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Do you want to open a company in Brazil? Learn all about legal representationPosted 30/08/2018
Foreign companies that want to operate in Brazil need to have legal representation. Understanding how this bureaucratic issue works is the first step for the corporation to be successful and start doing business in Brazil.
Many foreign companies have an interest in acting as a shareholder or investor in a Brazilian company, providing goods or money in foreign currency, with capital funds. But in order to obtain this equity interest, the company must have permanent legal representation, which must be exercised by a legal representative residing in the country. The legal representative will be responsible for the interests of the company in Brazil.
This legal representation gives the corporate attorney the attributions of a partner or shareholder in Brazil to perform, on behalf of the company, various acts before federal, state and municipal public entities and authorities.
The Brazilian Civil Code rules that the mandate of legal representation is exercised when someone receives from another person – or company- the power to perform acts or administer interests on their behalf. Thus, a foreign company that is considering doing business in Brazil will need to appoint a Brazilian – or a foreign individual residing in Brazil and with a permanent visa – as its corporate attorney, to exercise the corporate acts of the company before entities and public bodies, and especially to receive judicial notifications on its behalf.
Therefore, some courts deem applicable criminal and civil liability to the corporate attorney for failure to comply with the rules defined by law, contract or bylaw, to remedy any damages and losses incurred by foreign partners.
The corporate attorney of the foreign company may also be liable for legal proceedings against the legal entity it represents, and must therefore be fully aware of any liabilities and debts, as the legal representative is responsible for the default of the foreign company in Brazil. Thus, it is important to understand the potential risks that come with the legal representation role, considering the corporate attorney can be related to civil, administrative or criminal matters.
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