The Legal Framework for Re-entrepreneurship has been approved and is now headed to the Chamber of Deputies.

In a remote session this Tuesday (8), the Senate Plenary approved the Legal Framework for Re-entrepreneurship (PLP 33/2020). The vote was scheduled to take place last week, but was postponed at the request of the government leadership, which wanted to make adjustments to the text. From Senator Angelo Coronel (PSD-BA), the project was unanimously approved in the form of the substitute presented by the rapporteur, Senator Jorginho Mello (PL-SC). Now, the matter goes to the Chamber of Deputies for analysis.

Angelo Coronel explained that the project's objective is to make re-entrepreneurship "a less costly, more agile and operational option for micro and small enterprises (MSEs)." According to the author, these are faster and less expensive processes for creditors and debtors, and for the State, without neglecting the necessary legal security. The idea is to allow for a faster recovery of small and micro-enterprises—hence the term re-entrepreneurship.

"This is a matter that will be of great value to small business owners in Brazil. The approval of this legislation is important as a way to show that the Senate is sensitive to the situation of these companies, which represent a vital part of the national economy," declared the senator.

The project also broadens the concept of micro and small businesses and amends Complementary Law 123 of 2006 (which establishes the National Statute for Micro and Small Businesses) to address four debt renegotiation procedures: special extrajudicial renegotiation, special judicial renegotiation, special summary liquidation, and provisions relating to the bankruptcy of micro and small businesses.

Substitute

According to Jorginho Mello, the main objective of the proposal is to regulate debt negotiation procedures, mostly with private actors, prioritizing out-of-court settlements. The rapporteur praised the matter but justified the substitute bill with the need for adjustments to the text. He himself inserted provisions to facilitate procedures such as deregistration, in addition to making changes to deadlines and grace periods and enabling the granting of free legal aid, depending on the financial situation of the small business. As the senator explained, the changes were communicated to government representatives and the author of the bill.

"This report was a collaborative effort. I have no doubt in stating that this is a milestone that will help micro-entrepreneurs to get back on their feet," the rapporteur emphasized.

Among the changes introduced by Jorginho Mello's substitute bill is the elimination of rules regarding the registration of defaulters. The initial text stipulated that the debts of micro and small businesses, if the procedures outlined in PLP 33 were followed, could not be considered defaulted and could not prevent the debtor from obtaining a new loan. Mello maintained the registration because, "even though the partner is not the same as the bankrupt company," transparency is important.

"Transparency regarding bankruptcy or recovery is important, and it would be reckless to obscure the information available in the credit market," the rapporteur stated.

The substitute bill also included requirements for debtors to access special renegotiation, whether through judicial or extrajudicial means, but with the period of regular business activity reduced to 12 months—the average duration of micro and small businesses. Some restrictions were also introduced for rural producers.

Amendments

Jorginho Mello also accepted, in whole or in part, four of the seven amendments presented. Based on an amendment by Senator Soraya Thronicke (PSL-MS), the substitute bill equates individual micro-entrepreneurs (MEI), entrepreneurs, and other private legal entities that meet certain criteria to micro-enterprises. A suggestion from Senator Fabiano Contarato (Rede-ES) to remove the prohibition on subsequent regulations on the subject from the text was also accepted. The rapporteur also accepted two amendments from Senator Izalci Lucas (PSDB-DF) to make wording adjustments.

Senator Rogério Carvalho (PT-SE) presented a motion to vote separately on a suggestion from Senator Contarato. The amendment stipulated that, in case of bankruptcy, priority would be given to workers with overdue salaries, up to 60 days and up to two minimum wages. The government leader in the Senate, Fernando Bezerra Coelho (MDB-PE), expressed support for the amendment, and the rapporteur accepted the suggestion. Thus, the motion was withdrawn.

Praise

Fernando Bezerra described the report as "brilliant" and highlighted the understanding reached between the author, the rapporteur, and representatives of the Executive branch. Senator Antonio Anastasia (PSD-MG), who presided over the session, also praised the report's "erudition." According to Senator Eliziane Gama (Cidadania-MA), only 20% of small and micro-enterprises succeed in a recovery process—revealing the great importance of the matter.

Senator Randolfe Rodrigues (Rede-AP) stated that the project is very important for the recovery of the economy in the post-pandemic period. He demanded, however, more agility from the government in the procedures for the coronavirus vaccine. Senator Zenaide Maia (Pros-RN) defined the project as "essential," while Senator Marcos Rogério (DEM-RO) classified the proposal as "meritorious."

"This is yet another one of those regulations that benefits entrepreneurs, generating jobs and income for Brazil," said Marcos Rogério.

Suggestion

According to Angelo Coronel, the project is a suggestion from the Permanent Forum of Micro and Small Enterprises, which brings together more than 60 national institutions that support and represent micro and small enterprises.

The senator pointed out that, although micro and small businesses represent 98.5% of Brazilian companies, contribute approximately 54% of labor income and 27% of the gross domestic product (GDP), they do not have an adequate structure to overcome the economic and financial crisis that may eventually affect them. Therefore, Coronel stressed, the project is so important.

Source: Senate Agency