[ESTABLISHING A BUSINESS ENTITY IN BRAZIL] 66
LIMITADA
S.A.
or assemblies, the Brazilian resident must either be one of the other partners or a lawyer. Until the capital is not fully paid , the liability of the partners is limited to the total amount of the capital. After the capital has been fully paid in, the liability of the partners is limited to their equity interest. The admission of a new partner may be opposed by partners representing more than ¼ of the capital stock, if not otherwise established in the Articles of Association. In addition, the Articles of Association or a partners’ agreement may impose limitations and/or preference rights for the transfer and sale of quotas. May be paid in cash (in the national currency), credits or assets.
The liability of the shareholders will be limited to their equity interest, whether or not the company’s capital is fully paid in.
Liability
The By-laws or a shareholders agreement may impose limitations and/or establish preference rights for the sale of shares.
New Partners/ Shareholders
The same as with the Limitada, but the payment of capital through assets requires a valuation of the assets and an appraisal report prepared by a specialized firm or 3 experts. Only permitted after ¾ of the capital stock is paid in. Shareholders have a preemptive right to subscribe new shares, pro-rata to their equity interest.
Capital Contribution
Only possible if 100% of the capital is fully paid . Partners have a preemptive right to subscribe to new quotas, pro-rata to their equity interest.
Capital Increase/ Preemptive Rights
C. Management
LIMITADA
S.A.
Minimum of 1 manager. Although optional, it is very uncommon to have Board of Directors in a Limitada. Managers may be partners or non-partners and may be foreigners and/or non-residents (no nationality requirement). The foreign Manager must be represented by a Brazilian resident for purposes of receiving service of process and relevant power of attorney must be valid for 3 years following the date on which the Manager ceases to be a Manager of the Limitada. There are no specific requirements for a Board of Directors in a Limitada, and it is uncommon for it
Board of Officers with at least 1 member (mandatory). May also have a Board of Directors with at least 3 members. Members of the Board of Officers and Board of Directors may be foreigners and/or non-residents (no nationality requirement). The foreign Officers/Directors must be represented by a Brazilian resident for purposes of receiving service of process and relevant power of attorney must be valid for 3 years following the date on which the Officer/Director ceases to be an Officer/Director of the S.A. In general, not required, but if formed, the Board has a more “robust” purpose, with exclusive
Structure
Characteristi cs of Managers
Board
of
Directors
ILN Corporate Group – Establishing a Business Entity Series
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