Brazilian congress debates new Commercial Code

August 6, 2013
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New Commercial Code

As times goes on, many laws from the past need to be revisited to make sure they still have a purpose and that the meaning can not be improperly construed in anyway. We have all seen outdated legislation like the fact that bullets may not be used as currency in Massachusetts or it being illegal for a mustachioed man to kiss a woman in public in Iowa. Some of these laws have been on the books for over a century, which means reform could be a good plan.

Something similar is happening in Brazil right now as a bill is being discussed on the floor of Congress that would enact a new Commercial Code. The current version has been in place since 1850, but several articles were suspended by Brazil’s Civil Code in 2002. This gap now has a handful of jurists believing it is time to create a new code altogether instead of revamping the existing one.

The new bill (PL 1572/11) was presented by Vicente Cândido, a representative from Sao Paulo and member of Labor Party.

While creating a new code could be a crucial step, it is important to make sure patterns and statutes already established are not affected. This includes things like the “Lei das S.As,” which regulates proceedings encompassing issuance of shares, internal regulation of companies and more. It is also unclear how changing the laws would affect the capital markets.

This is something that any company that does business in Brazil will need to stay on top of as an update to these laws could directly affect investment potential in the country.

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