Corporations Law No. 6,404/1976: the sociedade anônima (S.A.)

S.A. or Ltda?

Most foreign-owned subsidiaries in Brazil are Ltdas: cheaper to run, fewer publications, no board required. An S.A. makes sense when you need what only it offers — debentures, a listing, institutional investors, a formal board, preferred shares — or a joint venture partner who insists on it. A foreign parent cannot hold an S.A. alone: a wholly owned subsidiary must have a Brazilian company as its sole shareholder (Art. 251), so a single foreign shareholder ends up with an Ltda or a second shareholder.

Shareholders’ agreements

Art. 118 is the reason joint ventures choose the Corporations Law. A filed agreement binds the company: the chair of the meeting must disregard votes cast against it (§ 8), and the parties can enforce it specifically (§ 3). An Ltda whose articles opt into the Corporations Law borrows much of this toolbox.

Managers living abroad

Since 2021 board members and executive officers no longer have to live in Brazil, but a manager resident abroad must appoint a representative in Brazil to receive service of process, for three years after the end of the term (Art. 146).

Dividends and reserves

Profits first fund the legal reserve (Art. 193), then other reserves, and the mandatory dividend under the by-laws or Art. 202 must be paid unless the management reports that the company cannot afford it. From 2026 dividends paid abroad are also subject to the new withholding tax; see our insight on dividends.

Smaller closely held companies

Art. 294 and the following articles relax the rules for closely held companies with revenue up to R$ 78 million: electronic publications and books, simpler profit sharing for managers. Many foreign-owned S.A.s qualify.