There are two major kinds of companies allowed to operate within the country. They are Sociedade Anônima (S.A.) and Sociedade Limitada (Ltda.) known as Corporations and limited liability Companies respectively. The registration of business structures is authorized by the Brazilian Corporation Law (Law No. 6,404, of December 15, 1976). Certain corporations are subject to specific regulations of the Brazilian Securities Commission (Comissão de Valores Mobiliários) (“CVM”), according to Law No. 6,385 of December 7, 1976. All corporations have separate legal personalities and no limit to existence. The corporation is generally governed by its By-laws (Estatuto Social), usually registered before the Board of Trade (Junta Comercial). During incorporation, the desired name of the corporation needs to include Companhia, Sociedade Anônima, or S.A. but does not necessarily have to indicate the company’s purpose of business. Shareholders are not liable for the entity’s obligations after they have paid the subscribed shares. The corporation must be managed by a Diretoria, a Board of Directors (Conselho de Administração), and an Audit Committee (Conselho Fiscal), tacked with supervising the directors and officers of the Diretoria.
If you are interested in forming this company here, or simply interested in learning about a corporation, this guide provides information on registering a Sociedade Anônima (S.A.) in Brazil and its process of incorporation.
Features of a Sociedade Anônima (S.A.)
The following are some of the features of a corporation operating in this country:
- Except for a completely owned subsidiary, it must have at least two owners and a Brazilian incorporator
- All shareholders can be persons or entities residing in the territory or abroad.
- Foreign partners need to appoint legal representatives in the country.
- The diretoria must consist of at least two officers, who must reside in Brazil
- The Board of Directors must consist of at least three members, who may not be domiciled
- The Audit Committee has to consist of no less than three to five members of Brazilian residents.
- Shareholders must pay 10% of subscribed shares to Banco do Brasil S.A. or another authorized institution
- A corporation account has to be opened after its incorporation
The process of incorporation
- Establishing a corporation within the country is simple. The process includes the following steps: subscribing of the entire allotted share capital by shareholders,
- Payment of at least 10 percent of the subscribed capital in banco do brasil s.a.,
- Registering the shareholder’s incorporation meeting minutes and bylaws with the local board of trade
- To be published in the official gazette
- Opening corporate books
- Preparing required documents for the registration of shareholders, officers, and directors,
- Registering the corporation with the Brazilian federal tax authority (receita federal),
- Acquiring business licenses and permits, involving a public notary, company register, etc.
The costs of the process include legal fees, notarial fees to legalize foreign documents, fees charged by fiscal agents for legal representation (if necessary), etc. The costs vary depending on the location, type of activities, number of partners, etc.
Information to be provided during the incorporation
The following is some of the information to be filed with the Board of Trade and then made publicly available:
- By-laws
- Name and address of the place of business
- Activities of the corporation
- Capital amount, terms of payment, and share quotas of the shareholders
- Period of existence
- Details of the managers
- Management structure
- Details of the partners, etc.
Costs of running a corporation
The annual costs for maintaining a corporation depend on the activities it engages in, its size, and the number of branches and employees, amongst others. A company has to maintain its business address, have officers and directors and employ workers.
