By: André Jerusalem
The text of Provisional Measure (MP) 1,040, approved by the Chamber of Deputies on June 23, 2021, states in its art. 41 about the transformation of Individual Limited Liability Companies (“EIRELI”), as established in Law No. 12,441/11, by the Single-Member Limited Liability Company (SLU), as created by MP 881/2019, also known as the MP of economic freedom, and which was later converted into Law 13,874/2019.
Under the terms of art. 41 of MP 1.040, all EIRELI will be considered as single-member limited liability companies (SLU). In practice, the EIRELI has the same characteristics as the SLU, except for the fact that the EIRELI needs its paid-up share capital to be at least 100 times the national minimum wage.
In summary, below is a comparative table of the main differences between EIRELI and SLU:
|
Type of Company |
Need a partner? |
Share capital |
Personal assets separate from company assets? |
| Individual limited liability companies (EIRELI) |
No |
100x corresponding minimum wage |
Yes |
| Single-member limited liability companies (SLU) |
No |
There is no minimum value |
Yes |
Since SLUs are already regulated in the Brazilian legal system, little will change with the extinction of EIRELIs, but such simplification of corporate types is welcome, since it will facilitate decision-making for entrepreneurs, since the doubt between establishing a SLU or an EIRELI was common.