Investor Presentaiton
CORPORATE LAW
BY PAULO SALVADOR RIBEIRO PERROTTI AND FERNANDO MAURO BARRUECO
BRAZIL - CANADA COMPARATIVE LAW
Merger is an operation whereby two or more companies amalgamate,
with the aim of forming a new company which then assumes all in all
their assets and liabilities of the now extinct former companies.
A demerger is an operation whereby a company transfers parts all its
net equity to one or more existing or specially formed companies,
resulting in the extinction of the parent company in the event that it has
transferred all its net equity, or reducing of its capital, if it transferred
on only part of its net equity.
Tax System
1. General Features
The Brazilian Federal Constitution, promulgated on October 5, 1988,
confers upon the Federal Union, the States, and the Municipalities
power to levy taxation. In Brazil taxation may take the form of taxes,
fees, betterment fees, other contributions, and compulsory loans.
Taxation may be instituted by any of the three levels of government,
in accordance with specific powers conferred under the Constitution.
Fees collected at the three levels, are used to fund services such
as law enforcement, and other collective public services delivered
or provided to the taxpayer. Betterment fees (though as yet not
commonly levied) may be collected from the property owners that
benefit from execution of public works.
Contributions can only be levied by the Federal Government. There
are social contributions (payroll charges); contributions to intervene
in the economic domain, contributions in the interest of professional
or economic categories, and contributions to finance social security.
Compulsory loans can be instituted only by the Federal Government,
to defray urgent public investment of relevant national interest, or
extraordinary expenses resulting from public calamity or foreign wars.
Unless otherwise expressly stated in the Constitution, the imposition
and collection of taxation must comply with certain fundamental
constitutional rules, including:
• the principle of legality (whereby taxation may only be levied or
increased by enacted law);
⚫ the rule of equality (whereby taxpayers in equivalent situations must
receive identical tax treatment);
⚫ the principle of non-retroactivity (whereby taxation cannot be levied
on events that occurred prior to entering into force of the law that
created a new tax or which increased rates or the base of computation
of existing ones);
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