Each corporate type has its own characteristics and legal requirements, making the correct choice crucial for your company’s success. Whether you are an individual entrepreneur or part of a group of partners, Brazil offers several options. Let’s get to know the main ones:
- Sole Proprietorship (Empresário Individual, EI): This is the simplest form, where an individual runs a business in their own name. It’s ideal for those who want to start their own business alone, but it’s important to be aware of the unlimited liability, where the entrepreneur is personally liable for debts with their own assets.
- Individual Microentrepreneur (Microempreendedor Individual, MEI): An even simpler option, aimed at small entrepreneurs with annual revenues of up to R$ 81,000.00 (value for 2024). MEI offers simplified taxation, access to social security benefits, and minimal bureaucracy; however, it also has unlimited liability.
- Limited Liability Company (Sociedade Limitada, LTDA): The most common form for those who want to start a business with partners and limit their liability. The capital is divided into quotas, and each partner’s liability is limited to the value of their subscribed quotas, protecting their personal assets, except in cases of fraud.
- Single-Member Limited Liability Company (Sociedade Limitada Unipessoal, SLU): Ideal for those who want all the benefits of an LTDA without the need for partners. You can start your company with just one partner, without the requirement for minimum capital, unlike the old EIRELI.
- Corporation (Sociedade Anônima, SA): A more complex model, suitable for larger companies that seek to attract investments. The capital is divided into shares, and the shareholders’ liability is limited to the value of their shares. There are two types: publicly traded (shares traded on the stock exchange) and privately held (without such trading).
- Simple Partnership (Sociedade Simples): Intended for professionals who provide intellectual services, such as doctors, lawyers, and engineers. The focus is on providing services, and liability can be either limited or unlimited, depending on the partnership agreement.
- General Partnership (Sociedade em Nome Coletivo): Less common, consisting exclusively of individuals. All partners have unlimited and joint liability, meaning all partners are personally liable with their own assets for the company’s obligations.
- Limited Partnership (Sociedade em Comandita Simples e por Ações): Divided into two types. In the Simple Limited Partnership, there are two types of partners: the general partners (unlimited liability) and the limited partners (limited liability). In the Limited Partnership by Shares, the capital is divided into shares, and the general partners still have unlimited liability.
- Silent Partnership (Sociedade em Conta de Participação, SCP): Less common, frequently used in specific operations, especially for short-term projects or businesses. The SCP has two types of partners: the active partner(publicly known and deals with third parties) and the silent partner (invests capital but remains invisible in the operations). The SCP is flexible and does not need to be registered with the Commercial Board since it is an unincorporated partnership.
- Cooperative: Formed by a group of people with common interests for the mutual provision of services, without profit motives. The members contribute capital and receive results proportionally to their participation.
The choice of the ideal company type will depend on your business characteristics, number of partners, and objectives. It is essential to seek guidance from specialists to make the best decision. At ORGATEC, we are ready to help you choose the right path for your company’s success.