Artigos e Alertas
According to Brazilian Civil Code, limited liability companies (sociedades limitadas), must be formed by at least two partners but may stay temporarily with a single partner for a period not greater than a hundred and eighty (180) days. After this period, if the limited liability company continues to operate with a single partner, it shall be regarded as a common partnership, and the remaining partner shall be liable for all obligations incurred by the company, which means that creditors of the company may have access to partner’s assets to fulfill the company’s obligations.
In many cases, the entrepreneur finds it difficult to reestablish the plurality of partners or want to remain as the sole partner of the company for economic and commercial reasons.
If it is not possible to reestablish the partnership plurality within the mandatory period, there are two alternatives to prevent the limited liability company to be considered a common partnership: dissolution of the company or transformation into an individual limited liability company or EIRELI.
The EIRELI is a limited liability company formed exclusively by a single partner, whether a natural person or legal entity.
The transformation of the limited liability company into a EIRELI is a good alternative to the partner who wants to protect its assets and keep the company business but has no other partner to reestablishy the partnership. However, it is important to keep in mind that to transform a limited liability company into a EIRELI, the capital of the EIRELI has to be fully paid-in and must be at least at least 100 (one hundred) times the highest minimum wage in force in the country (which represents today approximately R$100,000), in addition to the other applicable legal requirements.
Candido Martins Advogados is available for any clarifications.