology & Innovation

After approval by the National Congress, Supplementary Law n. 167 was published on April 25, 2019. Among other measures, this law implements a special regime for incorporation and dissolution of companies – named “Inova Simples”. The initiative, which creates a special process specifically applicable to the incorporation of innovative companies, has the clear scope of facilitating the creation and development of incremental and/or disruptive business initiatives, self-declared as “startups”.

Therefore, the law defines “disruptive startups” as companies that create something totally new and “incremental startups” as innovative companies that aim at improving systems, methods, business models, production, services or products. According to the Supplementary Law, startups typically “develop their innovations under uncertain conditions that require constant testing and validation, including through provisional experimental marketing, before proceeding to full trade and revenue generation.”

The main practical feature of Inova Simples is the creation of a fast track process for incorporation and dissolution of companies, integrated with the already existing system, REDESIM (National Network for Simplification of Registration of Company and Business Legalization). After completing the registration process, a specific CNPJ (National Corporate Taxpayers Registry) number will be automatically generated. This number may also be automatically terminated upon self-declaration, in the REDESIM portal, that the Inova Simples company did not achieve the expected results. The updated system will also contain an optional field for automatic communication of inventive content from the scope of business initiative to the Brazilian National Institute of Intellectual Property (INPI). In this way, the startup will be able to file applications for the registration of its trademarks and patents, what should be processed in summary rite.

Another interesting aspect is that resources contributed to the company will not be considered income, provided that they are exclusively used to back the costs associated with the projects developed by the startup. In addition, the experimental trade of the service or product of the company Inova Simples should comply with the limits set forth in the Supplementary Law for the MEI (Individual Microentrepreneur) - meaning that it shall not exceed the amount of R$ 81,000.00 (eighty-one thousand reais) in the previous calendar year.

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