FINDING INFORMATION ABOUT YOUR JV PARTNER IN BRAZIL
Brazil has a lot of government databases. Several of them are available through internet search.
They are very useful when evaluating potential suppliers or targets for a Joint Venture or Acquisition
This post will cover the Federal tax registration, the São Paulo state registration and the status of mining rights.
CNPJ – THE MASTER CODE
Everything in the Brazilian business world is centered around the CNPJ number. CNPJ is the tax enrollment number for companies. It is similar to the EIN code used by American companies, but much more prevalent. It is also usually public.
You can ask your target for his CNPJ number. If he doesn’t give you one, there are two probable explanations:
- The project is not yet incorporated. It could be a seed project, for example. Or, it could be an individual working alone;
- It is scam or fraud. Get out.
You can consult the CNPJ number at the Federal Revenue Service website: https://www.receita.fazenda.gov.br/pessoajuridica/cnpj/cnpjreva/cnpjreva_solicitacao.asp
On the result page, look for the bottom left, to see if the company is active.
- The Portuguese work for active is ATIVA.
- Bad words would be INATIVA (inactive) or SUSPENSA (suspended) or CANCELADA (cancelled).
- If the status is inactive or suspended, it means that the company has not fulfilled its tax filing obligations. If it shows as cancelled, the company may be in serious difficulty.
At the end of the page, click the QSA button.
- QSA means list of shareholders and directors;
- You can check the value of the company’s total subscribed equity, and also the name of its legal representatives.
The legal representative is identified by the word ADMINISTRADOR (administrator, or director).
Sometimes, individual shareholders can also act as directors, even if not listed here.
Please keep in mind that I’m being very simplistic. This is supposed to be a 2-minute check. There is a lot of additional information in the CNPJ certificate, and also a lot of corporate details that are not included there and must be confirmed at the company’s articles, etc.
BUSINESS REGISTRATION AT THE COMMERCIAL REGISTRY
Companies must be registered with their local state authority, via the “Junta Comercial” (state commercial registry).
The Junta from São Paulo offers free online consultations about the companies registered there.
The website is: https://www.jucesponline.sp.gov.br/ResultadoBusca.aspx
For other states, it may be necessary to hire a lawyer in Brazil in order to obtain a certificate.
The mining agency in Brazil was called DNPM. Now, it is called ANM.
However, since the change is recent, many people in the market still call the mining rights identification number as “DNPM Number”, “DNPM Code” or, simply, DNPM.
You can check the existence and basic status of a mining right at the ANM website: https://sistemas.dnpm.gov.br/SCM/extra/site/admin/dadosProcesso.aspx
Just type in the number of the mining right and you should get a return page containing a lot of information, including the legal owner of the mining right.
You should compare the details of the legal owner with the CNPJ registration, as shown above.