Limited Liability Company (Ltda.)
Ltda - which accompanies the name of some companies - characterizes the most common form of business organization in Brazil: “A limited liability company”.
The main objective of this form of company is to regulate the incorporation, including the investment of its members to the corporate capital.
The term limited typifies that each member’s participation is based on his / her contribution.
Investments (in cash, real estate or other valuables) or equivalent may be distributed equally or proportionately among the members, as specified in the contract (Articles of Association) at the time of incorporation.
A limited liability company protects the personal assets of each Partner in the event of bankruptcy, since the liability of each quotaholder is limited to the amount of his quota, however all quotaholder’s are jointly liable for the payment of the corporate capital.
Applicable rules and regulations pertaining to Limited Liability Companies –
Responsibilities: The participation of the partners is limited and subject to the payment of the corporate capital that it has committed to invest. If any capital contribution is yet to be fully paid, the member(s) shall be liable for the remainder of the contribution.
Exception: A Limited Liability Company is required by law to have a minimum of two quotaholder’s whom, with few exceptions, need not be Brazilian Nationals and can be either individuals or legal entities. quotaholder’s not resident in Brazil must be formally represented by a person in Brazil who is authorized to receive service of process.
Loss: the distribution of the profits to partners is prohibited, in cases where loss has been incurred on the capital of the company. The major objective of the company is to ensure stability and smooth functioning of its business.
Fiscal Council: The establishment of a fiscal council is optional for Limited Liability Companies. Despite this, it has presented itself as an efficient mechanism for managing the internal actions of the company, including as a means of integrating the visions of all partners.
- Type of Entity: LTDA- Limited Liability Company
- Applicable Law: Federal Law
- Available as a Shelf Company: No
- Time Frame for Incorporation: 15 to 30 days
- Taxation on foreign income: Yes
- Are there any Double Tax Treaties in place: Yes, with 31 Countries
- Default currency of capital: BRL
- Are other capital currencies permitted: Yes
- Minimum registered capital: No
- Authorized Capital: 1, 00 BRL
- Minimum number of directors and managers: Two
- Is it mandatory to appoint Directors / Managers needed: Yes
- Is there any requirement for the disclosure of the final beneficiary of the company: Yes
- Is a Local Office required? Yes
- Minimum number of shareholders: Two
- Meeting place for members: Yes
- Local Secretary Requirement: Yes
- Audit Requirement for Accounts: Yes - Monthly
- Requirement of submitting accounts: Yes
- Are Account Records publicly accessible: Yes
- Requirement of submitting annual declaration: Yes
- Is a change of domicile permissible: Yes
- Bearer Shares: No
- Eligibility for Visa: Yes, for foreign shareholder(s) – minimum capital investment of 150,000.00 BRL