New modality of company in Brazil – EIRELI
(Marcela Turani Palhares and Tatiana Metran Armandou)
According to Law nº 12,441, published on July 11, 2011, the Brazilian system of laws has, since January 8, 2012, a new modality of entrepreneurial company.
The EIRELI – Limited liability Individual Company may be constituted by a single person holding the totality of the companies’ corporate capital. Therefore, with this new modality, it is possible to constitute in Brazil single person companies or still to change companies already constituted into this new type of company.
The constitution of an EIRELI will benefit the individual that intends to exploit entrepreneurial activity without the risk that his personal assets be taken into account together with that of the legal entity, and therefore, be liable for any obligations of the company resulting from its entrepreneurial activity.
However, we note that the law regulating the changes in the Civil Code and allowing the constitution of the EIRELI, sets forth some requirements, as follows:
(i) In order to constitute the legal entity with a single individual person, it is necessary to have a minimum paid-up corporate capital of 100 times the highest minimum salary in force in the country;
(ii) The individual person may participate in other companies provided that they are not EIRELIs.
On another hand, the EIRELI offer advantages similar to those of limited partnerships, not having limits to its annual billings and limiting liability to the company’s assets, with exclusion of the individual personal assets.
Limited partnerships having an interest may apply for the Trade Board to change to the EIRELI modality, subject to the compliance with the requirements mentioned above.
The Corporate team of Chenut Oliveira Santiago – law firm is at your disposal to clarify any issues on this topic.