To start a business, there are different modalities in which the business or society fits, from the moment of registration. The definition of the type of a company takes into account the size of the business, since its creation, and may change as it fits into other types.
The registration must be done with care, because the way in which the business is registered is what defines the obligations to be followed, especially regarding taxes.
According to abbreviationfinder, the main existing types of company are:
- Individual Entrepreneur (IS);
- Individual Microentrepreneur (MEI);
- Individual Limited Liability Company (EIRELI);
- Simple Society (SS);
- Limited Business Company (Ltda)
- Limited Company (SA);
Understand below the characteristics of each type of existing company, for entrepreneurs who want to develop the business as sole owner, or in companies.
Types of companies for individual entrepreneurs
Individual Entrepreneur – EI
The EI is the category for companies that perform their activities with a single owner, who has unlimited responsibility over it, which involves their personal finances with those of the company.
To constitute a business in this category, activities must be exclusively entrepreneurial, and not just intellectual and autonomous, as in the case of doctors or artists, for example.
It is possible for the individual entrepreneur to check if it is possible to fit into a more advantageous option, as in an MEI, or in an EIRELI, which we discuss in the following topics.
Individual Microentrepreneur – MEI
The MEI is a category created in recent years by the Brazilian government, in order to facilitate the recognition of professionals who fall into this category.
To register as an MEI, the individual entrepreneur can have an annual turnover of a maximum of R $ 81 thousand, in addition to having only one employee.
This type of business offers the entrepreneur the possibility to collect taxes in a unique way, through Simples Nacional.
Individual Limited Liability Company – EIRELI
For individual entrepreneurs who want to have their own business and at the same time limited liability only on the business, it is possible to form an EIRELI.
The business is required to start with a capital of at least 100 times the minimum wage in force in the period.
This is the best type for those who think of being the sole owner of their own business and still have their personal finances separate from the company.
Types of business partnerships
Simple Society (SS)
A partnership is made up of two or more members who share the command of a business. This type, simpler, is common when professionals who perform the same activities, come together in the same place, as is the case of medical offices, for example.
The liability of the partners, in this type of partnership, is unlimited, which can involve their personal finances in the business. However, it is possible to formalize a limited liability company, known as Sociedade Simples Ltda.
Simple companies are registered with the Civil Registry of Legal Entities, for companies formed for intellectual, scientific, artistic or literary activities, which do not constitute the element of the company.
Limited Business Company (Ltda)
This is the correct society for those who form a company, consisting of activities for the production of goods or services, registered with the Board of Trade.
The formation of the company takes place with the investment and participation of each partner, who have their shares divided into quotas.
Financial liabilities are always limited to the company’s own capital and are included in the bankruptcy law.
Limited Company (SA)
A limited company, better known as SA, is a kind of limited company, with the presence of shareholders, due to the fact that the capital is divided into shares.
The company SA can be considered publicly traded, when the shares can be sold to anyone, or closed when it is only possible for shareholders or internal partners.
Classification of company sizes
Companies are also classified according to size, which is defined by the potential that economic activity reaches.
Therefore, indicated by gross annual revenue, businesses can be classified as:
Microenterprise (ME) : annual revenue of up to R $ 360,000.00;
Small business (EPP) : annual revenue between R $ 360,000.00 to R $ 4,800,000.00;
Medium-sized company : annual revenue from R $ 4,800,000.00 to R $ 6,000,000.00;
Large company : annual revenue from R $ 6,000,000.00.
There is also the classification indicated for those who want to be an Individual Microentrepreneur (MEI), who cannot have their annual turnover above R $ 81,000.00, as previously mentioned.
The framing of companies is what defines which tax collection and collection regime should be carried out, and through Simples Nacional it is only possible, at most, for EPPs.