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The Right to be Lonely

By Eduardo Ludmer*

Just like a person has the right to be single, a legal entity must have the right to choose whether to associate with others or to conduct its business alone.

It took some time for Brazil to finally allow a legal entity to be a single shareholder of a company. When Law # 12,441/2011 came into effect establishing the possibility of incorporating a Single Limited Liability Company (known in Portuguese as “Eireli”), most legal practitioners and scholars thought that this Brazilian peculiarity would be over for both individuals and legal entities. Although the law immediately applied for individuals, it took another 6.5 years for the Department of Business Registration and Integration – DREI to enact Normative Instruction # 38/2017, effective as of May/2017, (“Instruction 38”) revoking Normative Instruction # 10/2013, to finally allow national and foreign legal entities alike to be the holders of an Eireli.

The prerequisite for incorporating an Eireli remains the same: a minimum corporate capital of 100 minimum wages (currently approximately R$97,000.00), which must be paid up upon its incorporation.