Setting up a Business in Brazil

Overview by Globlatrade.net:

Legal Forms of Companies

Types of Companies and Capital (Max/Min) Number of Partners/Shareholders and Liability Registration Fees
La Sociedade a responsabilidade limitada is a limited liability company .
 
 
No minimum capital.
2 partners maximum.
 
 
Their liability is limited to the amount of capital contributed. They are also jointly liable for the company's commitments within the limit of the capital remaining to be paid up.
Cost of the registration to the State's commercial office where the company is located: BRL 59.06; Registration to the municipal taxpayers's register: BRL 300.
La Sociedade anonima is a public limited company.
 
 
No minimum capital.
NB: 10% minimum of the issue price of the subscribed shares must be paid up in cash.
2 partners maximum.
 
 
The partners' liability is limited to the amount of capital contributed.
Cost of the registration to the State's commercial office where the company is located: BRL 59.06; Registration to the municipal taxpayers's register: BRL 300.
The general partnership.
 
 
No minimum capital.
n.c.
 
 
Their liability is joint and indefinite.
Cost of the registration to the State's commercial office where the company is located: BRL 59.06; Registration to the municipal taxpayers's register: BRL 300.
The limited joint-stock partnership.
 
 
No minimum capital.
There are two types of partners, the active partners and the silent partners.
 
 
The liability of the active partners is unlimited. The liability of the silent partners is limited to the amount of capital contributed as long as they do not participate in the management of the company.
Cost of the registration to the State's commercial office where the company is located: BRL 59.06; Registration to the municipal taxpayers's register: BRL 300.
 
 

Business Setup Procedures

Administrative Formalities
The Articles of Association (Contracto social for an SARL or Estatuto social for an SA) must be drawn up in Portuguese by a lawyer. Company registration is carried out either at the Register of Commerce ( Junta Comercial), or at the Civil Register of legal entities ( Registro Civil das Pessoas Judicias) according to the nature of the company. A study is carried out to see if the name of the future company already exists. Then you have to register at the local agency of the Cadastro Nacional de Pessoas Juridicas (CNPJ); then, once you have proof of registration, at the municipal authorities of the company's location.
The Competent Organization
All necessary information is on the SEBRAE website. It is also possible to make an application for registration by Internet. It is advisable to call on a lawyer for assistance.
Time Necessary for Registration
Two weeks for a "limitada", except for an extra authorization from the government for certain activities. Up to six months for the creation of a subsidiary company.
 

Recovery Procedures

Principle
Law 11 101 of 2005 simplified bankruptcy, recovery and repurchasing procedures in order to favor creditors and fluidify credit. The new system enables minority creditors who are too insistent to be marginalized and favors dialogue between debtor and creditor in order to perpetuate the activity of the company. The priorities in reimbursing debts in the case of bankruptcy are according to several categories: the employees (within a limit of 150 salaries minimum), then the fiscal administration, then the other creditors according to the preferential rank given to their claims.
Minimum Debt-to-Capital Ratio Triggering Liquidation
A creditor or an association of creditors can claim bankruptcy if the debtor cannot reimburse his debts at the required date, from an amount equivalent to 40 salaries minimum.
Bankruptcy Laws
LEI N o 11.101, DE 9 DE FEVEREIRO DE 2005. (Law 11.101 of 9 February 2005)
Reorganization and Rehabilitation Laws
Legal and extra-legal stabilizing procedures are always possible. In the first case, under the direction of a judge and with the agreement of some of the creditors (at least 1/3 of the claims in each category and the majority for two of them), all debts are suspended for a maximum of 6 months to leave the debtor company the time to reorganize the payment of its debts. In the second case, there is a simple renegotiation and rescheduling of the debt between the company and its creditors, but it requires the agreement of the creditors who hold at least 60% of each category of debt. The same law as for bankruptcies governs legal stabilizing.

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