[ESTABLISHING A BUSINESS ENTITY IN BRAZIL] 69
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 to have this type of board. If provided for in the Articles of Association, such a board may have a “consulting” function without management powers. Certain reserved matters (such as spin-offs, mergers, liquidation, etc.) depend on the approval of the partners. Additional limitations to management’s authority may be adopted and incorporated into the Articles of Association.
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 functions assigned by law such as general supervision, planning and powers to elect the members of the Board of Officers. Only one third of the members of the Board of Directors may simultaneously be members of the Board of Officers. Certain reserved matters (such as spin-offs, mergers, liquidation, etc.) must be submitted for consideration of and decision by the Board of Directors (if one exists) and the Shareholders Meeting. Additional limitations to management’s authority may be adopted and incorporated into the By-laws. The members of the Board of Officers are elected by the Board of Directors (if one exists), or directly by the shareholders. The members of the Board of Directors are always elected by the shareholders. Mandatory, but the shareholders may decide at each Annual Shareholders Meeting whether it will be convened or not. When convened, the Supervisory Board must comprise 3 to 5 members, who may or not be shareholders, cannot be an officer nor a director, and must be Brazilian residents (no nationality requirement).
Structure
Characteristics of Managers
Board of Directors
Reserved Matters
Election
Managers are always elected by the partners.
Not mandatory. It may be provided for in the Articles of Association, in which case must comprise 3 or more members and their substitutes. Members may be partners or non-partners and must be Brazilian residents (no nationality requirement).
Supervisory Board
ILN Corporate Group – Establishing a Business Entity Series
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