Inova Simples: what it is and how it can help your startup

Inova Simples is a simplified business formalization process that grants incremental or disruptive business initiatives that declare themselves as innovation companies differentiated treatment with a view to stimulating their creation, formalization, development and consolidation as agents that drive technological advances and the generation of jobs and income.

Inova Simples was established by Complementary Law No. 167, of April 24, 2019, and regulated by CGSIM Resolution No. 55, of March 23, 2020, which defines the summary procedure for opening, changing and closing companies under the Inova Simples regime.

1.What is Inova Simples?
Inova Simples is a special simplified regime for registering business initiatives that declare themselves as innovation companies. The initiative aims to stimulate the creation, formalization, development and consolidation of innovative business initiatives as agents that drive technological advances and the generation of jobs and income in the country.

2. What is a Simple Innovation Company?
   The Simple Innovation Company is any and all innovative business initiatives registered under the Inova Simples regime.

3. What are the benefits granted to business initiatives registered under the Inova Simples regime?
   In addition to having a simplified, automatic and free procedure for registering the business initiative, obtaining a CNPJ allows the company registered with Inova Simples to create a bank account in the legal entity modality, with easier access to credit with financial institutions, the commercialization of products and/or services on an experimental basis, in addition to other advantages arising from credibility with the formalization of the business, in the same way as other types of companies.

Inova Simples also allows the examination of patent or trademark registration applications before the National Institute of Industrial Property (INPI) to be carried out on a priority basis.

4. How much does the registration process for the Inova Simples scheme cost?
   The registration process at Inova Simples is free. The user simply accesses hereand click on the registration field in Inova Simples.

5. Is it necessary to take any document for validation at the Commercial Board or other registration body?
   No, the registration of the Simple Innovation Company is carried out online, automatically and free of charge on the GovBr Portal, with the CNPJ being obtained immediately after registration under the Inova Simples regime.
6. What data must be provided when registering for the Inova Simples scheme?
   The following information is requested on the electronic registration form for the Inova Simples regime:

• Address of the Simple Innovation Company;
• Business name;
• Share capital and method of raising funds (optional);
• Economic activities of the Simple Innovation Company;
• Scope of innovative business intent;
• How the Simple Innovation Company operates and whether it is a company with a virtual establishment;
• Contact details of Empresa Simples de Inovação (telephone, email and postal code for correspondence);
• Counter data (optional); and
• Name of the Members of the Simple Innovation Company and information relating to each member, such as CPF/CNPJ, qualification and share in the share capital;
• Names of the Administrator(s) of the Simple Innovation Company and information relating to each administrator, such as CPF and qualification (optional).
• Social networks (optional)

7. Who are the members of a Simple Innovation Company? And what about the administrators? What is the company representative?
   THE integralis the person who constitutes the Simple Innovation Company and who will have the rights of participation in relation to it. This may be an individual or a legal entity. The Simple Innovation Company may be constituted by more than one member, in partnership.

THE administrator is responsible for the acts pertinent to the management of the Simple Innovation Company. This may be a member or a third party without participation.

Finally, the Representative is the person appointed by the Simple Innovation Company to be the representative before the Brazilian Federal Revenue Service. It should not be confused with the role of the “administrator” in the management functions of the Simple Innovation Company.

The Simple Innovation Company must have at least one Member, but the designation of an administrator is not mandatory. In the event of omission, all individual members will be considered administrators, acting alone. Legal entity members will not be considered administrators.

8. Can someone under 18 be a member of a Simple Innovation Company? 
   Yes, individuals over the age of 16 and under the age of 18 may be members of a Simple Innovation Company, provided they are legally emancipated, in accordance with the law. At the time of registration, the minor member must sign a self-declaration assuming their condition of being legally emancipated.

Unlike what the legislation provides for individual entrepreneurs or business corporations, there is no legal basis for admitting that people who are not in full enjoyment of civil capacity are members of a Simple Innovation Company.

9. Is Brazilian nationality required to be a member of a Simple Innovation Company? Is it a requirement to reside in Brazil?
   There are no restrictions regarding nationality, but it is required that the member be registered with the CPF. A person residing abroad may be a member of a Simple Innovation Company.

If only individuals residing abroad or legal entities (in Brazil or abroad) are informed as members during the registration process of the Simple Innovation Company, it will be mandatory for the user to inform at least one administrator, who will act as the company's legal representative.

10. Can I open a Simple Innovation Company alone, or do I need a partner?
    A Simple Innovation Company can have 1 (one) or more members. There is no maximum limit.

11. Can I acquire or sell a stake in a Simple Innovation Company?
    Yes. Participation in a Simple Innovation Company can be transferred, either free of charge or for a fee. To do so, it is necessary to make a registration change, the instructions for which can be found at here.

12. I am a MEI, can I register as a Simple Innovation Company? 
    A person who chooses to undertake by registering under the Individual Microentrepreneur (MEI) regime cannot be a member of a Simple Innovation Company (art. 18-A, § 4º, III of LC nº 123/2006). In this case, the entrepreneur may previously request to be closed as an MEI.

It is not possible to use the same CNPJ registration number when transforming an MEI into a Simple Innovation Company (art. 4, § 2 of CGSIM Resolution No. 55/2020).

Furthermore, although it has a CNPJ registration, the MEI is not a legal entity. There is no separation between the entrepreneur who owns the MEI and the MEI itself. Therefore, it is also not possible to use the CNPJ registration number of an MEI as a member of a Simple Innovation Company.

13. Is it necessary to provide the accountant's details when registering a Simple Innovation Company?
    Accountant data is not mandatory. However, the information may be necessary for the business initiative to obtain tax registration with the state treasury department or municipal finance department. It is recommended that the user check the situation with the state and municipal agencies.

14. Does the Simple Innovation Company need tax registration with the state and municipal tax department?
    In principle, no. However, from the moment the Simple Innovation Company starts marketing the product and/or providing the service in an experiment, tax registrations will be mandatory. The type of registration varies according to the economic activity, and consequently with the codes of the National Classification of Economic Activities (CNAE) adopted in its CNPJ. Without tax registration, the company will not issue invoices.

15. Can a Simple Innovation Company market its products and/or provide services? What are the consequences of exceeding the legal limit?
    Yes, commercialization on an experimental basis is permitted up to the annual gross revenue limit set for MEI, which is currently R$81,000.00 (eighty-one thousand reais).

If the aforementioned limit is exceeded, the Simple Innovation Company will be in an irregular situation, subject to penalties under tax legislation. It is possible that the Simple Innovation Company will have its legal nature transformed to remain in a regular situation.

It is recommended that any questions related to invoicing, declaration, taxation regime, tax collection and other fiscal and tax matters be directed to the Brazilian Federal Revenue Service and other tax authorities.

Questions related to Simples Nacional can be checked at Contact Us about Simples Nacional.

16. How will trademarks and patents be registered at the National Institute of Industrial Property for Simple Innovation Companies?
    At the end of the registration process under the Inova Simples regime, a link will be made available so that the user, if he or she wishes, can consult the page of the National Institute of Industrial Property (INPI) which provides general guidelines for priority requests from business initiatives registered with Inova Simples. At any time, the Simples Innovation Company may consult here.

17. What will the composition of the company name of the Simple Innovation Company be?
    The business name of the Simple Innovation Company may be a company or denomination containing a trade name, with or without the designation of the economic activity, and must contain the expression “Inova Simples (IS)” at the end.

The business name of the Simple Innovation Company may be composed of the CNPJ number followed by the expression “Inova Simples (IS)”, in which case the name will be generated automatically (art. 3, §3 of CGSIM Resolution No. 55/2020).

Whatever the company name, it will be subject to verification for identity conflict purposes in the National Registry of Legal Entities (CNPJ).

18. Can an existing company register under the Inova Simples regime? 
    The Simple Innovation Company will be constituted exclusively under the legal nature “Simple Innovation Company (Inova Simples)”, and the transformation of an existing legal nature to the Simple Innovation Company is prohibited (art. 4, §§ 1º and 2º, of CGSIM Resolution nº 55/2020).

19. I already have one startupformalized. Can I register with Inova Simples? 
    Any business initiative that considers itself a startup, as long as it does not already have a business registration and CNPJ registration, it can register under the Inova Simples regime. However, startups and companies of any type of business that already have a business registration and CNPJ registration are prohibited from registering.

20. What is the minimum capital of a Simple Innovation Company? How are the equity interests between the members defined?
    There is no minimum capital, and registration of a Simple Innovation Company without capital is permitted, including.

If capital is indicated, the equity interests of each member must also be indicated.

If there is no indication of capital, it is assumed that each member has the same share in the company.

21. Does the Simple Innovation Company have its own assets? What is the liability regime of the partners?
    The legislation is silent on these matters, which requires analysis from the perspective of current corporate and business legislation.

The Simple Innovation Company is constituted without the mandatory execution of a social contract and without the registration of its articles of incorporation in a civil registry office for legal entities or in a Commercial Board, which is why it does not have legal personality and can be considered a common company (art. 986, of the Civil Code).

The assets and debts of the Simple Innovation Company constitute special assets, of which the members are joint owners (art. 988 of the Civil Code).

All holders are jointly and severally liable for the obligations undertaken by the Simple Innovation Company (art. 990 of the Civil Code)

The rules of the pure simple company (art. 986 of the Civil Code) apply subsidiarily to the Simple Innovation Company, to the extent compatible with it.

22. How do I get the GovBr login to access the Inova Simples registration form? 
    Check it out herethe guidelines and procedures for creating a Gov.Br access account.

23. How do I sign the electronic registration form for the Inova Simples regime?
    To sign the electronic registration form for the Inova Simples regime, the user simply needs to have a GovBr account, which has an electronic signature.

To use the GovBr electronic signature service, you must have an account validated by:

• facial recognition, performed by the GovBr application (download the app here);
• accredited banks;
• digital certificate.

Check here whether your Gov.Br account is validated to use the electronic signature. To use the feature, the account must have a “silver seal” of reliability.

If the account is not able to use the electronic signature, check here the necessary guidelines to obtain the minimum reliability requirements to use the Gov.Br electronic signature.

24. What self-declarations are required to register under the Inova Simples scheme?
    All members of the Simple Innovation Company must acknowledge and sign a self-declaration of compliance with the conditions for classification as low risk, as well as compliance with all requirements of state, district and municipal legislation for the exercise of economic activities at the location of the Simple Innovation Company's headquarters. A declaration of classification as a Microenterprise is also requested to define the size of your Simple Innovation Company.

25. Is the Simple Innovation Company subject to the issuance of operating licenses and permits?
    When registering with Inova Simples, the entrepreneur self-declares, under penalty of law, that the company's operation will not produce pollution, noise, or vehicle traffic congestion, for the purposes of classifying the economic activity as low-risk, as well as that it will comply with all requirements of state, district, and municipal legislation for the exercise of economic activities at the company's headquarters, under the terms of art. 65-A of Complementary Law No. 123 of 2006 and art. 3 of CGSIM Resolution No. 55 of 2020. Therefore, the Simples de Inovação Company is exempt from issuing operating licenses and permits.

In the event of non-compliance with local requirements for classifying economic activity as low risk, the supervisory body may take appropriate measures to ensure that the business initiative complies with the requirements of local legislation or subject the entrepreneur to the issuance of licensing and permits.

26. Is there any proof of registration of the business initiative under the Inova Simples regime?
    At the end of the registration process for the Inova Simples regime, the user can generate the Inova Simples Certificate (CInova), a document with the main information on the registration of the Simple Innovation Company, the self-declaration required for the registration of the business initiative and the confirmation of the electronic signature of all members. The document can also be issued at any time by simply accessing the system.

The user can also generate the Proof of Registration and Registration Status in the CNPJ of the Simple Innovation Company, either at the end of the registration process in Inova Simples or at any time. clicking here.

27. How do I make changes to the registration and close a Simple Innovation Company?
    Through from this linkYou can access the registration change and cancellation form. The link is the same as the one for registration, just select the desired option (change or cancellation) and proceed with the request via the system.

28. Can a Simple Innovation Company opt for the Simples Nacional?
    The Simple Innovation Company is allowed to opt for the Simples Nacional. CGSN Resolution No. 171, of October 26, 2022, amends the CGSN Resolution No. 140, of May 22, 2018, allowing Simple Innovation Companies (self-declared under the terms of the art. 65-A of Complementary Law No. 123, 2006) can opt for the Simples Nacional tax regime.

New companies and those already registered under the Inova Simples regime can join Simples Nacional within the same timeframes as other companies. In short, new companies can join up to 60 days after opening the company, while companies already incorporated can join up to the last business day of January.

29. What is the legal nature corresponding to the Simple Innovation Company?
    Simple Innovation Companies are constituted exclusively under the legal nature “Simple Innovation Company (Inova Simples)” (art. 4, §§ 1º and 2º, of CGSIM Resolution nº 55/2020).

The establishment of the legal nature of a Simple Innovation Company, identified by code 234-8, was carried out through the COCAD Executive Declaratory Act No. 8, of September 20, 2021. As a consequence of this act, the aforementioned legal nature was duly recognized in the classification table of legal natures of the National Classification Commission (CONCLA/IBGE), and is now regularly included in the table made available to online consultation.

30. Can the Simple Innovation Company transform into another type of company?
    The Simple Innovation Company may request its transformation into an individual entrepreneur or business corporation (art. 4, § 3, of CGSIM Resolution No. 55/2020). In these cases, the entrepreneur is subject to the traditional procedure for registering and legalizing companies. The National Department of Business Registration and Integration (DREI) forwarded Circular Letter No. 3785/2022/MEwith guidelines on the procedure for Commercial Boards.

31. What legal provisions regulate Inova Simples?
    The simplified special regime of Inova Simples was established by Complementary Law No. 167, of April 24, 2019, which, among other measures, amends Complementary Law No. 123, of December 14, 2006, and includes the wording of art. 65-A, which provides general guidelines on Inova Simples.

Within the scope of the National Network for Simplifying the Registration and Legalization of Companies and Businesses – REDESIM, Inova Simples was regulated by CGSIM Resolution No. 55, of March 23, 2020.

In the fiscal sphere, the CGSN Resolution No. 140, of May 22, 2018, as amended by A CGSN Resolution No. 171, of October 26, 2022, admits the possibility of a Simple Innovation Company joining Simples Nacional.

For the purposes of trademark and patent registration requests for Simple Innovation Companies, the National Institute of Industrial Property (INPI) issued the INPI/PR Ordinance No. 365, of November 13, 2020, which provides priority requests from business initiatives registered with Inova Simples.

33. Who is responsible for providing guidance on Inova Simples?
    Exclusively from a technical business and corporate point of view, the National Department of Business Registration and Integration (DREI) has the authority to resolve doubts arising in the interpretation of laws, regulations and other standards related to the opening and regularization of companies and, therefore, on matters relating to Simple Innovation Companies (art. 4, item III of the Law No. 8,934, of November 18, 1994).

It is recommended that any questions related to invoicing, declaration, taxation regime, tax collection and other fiscal and tax matters be directed to the Brazilian Federal Revenue Service and other tax authorities.

Source: gov.br.