BRAZIL Law and Practice Contributed by: Ricardo Barretto Ferreira da Silva and Camila Sabino Del Sasso, Azevedo Sette Advogados
through cash contributions or assets with meas - urable monetary value. In addition, at least 10% of the cash-subscribed capital must be fully paid in at the moment of incorporation and the remaining balance due within five years. Just like a corporation, the capital of a limited liability company can also consist of cash or assets and can only be increased once the total - ity of the membership interests has been paid in, observing the pre-emptive right of the quota - holders to participate in the increase, according to their interest in the company’s capital. On the other hand, limited liability companies may be formed by a single quotaholder and the payment of at least 10% of the subscribed capi - tal is not required. Additionally, the capital of lim - ited liability companies is divided into ideal parts (quotas), which are allocated among the quota - holders in percentages and are not represented by physical certificates. Given that the number of quotas held by each quotaholder is specified in the company’s AoA, any transfer or assign - ment of ownership of these quotas requires an amendment to the AoA. 3.2 Incorporation Process To form a Brazilian limited liability company or incorporate a Brazilian corporation, the following steps must be taken. • Granting a power of attorney to appoint a legal representative in Brazil – each foreign- based shareholder must appoint a legal representative who resides in Brazil (either a Brazilian citizen or a foreigner with a per - manent visa). This representative must be empowered to: receive process on behalf of the shareholder/quotaholder and represent them before the Brazilian company (eg, in quotaholders’ meetings) and before public
authorities such as the Federal Revenue Service and the Central Bank of Brazil. The power of attorney (PoA) may be changed at any time by issuing a new one and revoking the previous one. The PoA must be signed, notarised, legalised in the country of origin via the Brazilian Consulate, and it will need to go through translation by a sworn public transla - tor and registration with the Registry of Deeds and Documents in Brazil. • Registration of Foreign quotaholders/share - holders with the Brazilian Federal Revenue Service to obtain a federal tax identification ( Cadastro Nacional de Pessoas Jurídicas , or CNPJ) number – after registration, the company has 90 days to inform the ultimate beneficial owner (UBO) abroad and submit the required documentation. • Registration of the foreign quotaholders/ shareholders – foreign quotaholders/share - holders must register with the Brazilian Cen - tral Bank. • Drafting the articles of association/incorpora - tion – this must include the company’s key details such as its name, capital, corporate purpose, and registered address. • The AoA must be registered with the Com - mercial Registry and the Federal Revenue Service and a CNPJ number must be obtained for the Brazilian company. • A bank account must be opened. • Foreign capital must be registered with the Central Bank of Brazil. • Enrolment with tax and labour authorities – depending on the company’s activities and location, registration may also be required with federal, state and municipal tax authori - ties, the Employees’ Guarantee Fund for Length of Service ( Fundo de Garantia do Tempo de Serviço , or FGTS), and social secu - rity authorities.
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