When operating in a global economy, it is important to understand numerous legal facets of each country you are operating in, importing to or exporting from. If you are considering forming business relationships within the Brazilian marketplace, it is important to understand Brazil’s standard business structures.
Currently, the two most common Brazilian business structures are the Limitada and the Sociedad Anônima (SA).
- Limitada: The limitada represents a mixture of a company and a common partnership, similar to the English Limited Liability Partnership and the Delaware Limited Liability Company. This type of entity requires more than one partner, with each partner acting as a shareholder of the company. The personal liability of each partner is limited. However, the partners can still be held liable under the Brazilian Labor Law and Consumer Defence Code for things such as unpaid company taxes, some debts and even environmental damage. Limitadas must appoint at least one administrator who is either a Brazilian citizen or permanent resident living in Brazil.
- Sociedade Anônima: The Sociedade Anônima, or SA, is similar to a US corporation. It is divided by shares and offers greater personal liability to the company’s shareholders than the limitada. SAs must be audited with their balance sheets published annually. They must also have an executive and advisory board; all directors must permanently reside in Brazil. Members who only reside on the advisory board can live anywhere. SAs may be publicly or privately held.
Before selecting which business structure is ideal for your business needs, it is recommended that you consult with a Brazilian lawyer who is well versed in the international market. Choosing the right business structure will not only improve your ease of doing business, but can also offer liability protection to the partners/shareholders.