Single-Member Limited Liability Company – Have you heard of it?
Have you heard about the Single-Member Limited Liability Company and the ease it brings to the lives of Brazilian entrepreneurs?
The sheer amount of bureaucracy involved in opening a business in Brazil discourages many people from starting their own ventures, which is why this company was created to solve that problem.
A Single-Member Limited Liability Company could be the key you need to start your own business!
Several businesses are closing their doors due to the obstacles imposed by the current measures. However, this scenario is showing signs of change.
Stay tuned for the key topics about single-member limited liability companies shared below by Logic Contabilidade, as they were specially prepared to simplify your journey. See them below:
Single-Member Limited Liability Company: what is it and what is it used for?
Main types of companies and the Single-Member Limited Liability Company.
Single-Member Company: the only solution for some professionals
Put this into practice and boost your growth now!
Single-Member Limited Liability Company: what is it and what is it used for?
A single-member limited liability company is a type of legal entity that allows its owner to set up their own business without needing a partner or a pre-defined share capital. Furthermore, it's important to note that, in this type of company, liability is limited.
If the sole proprietorship is the result of greater economic freedom, it plays a fundamental role in the development of the entrepreneurial journey, doesn't it?
Therefore, Provisional Measure 881, or the "Economic Freedom MP," is extremely important because it is responsible for the creation of the single-member limited liability company.
She brought even more freedom and encouragement to Brazilian entrepreneurship by promoting the reduction of bureaucracy in some areas responsible for significant limitations in the conception and consolidation of a business.
It was from there that the new business classification – single-member limited liability company – emerged, to revolutionize the opening of your business.
Therefore, by approving the Economic Freedom Provisional Measure, the State makes clear its intention to promote a social and, consequently, economic transformation in the country.
Therefore, the single-member limited liability company emerges as a development option for you, the entrepreneur, who seeks to set up your own business without the stress that comes with a more restricted company with only one partner.
What are the characteristics of a Single-Member Limited Liability Company?
At SLU we have 3 important characteristics, see below:
Protected Private Assets: existence of limited liability;
No Salary Limit Requirement: there is no need for 100 minimum wages to constitute the share capital when opening a company;
Independence: there is no need for a partner to establish the business.
The regulatory instruction that enabled this impact on the economy was DREI 63/2019. It was responsible for regulating the new business format before the commercial registries.
So, have you heard of EIRELI?
Did you know that understanding the main differences between a single-member limited liability company (EIRELI) and other major legal structures is essential for successfully starting your business?
Pay attention to the next topic to learn about the main legal types!
Entrepreneur considering a Single-Member Limited Liability Company
Main types of companies and the Single-Member Limited Liability Company.
To understand the importance of a single-member limited liability company, you will first need to know about other types of companies, so you can understand how it works.
That said, here are the main types:
Sole Proprietor
Basically, what defines this typology are the following points:
Low initial investment (minimum value of R$1,000.00);
Unlimited liability;
There is no possibility of becoming a partner;
There is no limit to the number of employees that can be hired.
Individual Limited Liability Company (EIRELI)
Learn about the key points that define an EIRELI:
Limited liability;
There is no possibility of becoming a partner;
You need 100 minimum wages to open this type of business;
Choice of any tax regime;
It covers various branches of activity.
Limited Liability Company (Ltda.)
Key points that classify this type of company:
Two or more partners.
Limited liability.
Legal assets are liable for the company's obligations.
There is no need for a predetermined value for the share capital.
Single-Member Limited Liability Company
A major innovation and stimulus for Brazilian entrepreneurs, the single-member limited liability company has the following main characteristics:
Limited liability;
Composed of only 1 single partner (the owner);
There is no requirement for a minimum share capital of 100 minimum wages.
This type of company is an incredible option for those who want to take the next step in growing their business, but don't want to or haven't found the ideal partner.
Note: Understanding the differences between a single-member limited liability company and an EIRELI (Individual Limited Liability Company) is necessary, as the point that differentiates them basically refers to the non-requirement of fully paid-up share capital corresponding to 100 minimum wages.
Now, discover another very important point about the single-member limited liability company below!
Single-Member Business Company: the solution for many professionals
Did you know that through Provisional Measure 881, the single-member limited liability company/single-member business corporation promotes significant changes both for the entrepreneur and for the environment in which this agent of social transformation lives?
Through sole proprietorships, many entrepreneurs, who have encountered various bureaucratic obstacles, can promote socioeconomic changes in the course of their business activities.
Professionals such as accountants, lawyers, doctors, and dentists, for example – if they wish to open a business without a partner and without unlimited liability – will encounter obstacles in a classification such as EIRELI, since, for such a choice, they will need a minimum share capital of 100 minimum wages.
Therefore, they will not be able to opt for the Individual Entrepreneur (EI) classification, as the Income Tax Regulations (RIR) will prevent regulated activities from being carried out under that classification.
Therefore, as a way out of this situation, many entrepreneurs seek a partner. However, this option must be very well thought out, as it could backfire depending on the criteria used for this choice.
Therefore, think carefully about the possibility of having a partner. Make a conscious decision so that you don't have regrets later.
That being said, pay attention to the next topic, because I want to tell you a secret that will maximize your earnings and, consequently, the growth of your sole proprietorship!
Put this into practice and boost your growth now!
You know that having access to information about your single-member limited liability company will make all the difference in your planning and decision-making, right?
Besides the excessive bureaucracy that hinders Brazilians, lacking the necessary knowledge to undertake a successful business venture can be detrimental to the success of your company.
Choosing the best legal structure to meet your needs and having all the necessary resources at your disposal – without the old hassle of dealing with lawsuits that could jeopardize the consolidation of your business – is the kind of measure that anyone who aspires to success would want, right?
However, you must agree with me: entrepreneurship demands a great deal of dedication and a desire for constant improvement, stemming from the relentless pursuit of ever-better results.
Therefore, the best way to optimize your time and performance is by seeking partners who share a worldview and a mindset focused on constant growth.
If you want to boost your business by having all the accounting information you need to make informed decisions at your fingertips with just one click, you're in the right place!
We are Logic, an accounting firm that stands by the entrepreneur.
Our goal is to help you maintain the financial health of your business, regardless of its size, both through our free content and by providing accounting services.
We can also help you open a business or transform your MEI (Individual Microentrepreneur) into an ME (Microenterprise). Visit our website and learn more about our work!
Finally, I invite you to request our contact information to receive a personalized proposal tailored to your business needs.
