INSIGHTS-ENG

The new Resolution from the Federal Council of Medicine, which brings some modifications on the regulation of medical advertising, came into force on March 11st, 2024. On the same day, CODAME (a Commission responsible for spreading medical affairs’ information) published the “Medical Advertising’s Manual”, which provides better clarification about its interpretation and enforcement.

This Resolution brings significative amendments in the regulation of the theme and was a result of various claims from the medical community to modernize ethical standards.

Among these innovations, the following can be highlighted:

• the permission to make “before and after” announces and to repost other patients’ statements, as long as it respects some requirements in order to avoid leading the impression of “guarantee of success” and, also, so it doesn’t configurate sensationalism or unfair competition.
• the permission to share divulgate the physician’s office details (such as parking, safety, localization etc.) and, also, the service portfolio (health plans and insurances covered).
• the permission to announce appointment’s price, means of payment accepted, as well as doing some reductions or promotions, provided that it does not configurates tying, awards or draws.
• the permission to publicize an equipment or a technological resource used for the service, along the lines of its portfolio approved by ANVISA (government’s agency similar to the FDA), as long as it is not done in a way that gives an impression of “privileged capability”.
• the permission to announce postgraduation’s titles, provided it follows some requirements.

However, although it may have brought some significative innovations, the new Resolution still has many prohibitions and restrictions, especially to preserve medicine’s image as a “support-activity” and to maintain medical advertising’s main purpose: to inform and educate. In other words, even though it may have allowed some behaviours previously taken as unethical, the Federal Council of Medicine imposed various requirements that must be respected in other to those be regarded as legitimate.

Therefore, it is still essential to keep caution, as an attempt to avoid ethical problems regarding irregular advertising, considering that the new Resolution does not allow everything. Thus, it remains of huge importance to count on a qualified legal counsel in order to have previous knowledge about the permissions and prohibitions regarding medical advertising.

The dissociation is a common event in the business world. In order to assess the company and stipulate the amount owed to the shareholder, different valuation methodologies can be used. Respecting private autonomy, the articles of association can define the form of valuation. Examples of valuation methodologies are: discounted cash flow; market multiples; equity value; and market value, which is used especially when concrete references are available, as is the case with companies with shares traded on the stock exchange or recently sold on the private market. To these methods can be added parameters, criteria, metrics, scenarios, among other aspects that help tailor the valuation to the partners’ vision of the value of the business.

Often, articles of association and shareholder agreements do not stipulate a detailed method for valuing the company. In this situation, the criterion defined by current law is the so-called “determination balance sheet “. Unfortunately, the law on the matter can be quite confusing and it is common for the parties’ lawyers to disagree on what should be taken into account during the negotiation. Most of the time, an understanding can be reached. On other occasions, however, it is necessary to go to court to resolve the issue.

The understanding of the Brazilian Supreme Court of Justice that the assessment by the determination balance sheet should not be restricted to the accounting and tax dimension of the company seems to be dominant today. An example of this is the opinion of Judge Cesar Ciampolini (São Paulo Court of Justice; Civil Appeal 1058804-37.2020.8.26.0100), according to which the determination balance sheet should not follow accounting rules, since the criterion seeks to ascertain the effective value of the enterprise according to market criteria. Despite this, it is common for lawyers and even judges to restrict the assessment to the company’s net worth. It is true that the calculation of shareholders’ equity includes intangible aspects of the business, such as the company’s brand and intellectual property, but this alone is often not enough to arrive at the company’s fair value.

The most common methods used by the market in company valuations seek to fill the gap left by the mere valuation of shareholders’ worth, adding, explicitly or implicitly, other aspects that can be taken as a reference for the value of the business. Some important aspects, which are sometimes left out, are: (a) the company’s projected growth in turnover and profitability, based on the market positioning built up to the time of the valuation; (b) the risks inherent in the business and the forecast of future market behavior; (c) the cost of available capital and the opportunity cost of investing or maintaining investment in the company; among others.

A possible and simple approach to solving this problem is to add goodwill to the value of the company’s tangible assets. Goodwill is an intangible asset that represents reputation, customer loyalty, brand recognition and other aspects that contribute to a company’s value, in addition to its tangible assets and financial metrics. It is notable that part of the scope of Goodwill overlaps with the intangible scope taken into account in the valuation of shareholders’ equity. This is not a problem, since, as has been said, in the valuation of Goodwill it is added to tangible equity, but it does help to realize how important it is to master the tools so as not to end up creating redundancies in the valuation.

To avoid any mistakes when applying these methodologies, it is important to always work with experienced lawyers and financial advisors. Different evaluation instruments can be used or combined for each case. An experienced professional will be able to help the client find those that best suit their business and substantially reduce friction in the negotiation, thereby also reducing the risk of the matter ending up in court.

By: Julia Finelli.

On the 13th and 14th oh March, RUCR Law has participated on the 39th annual edition of the Brazil-Germany Economic Fair. This event, hosted in Belo Horizonte, was organized by the Nacional Confederation of Industry (CNI, Brasil), by the Federation of German Industries (BDI) and by the Federation of Industries of Minas Gerais (FIEMG). In this edition, the main theme was: “New approaches to energy, climate and digitalization.”

Germany is Brazil’s forth largest trading partner and, in 2022, the trading balance between both countries has surpassed the mark of 19 billion dollars, reaching its highest level since 2014. In this sense, the Economic Fair envisages to promote a bond always tighter between these countries, stimulating the creation of strategic partnerships and cooperation opportunities, aiming not only at the commercial or trading connections, but also at the common challenges that both Brazil and Germany are going to face in the near future. Among the discussed subjects, it is possible to highlight the focus on science, technology, innovation, and environmental care.

Within the panels, the speakers have brought discussions about: analysis on value chains; circular economy, renewable sources of energy and sustainability; and geopolitical challenges. Regarding this last topic, many of the interventions proposed a higher approximation between the European Union and the Mercosur. The possibility of a brief conclusion of the commercial agreement between Mercosur and EU, as well as the development of a treaty to avoid the double taxation are other rather important points to widen this partnership, indicated CNI.

The President of BDI, Professor Siegfried Russwurm stressed the strategical importance that Brasil holds with Germany and their interest in deepening both economic cooperation and integration. He based his speech on the search for the decarbonization with renewable and efficient sources of energy, preservation of the Amazon rainforest; digitalization and regulation of cybersecurity; and a higher degree of practicality in the countries’ cooperation.

Flavio Roscoe, President of FIEMG, highlighted that 95,4% of Minas Gerais’ energy source is renewable, thence, foreign companies are able to lower their carbon footprints by buying Brazilian energy. Thus, goods manufactured in Brazil have a reduction in their carbon emissions and in their environmental footprint.

RUCR Law has a specialized team, ready to help German companies with their demands in Brazil. We are also part of the Global Advocaten Network, which provides us with a full range of partner attorney’s offices, making us able to assist Brazilian companies present in Germany as well.

With over 20 years of performance in the National and International scope, the law firm RUCR Law shares its expansion, with its new branch in Betim.

Founded in 1999, RUCR Law – Rabelo Ulhoa Coelho Ribeiro Advogados is an originally Brazilian law firm with huge experience in Corporate and International Law. With a multilingual and multidisciplinary team, the law firm serves the demands of clients from several areas and with varied profiles, and is coordinated by its four partners: Henrique Rabelo, Marcelo Ulhoa, Daniel Coelho e Renato Ribeiro.

The branch in Betim is located at the Seletto Office Building, at Av. Governador Valadares, 851, Center in Betim, Minas Gerais, and will be coordinated by our lawyer Tamara Brant Bambirra, graduated from Dom Helder Câmara, with a master’s degree in protection of fundamental rights from the University of Itaúna.

“Coordinating the RUCR Law branch in Betim, my hometown, is a highly exciting challenge. As I believe in the services provided by the office through the experiences of its partners and its highly qualified team, and in the possibilities that the city of Betim has to offer, I am sure that the office in this City is already a great success to provide the necessary assistance to companies and entrepreneurs.” – According to Bambirra.

With its new branch, the office seeks even more evolution, expansion, and development. According to Henrique Rabelo, our founding partner:

“This move is another reflection of our excellence in providing our services and commitment to our clients. We are in evolution, expansion and development, and having a branch in Betim, the fifth most populous municipality in the state of Minas Gerais, hub of large companies and industries will represent a lot considering our performance with Business and International Law, being certain that we will have an excellent coordination from Dr. Tamara Brant Bambirra.”

With clients on 5 continents and over US$ 500 million in interests represented, we have a client portfolio comprised of a wide range of industries, including pharmaceutical, credit securitization, mining, construction, banking, finance, ports, bidding, real estate and technology.
In addition, we are the first Latin American member and the only Brazilian member of Global Advocaten, a traditional, renowned, and exclusive global network of law firms, with more than 800 specialists in over 20 countries.

We are very grateful for the warmth with which our office was welcomed last night (02/09/23), at our Inauguration Cocktail, by all the businessmen, friends, and members of the City Hall, especially the Mayor Vittorio Medioli and the Vice-Mayor Cleusa Lara. Check out the photo coverage of the event, CLICK HERE!

Foreign companies from different sectors choose to enter Brazilian market by hiring a sales representative in Brazil, as happens in many parts of the world. However, many times, these companies are unaware of some legal aspects that govern sales representation in Brazil, especially in the event of contract termination and its consequences.

We will deal with the cases of termination – without cause and on the initiative of the represented company – of a sales representation contract of indefinite duration.

According to Law 4.886, from December 9, 1965, that governs this matter, if the represented company terminates the contract without cause, the representative must receive immediately all outstanding commissions, even if there are unpaid invoices at the date of contract termination.

Furthermore, in these cases, the represented companies must also compensate the representative. The amount of the compensation will be, at least, 1/12 of the total amount of commissions that the representative received during the entire duration of the contract.

A final note is that any party can terminate the representation contract of indefinite duration, with more than six months in force, as long as it is informed to the other party at least 30 days before.

It is important to note that changes in the rules above are currently being discussed, as a bill in the Brazilian Congress, with the objective of providing more legal security and predictability in the commercial relations between the companies and its sales representatives. Among the possible alterations discussed, it is worth mentioning the possibility of limiting the base-period for calculating the 1/12 amount, and the possibility of an annual payment of an additional amount corresponding to the 1/12 as an anticipation of future compensation. However, despite these discussions, no effective changes have been made to the legislation in effect.

RUCR Law provides services for foreign groups that intend to promote their products and services in the Brazilian market using contracts with local sales representatives, always seeking to advise them about the risks and peculiarities of Brazilian law.

Subject analyzed by partner Marcelo Ulhoa, together with trainee Pedro Sousa.

For further clarification, please contact our team.

Aiming to inform and inspire people and companies, our office is launching the RUCR Interview board.

We will invite every month a professional from different areas of the corporate world to answer to some questions that evolve the market trends and the experiences in successful businesses.

This month, we invite the Founder of Raja Ventures and Investor of the Innovation Sector, João Paulo Zica Fialho. You can check it below:

Tell us a bit about how the idea of creating Raja Ventures came about:

Raja Ventures arose from the opportunity to enter the startup ecosystem by investing in technology projects that are working to grow and that, in the future, can provide a good financial return through their sale.

How many companies are in Raja’s Portfolio today? Do you participate or collaborate to manage all of them?

204 projects have already passed through Raja Ventures. 95 of them came to formalize a CNPJ, and we have 65 of them operating. I don’t collaborate in their management, but we help the startups to attract clients and investors.

How do you see the environment for startups in our state of Minas Gerais? What about in Brazil?

The Startup Environment is very favorable now, as big companies desire to digitalize their business productively and people want to diversify their investments in new projects.

A tip for the young person who is trying to turn his idea into a business: what is the first step?

The first step is to study a lot about the market in which he wants to work.

The second tip is to validate his idea as much as possible if it really makes sense. Would people use or pay to use this service or products?

We thank João Paulo Zica Fialho for his participation.

Law, especially regards litigation, is a profession strictly linked to the observance of deadlines. And it is the primary obligation of this professional to avoid the expiration of the term without proper action. Diverging understandings and lack of thesis that are accepted by the judging body is something that is susceptible, even because the understandings vary over time and are not always uniform between the courts. But letting a deadline pass by the negligence of the legal professional is something inadmissible for the profession.

In fact, the technique of “jurimetrics”, a discipline that makes a diagnosis of the subsumption of a topic to a specific judging body through the application of statistical models, would help to prevent the content of the lawyers’ procedural manifestations from diverging from the final understanding. But it is still something that cannot be guaranteed with precision, but only present the client, part of the process, with a probability of the future result. But to ensure a deadline is something that can be more certain, because there are practices contained in the Legal Comptroller’s Office that, if well structured and complied with, work without risks.

An office whose Legal Controllership works in a harmonious way will never leave it’s client or its collaborators to hazard. But it is essential that the principles of controllership be instilled in the mentality of professionals so that they are followed without casualties. If this is the case, the Controller and his entire team will have mechanisms capable of assuring lawyers that they exercise their profession with the peace of mind that there is no risk of deadlines being missed.

The valorization of these controllership and management practices are being recently valued by the lawyers, which increasingly depends on them for the proper functioning and expansion of the business and management part of a firm, of whatever size or proportion. Evidence of this phenomenon is the Ordinary Law Project sent on 03/30/2022 to the Constitution and Justice and Citizenship Committee of the Brazilian Chamber of Deputies – PL nº 646/22 – still pending before the Brazilian Federal Senate and sanction or veto by the Presidency after.

Bill 646/22 seeks to establish consequences for the loss of procedural deadlines by lawyers in addition to the administrative sanctions to which they are already subject, before the Brazilian Bar Association – OAB. This happens because it is not uncommon for a lawyer to miss an important deadline and the client, represented by him, is already surprised by the consequences, hands tied. This is what motivated the author of the Project proposal, Nereu Crispim, who sees this gap in the Law as the absence of collective protection in the face of negligence by the lawyer.

The sanctions proposed in the Project range from warning, censure and fine to suspension and interdiction of professional practice and exclusion of the lawyer from the OAB in case of recurrence of suspension and can be invoked by the aggrieved party or by the Judge, always guaranteeing the lawyer the constitutionally guaranteed principles of contradictory and full defense.

Once the Law resulting from this project is published, the need for Legal Controllership practices will become even more evident, as the lawyer who acts with negligence will face more serious consequences than a simple administrative process.