There are two major types of legal incorporation of business in Brazil, aside from sole proprietorships and family businesses. Major corporations generally fall into one of two categories: S.A.’s (anonymous societies) or Ltda.’s (limited companies).
Limited companies are covered by the Brazilian Civil Code whereas anonymous societies are governed by a specific federal law that deals with this form of legal organization. A limited company, as the name implies, is made up of partners who have limited liability, and are therefore, under normal circumstances, only responsible for their capital contribution. However, the capital contributions are pooled together, and all of the partners are responsible up to that amount collectively. In addition, members of a limited company by definition are partners and are normally involved in the day-to-day operations of the business.
In contrast, partners in anonymous societies are shareholders, and the daily operations are relegated to a professional hierarchy governed by a board of directors. Also, as shareholders, they are only responsible for the amount of the contribution they made. Thus, larger companies tend to be anonymous societies, while smaller businesses, such as consulting companies are often limited companies.
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