Georgia Finance

Sep 7 2018

CNPJ for Dummies – The Brazil Business, currency trading for dummies.#Currency #trading #for #dummies

CNPJ for Dummies

Currency trading for dummies

The Brazil Business

In this article, we will explain everything about CNPJ, a register where all entities are required to enter before commencing their activities.

Among the many responsibilities involved in the process of possessing a legal entity in Brazil, one of the most important is obtaining a CNPJ number. All entities are required to obtain a CNPJ before they can commence business activities in Brazil.

What Is It

The Cadastro Nacional da Pessoa Jurídica, which is Portuguese for National Registry of Legal Entities or most commonly known as CNPJ, has functions similar to those of the CPF: linking to the Federal Revenue Service’s database where information on tax accountability is stored. The only difference being that it is unique to the use of legal entities. The CNPJ is a number that identifies these legal entities and other legal arrangements at the Federal Revenue Service.

In the past CNPJ was named CGC, short for Cadastro Geral de Contribuinte, which is Portuguese for General Taxpayer Registration and is no longer used.

The CNPJ registration number has a total of 14 digits. The first 8 digits are the registration number, the following 4 digits identify the entity branch, for example 0001 for headquarters and the following numbers indicate the sequence of branches of a company. The last 2 digits form a checksum of the 12 previous digits.

The CNPJ must be detailed on all invoice and receipts issued by the company and must also be detailed on the packaging of any products manufactured by the company.

What information is it associated with

The CNPJ works as an Identity Number for the legal entity and is linked to information regarding:

  • Opening date
  • Address
  • Entity name and/or Trading name
  • Code and description of economic activities, according to the the CNAE, Brazil’s equivalent to the International Standard Industrial Classification of All Economic Activities
  • Code and description of the legal status
  • Registration status

Requesting your CNPJ

By means of an agreement between the Federal Revenue Service and most states’Board of Trade, the process of applying or changing a CNPJ can now be done through most state’s Board of Trade, which has accelerated the process. A new network – REDESIM, National Network for Simplification of Registration and Legalization of Business – has been established to simplify the process. Each state that is participating in the program has its own link.

To start the process, the applicant, who is responsible for the legal entity, must download the PGD, Documents-Generating Program from the Federal Revenue Service’s website and complete the DBE, Basic Entry Document. Once this is completed, the applicant must download the application named ReceitaNet, available here.

With ReceitaNet, the DBE, along with the Ficha Cadastral de Pessoa Jurídica which is Portuguese for Registration Form for Corporate Entities, are sent to the state’s Board of Trade. The Board of Trade will check all the documentation and once checks are completed they will send it to the Federal Revenue Service office where the CNPJ number will be issued.

Who is required to have a CNPJ number

Entities domiciled in Brazil are required to apply for a CNPJ number for each of its establishments located in Brazil or abroad. The application must be approved prior to initializing any type of activity. An important provision of Brazilian tax law is that foreign companies must have a CNPJ if they own equities in Brazilian companies.

The following entities are also required to obtain a CNPJ number:

  • Government agencies, where budget management is involved
  • Condominiums
  • Groups and consortiums of companies
  • Consortiums of employers
  • Clubs and Investment funds
  • Foreign diplomatic representations in Brazil
  • Brazilian diplomatic representations abroad
  • Permanent representations to international organizations or extraterritorial institutions in Brazil
  • Notary and registration services
  • Public and private funds
  • Candidates for elective political posts and finance committees of political parties
  • Real estate subject to the Special Taxation Regime (RET)
  • Multinational commissions created by international act between Brazil and other countries
  • Foreign banks carrying out purchases and sales of foreign currency transactions with banks in Brazil, receiving and delivering cash money in settlement of foreign exchange transactions

Documents needed to apply for a CNPJ

  • The Registration Form for Corporate Entities, can be obtained via this link to the Federal Revenue Service . For CearГЎ, EspГ­rito Santo, MaranhГЈo, Minas Gerais, Rio de Janeiro and SГЈo Paulo, the application process must be completed online
  • Board of directors or partners
  • Basic Entry Document for CNPJ or Transmission Protocol
  • Copy of Constitutive Act of the company
  • Power of attorney, in the case of one of the partners residing abroad

Maintaining your CNPJ

Entities can keep up to date with the status of their CNPJ – see whether it is still active, whether it has any remarks or irregularities – via the online form Comprovante de Inscrição e de Situação Cadastral. A CNPJ does not have an expiration date.

e-CNPJ

The e-CNPJ is an electronic document in the form of a digital certificate, which verifies authenticity in communication between entities and the Federal Revenue Service, functioning as a digital version of CNPJ. With it, it is possible to:

  • Consult and update registers for the taxpayer entity
  • Obtain certificates from the Federal Revenue Service
  • Register and monitor tax proceedings and power of attorney online.

You can find more informations about e-CNPJ in this other article.

CNPJ-related frauds

Different cases of CNPJ-related frauds are recorded every year in Brazil. The most common types are:

  • A fake entity cloning a regular entity’s CNPJ to use it in banking transactions or when applying for credit
  • A fake website is designed, similar to the original website, using the same information as the regular entity but failing to provide the service. PROCON-SP offers a list of websites which are not reliable in this link

It is recommended, prior to any deal being executed, to check the counterparty’s CNPJ on the Federal Revenue Service website. It is also recommended to pay attention if the other entity is newly created and if its board of directors is constantly changing.

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