When opening a company in Brazil, one of the first steps is to choose the legal nature of the company, which defines the legal regime and the responsibilities of the partners or entrepreneur in relation to the business.
The legal nature influences tax issues, the personal assets of the partners, the form of incorporation and the type of control exercised over the company.
In this article, we will detail the main legal natures of companies in Brazil so that you can make a more informed choice.
What is the Legal Nature of the Company?
- Individual Entrepreneur (EI)
- Limited Liability Company (LTDA)
- Public Limited Company (S/A)
- Simple Company (SS)
- Individual Limited Liability Company (EIRELI)
- Single-Member Limited office 365 database Company (SLU)
- Cooperative
Individual Entrepreneur (EI)
The Individual Entrepreneur (EI) is a find out which drinks form in which the entrepreneur acts individually, that is, he does not have partners. The individual entrepreneur is liable for the business’s debts with his own assets, since there is no separation between personal assets and the company’s assets. Some important characteristics are.
- Unlimited liability: the chine directory is liable for the company’s debts with his personal assets.
- Simple constitution: the opening process is simplified.
- Suitable for small businesses.
Limited Liability Company (LTDA)
The Limited Liability Company (LTDA) is the most common legal form in Brazil. It is made up of two or more partners, whose liability is limited to the value of their shares in the company’s share capital. In a LTDA, the partners’ personal assets are not affected by the company’s debts, except in cases of fraud or mismanagement. Its characteristics include:
- Limited liability: partners are only liable for the value of their shares.
- Flexibility in management: allows the creation of personalized social contracts.
- Suitable for medium to large companies.
Public Limited Company (S/A)
A public limited company (S/A) is a legal form in which the share capital is divided into shares, and the shareholders’ liability is limited to the value of the shares they own. S/As can be publicly traded (with shares traded on the stock exchange) or privately held. Characteristics include:
- Liability limited to the value of the shares.
- Capital divided into shares.
- Recommended for large companies seeking external investment.
Simple Company (SS)
The Simple Society (SS) is at professionals. Who provide intellectual, scientific, literary or artistic services, such as doctors, lawyers and engineers. In this legal form, the partners are unlimitedly liable for the company’s obligations, but liability may according to the articles of association. Some characteristics are:
- Performance in regulated professions.
- Partners’ liability may be unlimited or limited.
- Suitable for independent service providers.
