ECONOMIC FREEDOM LAW PROMOTED
The Provisional Measure - MP 881/2019, which establishes Economic Freedom in business opening processes, was sanctioned and published on the Brazilian Official Journal on Friday, September 20, 2019, becoming a national law (Law nº 13.874/2019).
Based on the principles of economic freedom, good faith and minimal state intervention, the Economic Freedom Law proposes measures that reduce bureaucracy when opening up companies in the country, especially micro and small ones, in addition to relieve some rules provided for in labor legislation.
In this respect, the new Law provides digital and simplified means for filing, sending and bookkeeping of data and information of employees and employers, as well as the creation of digital work permits (employment record cards), using the individual's CPF (individual taxpayer registry) as a means of identification. In addition, it establishes that time clock system is mandatory only for companies with more than 20 (twenty) employees, and also provides for the possibility of time clocking by exception, through labor individual written agreement or collective labor convention, so that the employee may clock in and clock out only on extraordinary hours, delays or absences, in other words, schedules not coincident with the regular workday.
Regarding business aspects, this Law encourages the free market by exempting the obligation to license (environmental, sanitary and operating) for low risk activities, and establishes that the government authorities should set deadlines for responding to business license, permit or registration requirements, under the risk that they will be automatically approved, if the deadline expires, also allowing the opening and closing of companies by the board of trade. In addition, it limits the power of the state by creating the figure of regulatory abuse, in order to protect the entrepreneur from actions or omissions by government authorities to harm him.
It also makes economic activity more flexible by restricting its exercise hours only to avoid noise pollution and disturbance of peace, and allowing the free definition of price of products and services in unregulated markets. Moreover, it provides for hypotheses of disregard of legal personality, that is, abuse of legal personality by misuse of purpose or confusion of property. And, finally, it regulates the possibility of having only one partner in the limited companies.
Therefore, Law nº 13.874, of September 20, 2019, aims to reduce bureaucracy and facilitate the opening of companies and hiring employees, remaining now that the news provided for in the Law of Economic Freedom be regulated by the pertinent bodies.
SAEKI ADVOGADOS is at your disposal for any clarifications regarding the effective application of Law nº 13.874, of September 20, 2019.