How to choose a corporate type for a company in Brazil?

Companies that want to start their operations in Brazil can face a sea of information when they start planning the business that will be developed. Among the many aspects to be decided, there are the corporate types. After all, how to define a corporate type for the company and what is the importance of this choice?

Each corporate type has its own characteristics, and, depending on each singular situation, one or the other will be the most appropriate type for the business that is intended to be developed by the individual or legal entity. Thus, to better satisfy the wishes of the future corporation, full attention is required while adopting the correct corporate model.

Among the main characteristics to be evaluated are, for example:

1) the liability of the partners, since certain types of companies do not separate their assets from the company;

2) the need to raise financial resources through other sources in addition to the initial investors;

3) the ease to manage and register the business;

4) higher frequency of partner’s participation in company’s the daily life.

Companies should pay close attention while choosing the corporate type

Main corporate types in Brazil:

Initially, a distinction should be made between Simple Organization and Business Organization. Through art. 966, BrazilianCivil Code defines the meaning of entrepreneur: “an entrepreneur is considered to be one who professionally carries out organized economic activity for the production or circulation of goods or services”. Thus, it ends up excluding some activities that are not considered entrepreneurial activities