The Language of Business Entities in Brazil

By Danilo Nogueira (Professional translator, editor, writer, consultant, trainer) Brazil danilo.tradutor@uol.com.br

Simply stated, it is not the same thing. Take a car, for instance. Brazilian engineers and American engineers (or Chinese engineers, for that matter) will discuss cars using different languages, but they will be discussing a carand a car is a car, a definite plus, at least as far as translation is concerned. I can translate carburador as carburetor and be reasonably sure I will not be misunderstood. In our globalized world, there is even a good chance that the Brazilian and American mechanics will use carburetors made by the same company using the same drawings and specsprovided they are talking about cars that still use carburetors, that is. The law, however, is something different. A sociedade por quotas de responsabilidade limitada is not a limited liability company in the same sense a carburador is a carburetor. One may say that this makes legal texts more difficult to translate than, say, scientific texts. Possibly, but that is beside the point. The problem is it makes translations of legal texts necessarily less precise than those of scientific texts. To make things worse, the English-speaking world is composed of many countries, with differing legal and tax systems. A Partnership is one thing in the U.S., something else in England and something else again in Scotland, not to think of all the other countries, minor and major, where English has official or quasi-official status. Finally, English is the new koine, the universal default language. Every professional seems to be able to grope his or her way through an English-language text. Evidently, foreigners will often construe a text written in English in agreement with their own cultural backgrounds. What a Slobovian accountant who picked up some English from an Irish teacher will make of a Brazilian legal text translated into American English I dare not guess. In other words, even if we could provide a precise translation into one of the several existing standards, we can never be sure that it will be understood as we meant it to be. Consequentlyand regrettablyit is impossible write a nice little article saying Brazilian X corresponds to English Y. The best one can do is analyze Brazilian terms and suggest translations, pointing out a few of the more dangerous traps they hide. It is up to individual translators to deal with them in agreement with their own audiencesprovided they know what that audience will be. Suggestions given here are based on the American legal system, with which I am a bit more familiar, and that presents an additional problem, for different states have slightly different ideas of what a corporation should be. But that, of course, is part of the fun. Fortunately, the matters dealt with here are regulated by federal law in Brazil. So, an S/A will be an S/A, no matter in which Brazilian state you are. That, of course, spoils part of the fun.

Direito Societrio Let us begin our safari with Direito societrio. Direito societrio is the branch of law that deals with sociedades. Sociedade, here does not mean society in the sociological sense, but two or more individuals or entities joining means and efforts for the same purpose.

Sociedade is loosely used in the same manner as company is often used in English, to denote any type of business organization. In that case, it is shorthand for sociedade comercial. Brazilian Portuguese has companhia, but it applies strictly to a sociedade annimanot to partnership-like organizations. And allow me to point out that company has many subtle shadings of meaning besides the loose concern of some sort.

Sociedades Comerciais (governed by the Commercial Code) Brazilian law provides for six basic types of sociedades comerciais (merchant companies, trading companies, commercial companieswhere company is used in its general sense). Those may be divided into three groups. The first group includes four partnership-like types, where at least one partner must have unlimited liability. This includes sociedade em nome coletivo, sociedade em comandita, sociedade de capital e indstria and sociedade em conta de participao. The four are dealt with in the original Commercial Code of 1850. The second group includes only the sociedade por quotas de responsabilidade limitada (Ltda, Limitada), added to the original types by Decree 3708/19 (the number after the slash indicates the year of issue or promulgation). Although it is not mentioned in the original Commercial Code, it's governed by it. The third group includes the two types of the sociedade annima or sociedade por aes (S/A). The S/A was dealt with in five paragraphs in the original Commercial Code but has grown to a very complex type of business organization, governed by a separate law (6404/67). All sociedades comerciais are pessoas jurdicas (corporate bodies, legal entities, artificial persons) and subject to imposto de renda das pessoas jurdicas (corporate income tax) at the same rates and under the same conditions. This will often surprise persons from countries where you can set up a partnership which is not a legal entity or is seen as a veculo (conduit) for income and not as a taxable entity (entidade tributvel). Group One: Partnership-like forms of business organization The simplest form of merchant company is the sociedade em nome coletivo (general partnership) where all partners have responsabilidade ilimitada (unlimited liability). In a sociedade em comandita simples (limited partnership, special partnership, partnership in commendam), at least one scio comanditado (general partner) has unlimited liability and one or more scios comanditrios (limited partners, special partners, dormant partners) have responsabilidade limitada (limited liability). A sociedade em comandita por aes is a variant where ownership interests may be freely transferred, as in a joint stock company. Then we have the sociedade de capital e indstria, a form of secret partnership where a nameplate scio capitalista (general partner) has unlimited liability and a scio industrial (working secret partner) has no liability and invests nothing but work. The last type in this group is the sociedade em conta de participao (SCP), another form of secret partnership in which the scio oculto (secret partner) is not a working partner, but usually an investor who prefers to remain unknown and assumes no liability for the partnership. The scio ostensivo (nameplate partner, acting partner possibly also ostensible partner, a dangerous choice because it may also be construed as someone who is a partner only in name) is the only one to appear as such before the public and is the only one with any liability for the business. Because SCPs are governed by private agreements not registered anywhere, it is impossible to determine their number. SCP is sometimes used as a translation for joint venture. This, however, is wholly inappropriate, because the essence of a sociedade em conta de participao is the secret partner. Group Two: Limitadas Now we are getting serious. The types of business organization referred to above as

group one are now very rare, virtually obsolete. Practically all businesses are now organized as limitadas or S/As. Most of them start as limitadas, even if only as a stepping stone to becoming an S/A later on. The Limitada is a transitional type between the first group and the S/A. Limitadas are similar to a limited liability company (LLC) of the type now becoming popular in the U.S. Limitadas offer limited liability, flexible management and distribution of income and losses. In theory, personal liability in a limitada is limited to the companys capital stock. However, the articles of organization normally include a (fully legal) provision limiting liability to each members own share in the company. Unlike LLCs, limitadas are always taxed as corporationsthe pass-through method does not apply to Brazilian sociedades comerciais. A limitada is formed by filing a contrato social signed by the scios quotistas who hold quotas in the sociedade. If we treat the limitada as a form of partnership, we should say a limitada is formed by filing a partnership agreement signed by the partners, who own an interest in the partnership. If we equate it with an LLC, which, in my view, is a great deal more precise, we should translate that as a limitada is formed by filing the articles of organization signed by the members who own an interest in the company. However, Brazilian translatorial tradition does not follow that path. Most texts originating in Brazil would put that sentence as a limitada is formed by filing the bylaws (or: articles of association) signed by the partners-quotaholders who own quotas in the company. Articles of association does not seem to be frequent in U.S. usage. In U.K. usage it is frequent, but means a document covering matters such as meetings, powers of the several directors, election of officers and so onapproximately what would be called bylaws in the U.S. The contrato social includes this information, but must also include information on name, address, object, partners and capital, among other things. This, in the U.K., is part of the memorandum of association, which approximately corresponds to American articles of incorporation. In fact, both apply to companies, or to what the Americans would call corporationsnot to partnerships. Bylaws is common in the U.S. as a set of rules on the government of a corporation or associationbut would hardly be accepted as a synonym for partnership agreement or articles of organization. Owners of a limitada are called quotistas, or, more precisely, scios quotistas, because Brazilian law distinguishes between quotas and aes. A quota is a unit of interest in a limitada and cannot be freely transferred, neither can it be attached in bankruptcy proceedings. An ao is a share in an S/A and can (usually) be freely transferred or attached in bankruptcy proceedings. There, of course lies a difference. Thus, many translators insist on translating ao as share and quota as quota. This, it seems to me, is extending the sense of English quota a little too much. Calling a scio quotista a partner-shareholder, however, is decidedly going too far. It may placate several of the demons tormenting the translators conscience, but is of very little help to the readerunless the reader is Brazilian, of course. In my opinion, if you balk at the idea of translating quota as plain share, you might try something like share of interest or unit of interest, which preserves the idiomatic interest and does not use the unidiomatic quota.. Curiously, the very idea of a quotista owning a large number of quotas is an innovation not contemplated in the original Decree. The decree states that each scioquotista would have a quota in the capital.... That, of course, can easily be translated as each member shall have an interest in the capital.... The articles of organization for a limitada may be very complex, a monument to the skill of a group of international lawyersor a couple pages of boilerplate put together by an unsophisticated storefront accountant to set up John Doe and his wife as owners of a fruit stall around the corner. Group Three: Sociedades Annimas The sociedade annima or sociedade por aes, or still, but rarely, companhia has been described as a joint stock corporation (as opposed to a sociedade em comandita por

aes, said to correspond to a joint stock company). Probably a good description. I have sometimes seen Brazilian corporationnot that I like itbut the term is falling out of fashion. An S/A may be de capital fechado (closed) or de capital aberto (public). In both cases, capital social (capital stock) is divided into aes ordinrias (common shares) and aes preferenciais (preferred shares) held by acionistas (shareholders). If the text discusses S/As de capital aberto and de capital fechado, the nature of the organization will be made obvious and plain corporation will do as a translation. S/As are governed by an estatuto social (articles of incorporation). In many cases, there are acordos de acionistas (shareholder agreements) under which shareholders mutually grant or waive rights. Thus, shareholders may agree on certain restrictions on their right to freely dispose of their shares. S/As de capital fechado may not offer securities to the public. This is the privilege of a S/As de capital aberto. To abrir o capital (go public) an S/A must file an application with Comisso de Valores Mobilirios, abbreviated CVM, a federal agency that is patterned after the US Securities and Exchange Commission and whose name should thus be translated as Brazilian Securities and Exchange Commission or something to the same effect. Curiously, CVM is often called Brazilian Securities Commission in English by people who think the exchange in the SEC stands for foreign exchangewhich it does not. The Government holds a controlling interest in several S/As, known as sociedades de economia mista (government-controlled companies) , the economia mista here meaning part-governmental, part private, from the standpoint of economics. Joint ventures, consortiums, syndicates etc. Neither the Commercial Code, nor later legislation contains special rules regarding joint ventures (joint ventures), or consrcios (syndicates). Consequently operations of those types are governed by agreements between the parties. A word of caution is required in the case of consrcio which often means a specific type of mutual association whose members pool resources to buy some item (from VCRs to heavy trucks) one for each memberunder conditions considered advantageous. Consrcios of this kind are managed by specialized firms and supervised by the Central Bank. In some cases, courts may decide that there is a sociedade irregular or de facto (partnership in practice, partnership in effect, de facto partnership) between two or more individuals who have failed to form one de direito (pursuant to law, de jure). In other cases, courts may decide the sociedade was formed for fraudulent purposes and desconsiderar a pessoa jurdica, literally, to ignore the legal entity, sometimes referred to as lifting the corporate veil in English. Foreign Investment Most foreign investors operate in Brazil through resident companies organized in one of the above forms. Any operation organized in Brazil, under one of those types is a sociedade brasileira (Brazilian company, better: resident company) no matter how much of its capital is owned by foreign investors. For a short period, there was a distinction between empresa brasileira de capital nacional (resident company controlled by domestic investors) and empresa brasileira de capital estrangeiro (resident company controlled by foreign investors). This distinction has been repealed. A dwindling number of foreign investors operate through filiais (branches). Because it is considered far easier to run a resident subsidiria (subsidiary), most companies have quietly opened a subsidiary and transferred assets and operations to the resident company. Management Titles of management positions vary wildly from company to company. In addition, there may be some difference between legal requirements and actual managerial practice. Limitadas are required to have a scio-gerente (managing partner). In a large outfit, the managing partner may be a foreign corporation and power may be in the hands of a resident gerente delegado (representative, delegate, deputy). Often, the managing

partner or delegate is known to the public as diretor, which may vaguely be translated as managing director. A gerente (manager) is often a professional manager, whereas the scio-gerente must own an interest in the limitada and is not necessarily involved in actual day-to-day Management. That, of course, very much depends on the size of the concern, for a limitada may be a storefront operation or a very large concern with several branches. Daily management of an S/A is in the hands of its diretoria. Diretores may be professionals, but, as often as not, the diretor-presidente is the founder of the business (or a member of his family) and its controlling shareholder. The other diretores may be personal friends or members of the immediate family of the diretor-presidente. A conselho de admnistrao is optional for S/As de capital fechado, but mandatory for those who have gone public. A conselho fiscal, elected by the shareholders, is required to report on the audited financial statements. This structure creates a host of problems. A client of mine, after much pondering, arrived at the conclusion that the diretoria of his company (in this case, professional directors of a large multinational) was its executive committee and the diretores its executive officers. He called his diretor presidente a chief executive officer and his diretor financeiro a chief financial officer. He also called his conselho de administrao a board of directors. Finally, he called his conselho fiscal a conselho fiscal, merely placing the Brazilian expression between quotes on the grounds that there was nothing anywhere in the world that could be considered equivalent to that body. In fact, he thought the conselho fiscal had merely ceremonial functions. This seems to be perfect. However, a Brazilian diretor usually has strong objections against this: diretores want to be directors. In their opinion, conselho de administrao may very well be a board. But it cannot be a board of directors. To complicate matters, the Brazilian conselho de administrao seems to be a lot less powerful than a board of directors, anyway. It is often insisted upon that the conselho fiscal be translated as board of supervisors, or even audit committee, although some larger S/As are developing comits de auditoria entirely separate from the conselho fiscal. Conselho fiscal is often translated as fiscal councilan aberration that is often unavoidable Often translation of an annual report involves lengthy and not altogether satisfactory negotiations concerning the names of those officers and organs. Usually, a liberal use of capitals helps.

Firmas Individuais and Autnomos Of course, you can work for and by yourself. In that case, you can chose between starting a firma individual (individual proprietorship) a form of operation almost extinct, or becoming an autnomo (self-employed), which is very common.

Sociedades Civis (created under the Civil Code) The Commercial Code governs sociedades comerciais only, but not all sociedades can be classified as commercial. Translators for instance cannot form S/As, because they are not in commerce. Translators must operate as sociedades civis, abbreviated SC (companies organized under the civil code). I hold 50% of a sociedade civil, the other 50% being held by my wife. Ours is a sociedade civil por quotas de responsabilidade limitada, very much like a commercial sociedade por quotas de responsabilidade limitada, except that we are subject to different bankruptcy proceedings properly referred as insolvncia civil (insolvency under civil law procedures). We are barred from engaging in commerce. Lawyers and some other professionals must operate in sociedades civis plain, meaning with unlimited responsibility, and thus very similar to a sociedade em nome coletivo, except that, as all sociedades civis, they are subject to different bankruptcy proceedings. All sociedades civis are pessoas jurdicas, although some of them are subject to

special income tax rules similar to the pass-through rules applicable to a partnership in the US. Associaes Non-profit organizations, such as charities, neighborhood clubs, professional associations and escolas de samba (carnival parading associationsnot dancing schools) must also be organized under civil code rules. They are not business entities and properly referred to as associaes (associations). However, as often as not they go by the name of sociedade civil sem fins lucrativos (non-profit organizations formed under Civil Code provisions), which may cause a little confusion.. They are also subject to insolvncia civil procedures. All non-profit organizations are corporate bodies. Sociedade Civil as the citizenry Finally Sociedade civil is also used, in a non-technical sense, in the meaning of the citizenry. Not really a matter of corporate law, but this is an article for translators and we should watch our step.

Pidgin Here and there, this article also discusses some examples of what I call Brazilian pidgin. Expatriate businesspersons (many of whom do not speak English well) often develop a form of pidginized English to communicate among themselves and with the natives. Often, the knowledge and use of pidgin is extended to a companys head office abroad. In pidgin, bylaws, or even social contract, is often used for contrato social and it works fine, because everybody knows what everybody else is talking about. Newcomers are soon told that although local companies usually lack bylaws, the partnership agreement (articles of organization) is locally referred to as bylaws, and that is that. Unfortunately, pidgin often finds its way into documents prepared for the use of the non-cognoscenti. This may create a problem, as when Brazilian lawyers start discussing bylaws and their American counterparts believe they are discussingwell bylawsif I make myself clear. Once, I heard an exposition about the social contract in a business meeting. The solid burgher of Birmingham (UK) on the opposite side of the table could hardly hide his amusement. Fortunately the point was cleared up before much damage could be done. Later on, I was surprised to find the same social contract used in a printed publication of a well-known law firm that caters to the international trade. Unfortunately, once the client community accepts a given translation as what is used, it is very difficult to use something else, no matter how good it may be. Clients want to feel secure with translations and rocking their translatorial boats does not add to the sensation of security. Support for the status quo is often found in reference to documents published by others (Look, this booklet published by this important law firm says social contract. Are you sure Americans will understand this partnership agreement or articles of organization of yours?). The fact that social contract does exist in English, although it is used in an altogether different sense, may serve as an additional argument for correct usage. Finally, an incorrect translation may be preferred because the correct one seems too vulgar or colloquial to Brazilian ears. Once, my first-half earnings was refused because it was too slangy and triumphantly replaced with profits for the first semester, thought to be more in keeping with the solemnity of an annual report. The only way to de-pidginize translations is to base our terminological research on original documents, not on other translations or bilingual dictionaries. But convincing clients who already know what is used may be a far more difficult task.

Disclaimer Do I need to insert a disclaimer here? Perhaps I do. It wont hurt, anyway. I am neither lawyer nor accountant. So this is neither legal nor accounting advice. The information contained here intends to be of use to translators trying to sort out texts written in Brazilian Portuguese (or to non-translators trying to understand translated documents), not to investors who wish to start a business in Brazil. If you are in business and wish to set up a business in Brazil, you should seek the help of lawyers and accountantsand, of course, of a professional translator.

Envoy All the translations suggested between brackets are merely the best approximation I could find. None of them is nearly as good as carburetor for carburador. But I have already said that. One of my guides through this expedition into the jungle of corporate law was Harry G. Henn, Handbook of the Law of Corporations and other Business Enterprises (Saint Paul: West, 1970). After reading this article, how would you translate that title into Brazilian Portuguese? Professor Henn refers to and other Business Enterprises, because some types of enterprise dealt with in his book are not corporations. In Brazil, all of them would be. So, Direito Societrio alone would do. However a book on Direito Societrio would go a bit farther than Professor Henns book, since it would have to cover all sorts of not-for-profit organizations, which the book fails to deal with. Perhaps, Manual de Direito das Sociedades Comerciais would be a better translation. Six words where English needs ten. Who said Portuguese texts have to be longer than their English counterparts, by the way?

here is this great little law, Lei Complementar 95, of February 26, 1998, about how a proper Brazilian law should be drafted. Required reading for every professional interested in legal translation, I would say. This and all other Brazilian laws can be found in www.planalto.gov.br, which is an official federal government site and I strongly recommend that you bookmark it. Now this law says that the basic unit of any law shall be the artigo which may be divided into pargrafos or incisos, and that the pargrafos themselves may be divided into incisos, the latter into alneas and the latter in turn into itens (notice the spelling with "n" for the plural form). Now, this is not the way laws are articled elsewhere. In addition, Anglo-American a Brazilian artigo may have a single pargrafo whereas elsewhere there can be no subdivision one without a subdivision law does not two. An artigo corresponds approximately to a section in an recognize the American law. Unfortunately the section sign ("") is called in difference between Portuguese sinal de pargrafo and accordingly it indicates a pargrafo in a law. What is called a "paragraph" in English, viz. commercial and "," is not normally used in Portuguese and, when used at all, is civil [companies]. called pargrafo americano or p invertido, meaning American paragraph or inverted P, respectively. The above is a bit confusing and makes life very hard for the common variety of translator, meaning you and I, and there is a lot of talk going on concerning whether we should call an artigo of a law an article or a section (an artigo in a newspaper is a story and an artigo in grammar is an articlebut that falls beyond the scope of the present article) and there is also a lot of talk about what to do with pargrafo nico and with caput which is an artigo, net of

all of its pargrafos and stuff. In other words, when we say no caput do artigo 120, we mean in the initial paragraph, not in the pargrafos, and when we say artigo 120, we mean the whole article 120 enchilada. I hope you are still with me, because we have more important and complicated issues to deal with today and I will end this overlong introduction by saying that, things being what they are, I will call an artigo an article and a pargrafo a paragraph and use the "" to indicate a pargrafo and also use sole paragraph for our pargrafo nico. I hope you agree. Oh, I almost forgot to say that caput will be translated as main body. Let's get down to business. The New Civil Code Brazil has a new Civil Code, Law 10.406 (notice that Brazil and practically all the rest of the world uses periods as thousands separators, a practice that is kept in this article for reasons both unexplained and unexplainable). Cdigo Civil is usually abbreviated as CC, although CC in Brazilian Portuguese also means B.O., which is very unfortunate. The new CC steals much of the thunder from the old Cdigo Comercial (CCo). The CCo still exists, as a sort of rump law and will probably die a slow death as other laws take care of the rest thereof. Although I very much enjoyed reading the old CCo, I do not regret its death, since the existence of the two codes created a lot of confusion that was not easy to deal with in translation. The main problem was that the Commercial Code dealt with what you would probably call the law of business organizations and said certain organizations were comerciais. The CCo was not concerned with noncommercial organizations, of course; noncommercial organizations were dealt with elsewhere, meaning the Civil Code (the old one, of course). As a consequence, they were usually referred to as sociedades civis, usually translated as companies organized under the provisions of the civil code, noncommercial companies, service companies, nontrading companies or some other equally awkward and/or imprecise expression. Anglo-American law does not recognize the difference between commercial and civil and it was not always easy to explain to an American lawyer that you cannot file for the bankruptcy of a firm of financial consultants because it is a sociedade civil, not a sociedade comercial. That, of course, was the task of the Brazilian lawyer, not of the translator, which is a very good thing indeed. On the other hand, it was often our unpleasant task to convince Brazilian lawyers that they would have to amend their legal opinions, otherwise the American reader wouldn't be able to make head or tail of it. Demise of a Distinction, Birth of a Murkier One The new CC contains the basics of business organization law and does not talk about comerciantes anymore. The distinction between comerciante and no comerciante is absolutely dead. It won't be missed, at least by translators.

Unfortunately, it has introduced a different category, that of empresrio, allegedly defined in Article 966 and its sole paragraph. The definition used in the main body of the article seems to be clear enough. It approximately says that if you conduct a business for profit and the business is engaged in production or distribution, then you are an empresrio, which seems to be fair enough. Then, the sole paragraph says that those who exercise an intellectual, scientific, literary or artistic activity are not empresrios, even if they rely on the help of others in their endeavors, unless the exercise of the profession is an element of empresa. That unless is murder and means that you are an empresrio unless you ain't and you ain't one unless you are. If you do not believe me, just read this: "Art. 966. Considera-se empresrio quem exerce profissionalmente atividade econmica organizada para a produo ou a circulao de bens ou de servios. "Pargrafo nico. No se considera empresrio quem exerce profisso intelectual, de natureza cientfica, literria ou artstica, ainda com o concurso de auxiliares ou colaboradores, salvo se o exerccio da profisso constituir elemento de empresa." A lawyer said that this is very simple. Publishing is an empresa. Tax consulting is not. But a tax consultant who publishes a magazine is an empresrio, even if it is a magazine about taxation. Of course, if the magazine is published as an integral part of the activities of a tax consulting firm, it would not be an atividade empresria, although it could be argued that it was if subscriptions were sold separately from the provision of tax consulting services. I suspected it very much depended on what was convenient to one of his clients at the moment, but I thought asking this type of question would be a bit rude. Basically, however the new sociedade simples correspond to the old sociedade civil and sociedade empresarial is the heir to the late sociedade comercial. What do you Call an Empresrio in English? So far, I have not found a translation for atividade empresarial that pleases me. Some local lawyers are using entrepreneurial activity, but these are the same guys who gave you quotaholder and insist that it is perfectly good, clear, idiomatic, honest-to-God English. Perhaps business activity would be a better idea, since trading has already been preempted for different purposes. Perhaps business is a good solution because its meaning is nearly as vague and misleading as the meaning of atividade empresarial in the CC. Unfortunately this would deprive us of the very handy law of business organizations for the Portuguese direito societrio. We could say corporate law, of course, but that would probably be seen by most foreigners as the law applicable to sociedades annimas only. No End of Trouble

To add to the problem, a sociedade empresria is opposed to a sociedade simples (Art. 982). This is not as simple as it seems to be: sociedade in Portuguese, is a general term that includes partnerships, limited liability companies and share corporations, so that simple partnership (remember that direito societrio applies equally to partnerships, LLCs and corporations) simply won't do and perhaps simple company will, but probably the best answer is nonbusiness company although this is not very satisfactory either. To make things worse, sociedade simples, should not be confused with sociedade inscrita no SIMPLES. SIMPLES, in this sense, should be always spelled in full caps because it is an acronym for Sistema Integrado de Pagamento de Impostos e Contribuies das Microempesas e Empresas de Pequeno Porte, which could be translated as Integrated Tax and Contribution System for Very Small and Small Companies and explained as a simplified tax accounting and payment system for the smaller guys. The sociedade simples is roughly the same as the sociedade civil of yore and must be registered in the Registro Civil das Pessoas Jurdicas (probably Civil Registry Office for Legal Entities), whereas the sociedade empresarial roughly corresponds to the older sociedade commercial and must be registered with the Junta Comercial (Registry of Commerce), an entity that is part of the Departamento Nacional do Registro do Comrcio. I suspect that in due time the Registry of Commerce will rechristened as the Registro de Entidades Empresariais (Business Entity Registry). As a general rule, both types of sociedade must be registered. Sociedades Personificadas and No Personificadas But we are putting the cart ahead of the oxen. We should first deal with sociedades personificadas and no personificadas. As a rule, Brazilian companies have always been considered pessoas jurdicas, that is, legal entities. A sociedade personificada is a company that is a legal entity. A sociedade no personificada is a company that is not a legal entity. The two types of sociedade no personificada There are two cases of sociedade no personificada. The first is the sociedade em comum which could be termed an unregistered partnership, or de-facto partnership. Since Brazilian entities organized for profit are legal entities, they must be registered as such. I know that in many countries registration is not required of general partnerships, but the beauty of legal translation (as compared to medical translation, for instance) is that no concept has a decent correspondent in the other language. Ever. The sociedade em comum is either a partnership in the organization stage or a partnership that was not registered on purpose and is deemed to be a partnership by a court of law. This roughly corresponds to the older sociedade de fato or sociedade irregular. The other kind of sociedade no personificada is the sociedade em conta de participao (SCP), which is a secret partnership (article 991). Believe it or not, secret partnerships are regulated by law in Brazil. A sociedade em conta de participao has at least one scio ostensivo (ostensive partner) and one scio participante (secret partner). Because it is secret, it cannot be registered.

Sociedades Personificadas There are four types of sociedade personificada: The sociedade em nome coletivo (art. 1.039), roughly corresponding to a general partnership and is already defined in the older Commercial Code. It must be registered, of course. The sociedade em comandita simples (art. 1.045) is like a limited partnership and is also defined in the older Commercial Code and must be registered. The sociedade limitada (art. 1.052) corresponds to a Limited Liability Company (LLC) and was defined in a Decree dated 1919. At that time, it was called a sociedade por cotas de responsabilidade limitada and has always been the second most popular type of business in Brazil. I own one-half of oneand Vera, my wife, owns the other half. But it is not only for the small guys: there are very large enterprises organized as limitadas. Finally, there is the sociedade annima (art. 1.088), which is further governed by law 6404 as amended. In theory, there are two types of socidade annima: the sociedade por aes (business corporation) and the sociedade em comandita por aes (limited partnership authorized to issue shares--not to be confused with the sociedade em comandita simples, which is a limited partnership). However, the comandita por aes was already falling in disuse in 1976 when the current Lei das S.A. was enacted and must be very rare today. So that, in practice, sociedade annima is a synonym for sociedade por aes. A sociedade por aes may be de capital aberto (public) or de capital fechado (close). What Happened to the Capital e Indstria? The sociedade de capital e indstria is not mentioned in the new Civil Code. However, a company of that type can be organized as a limited partnership. How Common is it? In 2002, the Departamento Nacional do Registro do Comrcio, registered 214,663 sole proprietorships, 227,549 limitadas, 1,012 sociedades annimas, 1,556 cooperativas (cooperatives) and only 371 "other types." So that general and limited partnerships, which are very important elsewhere, are almost non-existent in Brazil. You can check the stats by clicking here. General partnerships are the only form of business organization available to licensed professionals, such as lawyers and accountants, but those organizations are civil/simples and thus not reflected in Registry of Commerce statistics. I have never run into a Brazilian limited partnership or sociedade de capital e indstria: There must be very few of them. There are many sociedades em conta de participao, but those cannot be registered, so they are not reflected in the statistics above.

Envoi If you are interested in Brazilian business law to the extent of reading this article until here, you might be interested in reading the other article I wrote for the Translation Journal on the same subject, before the new Civil Code was enacted, by clicking here. Much of it remains valid and, of course, you may run into something written using the old system. Maximilianus Cludio Amrico Fhrer, whose works I have often recommended, has a new "Resumo de Direito Comercial (Empresarial)" that reflects the new rules. It is published by Malheiros Editores. I am very sorry I cannot offer good solutions to many of the terminological problems presented by corporate law. I am afraid there aren't any. I still hold that translating a legal text is like completing a jigsaw puzzle with pieces taken from a different one: nothing ever fits correctly.