Starting a business: strategic decisions impact the business since the foundation phase

EXPERT OPINION

Starting a business: strategic decisions impact the business since the foundation phase


Start-up stage involves decisions that must be based on efficient planning


By Cássia Calixto


After the feasibility of starting a company is deferred, it is necessary to initiate the procedures for the effective formation and formalization of the new business.



Putting into practice the whole strategy designed in the planning phase involves processes that will guarantee legal compliance and add competitive advantages when important issues have already been well outlined and adequate to the objectives.

One of the barriers to overcome is the complexity of the Brazilian business environment. According to the World Bank's Doing Business 2020 ranking, among 190 nations, Brazil occupies the 138th place when evaluating its procedures for starting a company.

Brazil has been stepping towards improvement. According to the Mapa das Empresas (or Map of Companies, in a free translation) of the Ministry of Economy, in 2020, the average period to open a business fell to 2 days and 13 hours, while in the previous year it was 4 days and 11 hours, a reduction of 43%.

Recently, the Federal Government introduced Balcão Único, a project that promises the opening of a company in a faster and less costly way. The initiative is in force in the city of São Paulo and will be extended to the municipality of Rio de Janeiro, with subsequent expansion throughout the country. In practice, it is still early to assess whether this process will have significant impacts.

However, in the current context, it is fundamental to count on a thorough study of opportunities and specialized support to deal with the obstacles that are characteristic of the Brazilian economy, in order to achieve the desired profitability.

Here is a list of processes that may seem merely operational, but which must be well aligned with the objectives and supported by a coherent strategy.


1. Legal nature

At this stage, definitions about the type of activity, market objectives, corporate structure and size are already established. The combination of these items will determine which legal nature (Corporation, Limited Liability Company - “LTDA”, Individuals Limited Liability Company - “Eireli”, Individual Business Entity - “EI”, and Individual Taxable Person - MEI”) best suits the business, and this classification may represent a reduced taxation burden.


2. CNAE

The National Classification of Economic Activities (Classificação Nacional de Atividades Econômicas - "CNAE") is a categorization that establishes which segment the company is part of and which operations it can perform as a main and secondary activity.

From this definition, it is determined which taxes the company will pay and which accessory obligations it must comply.


3. Corporate name

The corporate name (“razão social”) is the name adopted for the exercise of the company. The name must be different from any other already entered in the same registration.


4. Location

The facility address must meet the rules for the activity. This consultation is mandatory in some locations and it is always recommended to avoid inconvenience and unnecessary expenses that wrong choices may cause.


5. Bylaws of the incorporation

The bylaws of the incorporation conceive the legal entity, defining its rights and duties and detailing provisions related to the partners. Only after the filing of this document with the Board of Trade, and its proper publication, does the company acquire the legal personality that makes it capable of functioning.


6. Records, registrations and applications

These are the required steps for starting a business, which may vary according to the company's activity:

  • Registration with the Board of Trade or relevant agency (Registry Office of Legal Entities of Rio de Janeiro “RCPJ” or professional association agencies);
  • Registration of Corporation Taxpayer (“CNPJ”), Social Security (“INSS”) and Guarantee Fund ("FGTS");
  • State, local registration and business permit;
  • Health permits, environmental permits and alike (depending on the activity and location of the company);
  • Licenses in class councils (Medical Regional Council “CRM”, Architecture and Engineering Regional Council “Crea”, etc.);
  • Fire Department Certificate.

7. Regulatory issues

Some business areas must also meet the requirements of regulatory agencies, such as the National Electric Energy Agency (“Aneel”), the National Telecommunications Agency (“Anatel”), the National Petroleum, Natural Gas and Biofuels Agency (“ANP”), the National Agency Health Surveillance (“Anvisa”), among others.

For the performance of regulated activities, it is also necessary to receive the endorsement of the respective class agency, such as, for example, the health, accounting, engineering, architecture, and real estate brokerage sectors.

Banking companies, credit unions, insurance companies and foreign companies are subject to prior approval by government agencies and entities for registration.


8. Tax classification

For companies starting their activities under the most appropriate tax system, it is worth analyzing the options, considering the segment, size, corporate structure and estimates of revenues, expenses, and profitability margin. The analysis of the variables will be able to identify opportunities for reducing tax costs.



9. Digital certificate

Currently, the digital certificate is increasingly required to comply with the obligations of a legal entity. Therefore, the incorporation of the company must be followed by obtaining the digital certificate, so that no obligation is left unattended, avoiding penalties.


Foreign company: opening a branch or creating a company with foreign capital?

Each case must be analyzed in a particular way, but, in general, legalizing a foreign company subsidiary involves more procedures than the opening of a Brazilian company with foreign capital.

Foreign capital can freely enter Brazil, with some exceptions and restrictions. And the creation of a company from this source of capital will basically require the same procedures and steps already mentioned for starting a company.

Whatever the business strategy, it is recommended to hire local accounting, tax and legal support to guide the incorporation of the business.


Expertise in advising business implementation

Going through this moment of the company with the support of a partner who has expertise in supporting the implementation of national and foreign businesses ensures an agile, efficient, and compliant opening process.

Domingues e Pinho Contadores has a team of experts who work together with the client in designing strategies and practices that will help the business to establish itself on a solid basis and achieve the best results from its incorporation.

How DPC may help your company?

Domingues e Pinho Contadores has specialized team ready to assist your company.
Contact us by the e-mail dpc@dpc.com.br

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