By: Vitor Ferrari and Ivan Kubala

According to Brazilian law, microenterprises are business corporations, simple partnerships, or individual limited liability companies, which earn annual gross revenue equal to or less than R$$ 360,000.00. Small businesses are included in the same business types as microenterprises, however, their annual revenue is greater than R$$ 360,000.00 and less than R$3,600,000.00.

According to data from Sebrae, such companies represent more than 90% of Brazilian companies, generate 60% of formal jobs and around 27% of the national GDP, highlighting their importance to the economy.

However, these companies are the most affected by economic crises, such as the one resulting from the Covid-19 pandemic. In scenarios like these, it is not common for many of these companies to simply cease their activities or declare bankruptcy, causing waves of unemployment, reduced GDP and reduced tax revenue.

What the vast majority of businesspeople are unaware of is that, in principle, it is not necessary to take such drastic measures, since national legislation has created mechanisms whose function is to assist in the recovery of companies in economic and financial difficulties: the special judicial recovery procedure.

This institute aims to create an ecosystem that makes it possible to overcome the economic crisis that plagues small and micro-enterprises, enabling them to maintain their business activity., ensuring job creation and the company’s social function.

It is important to highlight that the special judicial recovery procedure guarantees some benefits to the entrepreneur., such as the possibility of a special judicial recovery plan in which all credits can be covered, with the exception of a few, such as tax credits.

Furthermore, the special plan also provides for the possibility of paying off the credit in installments over up to 3 years and reducing debt amounts, in addition to not being submitted to the General Meeting of Creditors.. It should be noted that payment only begins after the 6-month period has elapsed. stay period, a period that can be extended once for an equal period of 6 months during which the recovering party cannot be subject to any execution, and the creditor must only qualify in the process. 

Therefore, it is clear that the legislator gave small and micro-entrepreneurs a great asset to protect themselves from economic crises without having to interrupt their business activity permanently.

Although it is of great help to the entrepreneur, any judicial recovery is a complicated process. Therefore, it is essential that the entrepreneur is properly represented by lawyers who are specialists in the area.

With the collaboration of Luis Felipe Simão