Defining the legal structure for entrepreneurs starting a business is an important step in opening a company. This structure refers to the legal form by which the company will be constituted and operated. 

There are different types of legal structures available for entrepreneurs to choose from, such as individual entrepreneur, limited liability company (Ltda.), joint-stock company (S.A.), among others. Each structure has specific characteristics and requirements that should be considered based on the nature of the business, the number of partners, financial responsibilities, and the protection of the entrepreneurs’ personal assets.

Empresário Individual 

It does not have partners, meaning the entrepreneur himself carries out a certain business activity – it can be a microenterprise (MEI) or a small business (EPP) – in his own name. Its classification depends on the annual revenue – below R$360 thousand falls into the first case, while between R$360 thousand and 4.8 million, the second. 

Sociedade Limitada (Ltda.) 

It constitutes a company formed by one or more partners, with a division of responsibilities detailed in the articles of association. The model is very common in Brazil since it allows for the separation of personal assets from the assets of the legal entity. 

Sociedade Anônima (S/A) 

Type of company formed as a joint-stock company, where its capital is divided into shares. That is, the participation and responsibility of the partners or shareholders are defined by the number of shares they own. Typically, this type of company is adopted by businesses that start with a high investment and aim for significant growth. 

Do you know how taxation works for entrepreneurs in Brazil? Click here to find out. 

Our team is ready to help you choose the correct legal structure for your company. Talk to our specialists.