Brazilian President Jair Bolsonaro issued yesterday a “Medida Provisória” (roughly translated “Provisional Measure”), a presidential act that can unilaterally and instantly enforce changes in legislation for up to 120 days and must be deliberated in congress on whether it will or not become permanently in force as a law. The measure changes articles of the law that governs the public registration of companies and correlated.

Amongst the changes, the ones that stand out are:

(i) The maximum term of 5 business days for the Boards of Trade (a.k.a. Commercial Registries) to decide about the filing of the act of incorporation of corporations (“sociedades anônimas”) and of acts of transformation, mergers and spin-offs of entities, changes on consortium or group of companies, under penalty of, upon request of an interested party, the acts being deemed registered;

(ii) The maximum term of 2 business days for the Boards of Trade to decide about the filing of the act of incorporation of the other entities, also under penalty of, upon request of an interested party, the acts being deemed registered; and

(iii) Automatic registration of acts of incorporation of the other types of entities if certain requirements are met, such as previous approval of viability of the company’s corporate name, headquarters location and use of the standard articles of association to be provided by the National Department of the Commercial Registry.

There are a few peculiarities to be considered, such as, the stipulation that the technical analysis of the filed documents be subsequently analyzed and, yet, the need of preparation of the Boards of Trade (one for each Brazilian state) to attend the new requirements contained in the Provisional Measure. Nevertheless, hopefully the measure, even if it deservers further evolution, will be an important first step towards the debureaucratization and reduction of time of the process of incorporation of companies in Brazil, notoriously slow and demanding.

A change on the mindset of all stakeholders on this type of process will be required. This model has been adopted with success in other countries.

Marco Mello Cunha is an attorney specialized in Corporate Law from Tess Advogados, in São Paulo.

* This article should not be considered as a legal opinion, being used only for informative and debate purpose.