The name given to the Entrepreneur’s Defense Code may suggest that it is a counterweight to the Consumers’ Defense Code, because consumers and entrepreneurs, in general, occupy antagonistic positions in their relations. However, this is not the case.

Established by the Legislative Assembly of the State of São Paulo with the approval of the Bill 838/21[1], the code was sanctioned (with a few vetoes) by State Governor Rodrigo Garcia and published in the Official Gazette on April 12, 2022 – becoming State Law 17,530/22.

The new legislation has as its main goal to debureaucratize and facilitate the interactions between entrepreneurs and Public Administration, by providing rights to guide entrepreneurs in the exercise of their function, as well as duties of the State in relation to the class.

Article 3 of the code, for example, provides for the guiding principles on the subject: free initiative in economic activities, presumption of good faith of the entrepreneur before the Public Administration and subsidiary and exceptional intervention of the State in economic activities.

On the other hand, among the duties of Public Administration in relation to entrepreneurs we find guidelines such as simplification of procedures for opening and extinguishing companies, as well as the need to provide clear and accessible information.

The Entrepreneur's Defense Code also provides that entrepreneurs have the right to hold the State as a facilitating agent of their activity. Another right provided by the code is that corporate documentation can be provided electronically, facilitating entrepreneurs’ day-to-day activities.

With this approach of protection to entrepreneurs, the code reaffirms legislative provisions of greater hierarchical stature, such as provisions of the Declaration of Rights of Economic Freedom that guarantee the exercise of business activity. The new law, thus, reinforces the need for observance of concepts already established in Brazilian legal framework and brings them to the daily life of the entrepreneur class from São Paulo.

As mentioned, the Entrepreneur's Defense Code aims to facilitate the daily life of the entrepreneur, stating, for example, that the Administration cannot abuse from discretion in its decisions and that the Administration must take economical aspects into consideration in its decision-making processes. These provisions, in our view, make explicit the applicability of the code in the interactions of entrepreneurs with commercial boards and registration entities in general.

Therefore, the Entrepreneur's Defense Code (applicable to all entrepreneurs in the State of São Paulo) more directly supports small entrepreneurs, who, despite of being an important driving force of the economy, may have difficulties in bureaucratic interplays[2] with the Administration, either because they have lean structures or because of they lack adequate advice.

In this perspective, it is possible to conclude that the new law demonstrates the effort of the state of São Paulo to help entrepreneurs (especially micro and small entrepreneurs) in their interactions with the Public Administration, by bringing to the state legislative framework important provisions.

In any case, it is necessary to observe the application of article 3, §1 of the code, which provides, in summary, that the good faith of entrepreneurs will be presumed, including in relation to the application of penalties and the judgment of administrative infractions. A hasty interpretation could lead to the understanding that consumers’ rights could be harmed.

At this initial moment, however – based on the context of the promulgation of the code, its provisions, the justifications of the bill, its introductory text, as well as the principles of the law –, we believe that the mentioned provision is predominantly applicable in disputes with the Public Administration, not with consumers. In this sense, it does not seem to us that the provision can be used against consumer protection institutions (such as Senacon and Procon) to presume the entrepreneur's good faith in relation to consumers.

Besides hierarchically superior, the Consumers’ Defense Code specifically governs consumer relations, while the Entrepreneur's Defense Code, as demonstrated so far, aims at relations between entrepreneurs and the State. Thus, it seems to us that the specificity of the laws enable application of both, but in different scenarios.

Therefore, distinctly from the first impression of the Entrepreneur's Defense Code, if the initiative is successful and respects the Consumers’ Defense Code, there may be improvements in the daily performance of entrepreneurs, which can, indirectly, benefit consumers.


[1] Proposed by Deputies Sergio Victor and Ricardo Mellão, both of the New Party.

[2] And it is precisely in the sense of debureaucratization the greatest innovation brought by the code: the possibility of a regulatory sandbox. The concept materializes in granting temporary and exceptional authorization so that entrepreneurs can develop innovative activities through business models and experimental technologies, which will potentially bring even more debureaucratization and incentive for certain entrepreneurial initiatives. Although the initiative seems to be valid, only time will reveal if its application in practice will bring actual benefits.