Legal Framework for Startups
The vote on the Legal Framework for Startups (Bill 146/19) was concluded this Tuesday (11.05), in the House of Representatives. As the evaluation carried out by the representatives dealt only with the amendments presented by the Federal Senate, the text does not need to return to the Senate.
In the coming days, Bil 146/19 will be sent to the Presidency of the Republic, which will have up to 15 working days to: (i) fully approve the bill, subject to sanction; or (ii) may veto it in whole or in part. In this case, the veto will be considered in a joint session, within 30 days of receipt, and can only be rejected by the vote of an absolute majority of Representatives and Senators.
According to the Legal Framework, business or corporate organizations may be classified as startups if: (i) they work with innovation applied to products, services or business models; (ii) their gross revenue is up to R$ 16 million in the previous year and up to ten years of enrollment with the CNPJ; and (iii) if they declare, in their articles of organization, their use of innovative models or that fall under the special Inova Simples regime, regulated by Supplementary Law No. 123/2006.
Individual entrepreneurs, individual limited liability company, business companies, cooperative companies and even simple companies may be characterized as startups.
With regard to investment instruments in startups, the bill contemplates capital contribution of both individuals and companies, without necessarily participating in the share capital and in the direction and administration of the newborn company. The investor will only be considered a member, shareholder or partner of the startup after converting the contribution to capital instrument into effective and formal equity in the company.
The Legal Framework was concerned with stimulating investments by creating a regulatory framework with greater legal certainty, which is why investors will not be liable for any debt of the startup from the use of the institute of disregarding legal personality, even in court-supervised reorganization. Liability may only occur in cases of fraud or investment simulation.
Another way for startups to receive funds regulated by Marco Legal was directed to companies that have investment obligations in research, development and innovation, linked to grants of concessions or delegations signed through regulatory agencies. In this case, the investment can take place: (i) through equity funds, which Law No. 13,800/2019 deals with, aimed at innovation; (ii) equity investment funds (FIP), in the categories of seed capital, emerging companies and companies with intensive economic production in research, development and innovation; and (iii) from programs, public notices or competitions managed by public institutions designed to finance, accelerate and promote the scalability of startups.
Bill 146/19 regulated the regulatory sandbox in order to promote the exploration of experimental innovations by startups with more freedom of action. This is an experimental regulatory environment in which startups operating, for example, in regulated sectors, may benefit from the temporary suspension of certain rules required from companies operating in the sector by the respective regulatory agency.
The Legal Framework also regulates the hiring of startups by the public administration through specific bidding rules. The objective is to resolve public demands that require an innovative solution with the use of technology and to promote innovation in the productive sector through the use of the State’s purchasing power.