[ESTABLISHING A BUSINESS ENTITY IN BRAZIL] 68
LIMITADA
S.A.
Until the capital is not fully paid in, 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.
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 bylaws or a shareholder’s 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 require 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. The same as with the Limitada, but changes to the By-laws require approval of shareholders representing more than 50% of the total votes granted by virtue of voting stocks.
May be paid in cash (in the national currency), credits or assets.
Capital Contribution
Only possible if 100% of the capital is fully paid in. Partners have a preemptive right to subscribe to new quotas, pro-rata to their equity interest. The following actions, among others, require the amendment of the Limitada’s Articles of Association, subject to approval by partners that hold more than 50% of the share capital:
Capital
Increase/
Preemptive Rights
Amendments to the governing documents
• change of the corporate name, address, purposes or duration;
• changes to the capital stock (increase or reduction)
changes to management provisions.
ILN Corporate Group – Establishing a Business Entity Series
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