Understand how it worked and why it was extinguished

For a few years, the Eireli It was one of the possible corporate formats for those who wanted to start a business without partners.

However, over time, the model was not very accessible, especially for the small entrepreneur. This caused, in August 2021, the Eireli format was extinguished and replaced by SLU – UNIPESSOAL LIMITED COMPANY.

Next, we will explain how Eireli worked, why it was extinguished and what are the differences between some of the main societal types that exist in Brazil. Continue reading and learn more about the topic.

What was Eireli and how did it work?

EIRELI – individual company of limited liability – was a legal format that emerged in 2011 designed for people who wanted to start a company alone.

Until then, those who chose to constitute a company without partners necessarily involve their personal assets in the business. In MEI or IS formats (we will see both in detail later), there is no separation between the partner’s goods and those of the legal entity. In other words, if the company takes on debts or undergoing any lawsuit and cannot pay, the partner’s assets are responsible for default.

This was the innovation that Eireli brought: the separation between personal and company heritage. However, the model did not basically be sustained by its main requirement, as we will see below.

Why does Eireli end?

In order to open an EIRELI, it was necessary to integrate the minimum capital of 100 wages in force in the year.

In today’s values, considering the current, this represents R $ 151,800.00. This began to generate complaints, especially from small entrepreneurs who didn’t have all this money to formalize a company. Gradually, the demand for Eireli was falling, because people ended up looking for a partner basically to shield their assets and to escape the demand for such a high initial value.

SLU: The model that replaced Eireli

With Eireli practically in disuse, it came back to create a corporate type that would meet those who had no partners. It was necessary something more accessible and at the same time maintaining the individual equity legally separated from the company’s assets.

It was in this context that the Unipessoal Limited Society – SLU – that is nothing more than a variation of the limited company (LTDA). It does not require minimum value of corporate capital, and limits its owner’s responsibility to the value of the social contract.

To open a SLU, you must be over 18 or be emancipated. Another advantage of this type of company is the largest scope of activities allowed compared to MEI and IS – we will see further the restrictions of these two categories.

No action was needed by the people who had this type of company.

When Law 14.195/2021 entered into force, EIRELI was automatically transformed into SLU. At the time, the National Department of Business Registration and Integration (DREI) had published guidelines on the procedures to be adopted by all commercial joints in Brazil.

From the transformation, the corporate name of the company that was EIRELI started to have LTDA at the end.

What is the difference between EIRELI, MEI, EI, LTDA, ME and EPP?

The confusion between the amount of acronyms in corporate legal formats is quite common.

To facilitate understanding, we can establish Three types of classification For these acronyms: legal nature (or corporate type), size (or billing) e tax regime.

When we talk about EIRELI, MEI, EI AND LTDAwe are referring to legal nature of the company. The classification in ME e EPP Take into account the annual revenue of the business. Finally, the tax regime will say what the company adopts to investigate its taxes – Simple national or by the systems of

So far, we understand what Eireli was and how it worked. Now let’s look at what they are and what are the characteristics of the other acronyms, especially regarding the corporate type and size. Due to the extent and complexity of the theme, we will not deepen the tax regime in this guide. Follow.

MEI (Individual Microentrepreneur)

O – is one of the simplest and most affordable categories to start a company.

The objective of creating this modality was to take from informality millions of Brazilians who work on their own, so that these people could have access to social and social security benefits, such as retirement, unemployment insurance, among others.

One of the requirements for being MEI is the revenue limit, currently at $ 81,000 per year, or $ 6,750,000 per month for companies open less than one year. In addition, it is also necessary to observe the following criteria:

• MEI cannot have a partner – neither in the business that you want to formalize, nor in another company.
• Nor can it be an active federal civil servant (for state and municipal servants, there are specific local laws).
• You can only have one employee, and he must receive at most one minimum wage or the category floor (when applicable).
• The company cannot have any branch.

The MEI can cover several professions, and they are all in a list on the entrepreneur’s portal. The activities regulated by class entities, such as doctors, lawyers, psychologists, dentists, architects, and others are left out.

Among the advantages of being MEI are the ease of opening the company, the reduced tax burden (Simples Nacional) and the simplicity of accounting for the tax authorities, as this business format does not require its holder to have an accountant.

EI (Individual Company)

Next to MEI and SLU, A – is one of three legal formats for those who want to start a business alone.

Like MEI, the individual company has no separation between the partner’s assets and those of the legal entity. Other characteristics of IS are as follows:

• The corporate name must be the name of the holder (complete or abbreviated).
• It can cover companies that earn up to R $ 4.8 million per year.
• It may have any type of tax regime (national simple, real profit or presumed profit), depending on the billing range and activity performed.
• Like MEI, IS cannot be used for regulated professions.
• Except for the death of the holder or if there is judicial authorization, it is not possible to transfer an IS to another holder.

Unlike MEI, there is no limit to hiring employees at IS. In order to constitute this model, you must be over 18 years old (or be emancipated), do not have a corporate interest in another company and do not perform regulated activities or that appear in the respective list of restrictions.

LTDA (Limited Society)

Originally, so that one could form a limited company it was necessary the minimum number of two partners. However, this changed with the creation of SLU, which began to replace Eireli.

As we have seen, SLU is a variation of LTDA, that is, the only difference between both is the fact that LTDA has at least two partners. Regarding everything else (property and legal separation, mandatory accounting and other aspects), both work the same way.

ME (Microenterprise)

It is classified as microenterprise (ME) the business that has annual gross revenues up to R $ 360 thousand.

Here, all the legal formats we have seen before, and any of the tax regimes can also be adopted, respecting the limitations of each system. Usually, the most used for ME is Simples Nacional, but for the best choice, the ideal is to have a tax planning that considers the peculiarities of the business.

EPP (small business)

On the size scale, the small company (EPP) is the one that comes immediately after ME. In this classification, are companies that earn from R $ 360 thousand to R $ 4.8 million per year.

Just as in the microenterprise, the EPP covers all legal natures and tax regimes, observing the legal exceptions.

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