The two most used company forms in Brazil are the Sociedade Limitada (“Limitada”) and the Sociedade Anônima (“S.A.”), roughly comparable in other jurisdictions to, respectively, limited liability companies and corporations. Although Brazilian laws provide for several types of company forms other than the Limitada and the S.A., these other forms have enjoyed virtually no acceptance in practice, especially because most of them provide for unlimited liability of their respective members.
The selection of a Limitada or an S.A. as the company form will take into account the desired ownership structure, legal flexibility, cost and confidentiality considerations, among other factors, as specific circumstances may warrant. According to our experience, the Limitada is the most suitable corporate form for most of the 100% owned subsidiaries. Therefore, the requirements listed below relate to the incorporation of a Limitada. If needed, we can provide you with the requirements for the incorporation of an S.A.
A Limitada needs at least two (2) partners, also known as quotaholders, whether or not Brazilian resident individuals or legal entities. A partner who is not a Brazilian resident must appoint a Brazilian resident as its attorney-in-fact, with powers to receive service of process on behalf of the nonresident partner with respect to company matters. The Limitada shall be managed by at least one (1) manager, who must be a Brazilian citizen or a foreigner resident in Brazil, holder of the appropriate visa.
The incorporation of a Limitada requires the execution of its Articles of Association (Contrato Social) in the Portuguese language. As required by law, some items must be necessarily included in the Articles of Association, including (i) the name of the partners and respective personal data; (ii) the name of the Limitada, which must include its purpose and the expression “Limitada” (or its abbreviated form “Ltda.”) and may not be identical or similar to the name of a pre-existing company; (iii) the address of the head office; (iv) the company purposes, which must be clearly described; (v) the company duration, which may be determined or undetermined; (vi) the company capital and whether or not it is fully-paid and payment term; and (vii) each partner’s participation in the capital and a statement that the liability of each partner is limited to the company’s subscribed capital.
In general, no prior governmental consents or approvals are required for the incorporation of a Limitada. Once the partners or their representatives sign the Articles of Association, the following steps have to be taken in order to have the company fully qualified to do business in Brazil:
- The Articles of Association must be filed and registered with the competent Board of Trade having jurisdiction over the company, together with the powers-of-attorney from the foreign partners (which must be previously translated into Portuguese by an official translator and registered with the competent Registry of Deeds and Documents);
- The company must be registered with the following authorities:
- Federal tax authorities, which will grant to the company a corporate taxpayer identification number. In addition, tax regulations currently require all foreign partners to obtain their own registration with the tax authorities;
- State and Municipal tax authorities. If the company will be solely engaged in rendering services, the State tax identification may not be needed;
- Ministry of Labour;
- Social Security authorities; and
- Export-import agency if the company will be engaged in the importation or exportation of goods.
- The company must obtain a municipal license to do business. This license is obtained together with the municipal tax identification; and
- Once the foreign equity investment is made, it must be registered within 30 days with the Central Bank of Brazil for exchange control purposes.
As a full-service law firm, we have the required expertise to assist and advise your organization with the incorporation of a company in Brazil.