What is Limited company – Ltd. (Definition)

Public limited companies are constituted  by limiting the responsibilities  of each entrepreneur and the participation of each partner previously stipulated by a social contract.

They are also known as a limited liability company and companies that have this characterization are known by the abbreviation “Ltda”.

Responsibility of the partners of the limited liability company.

The partners in a limited company are directly responsible for the capital stock committed to the business. Based on the statutes, the amounts payable by each investor are called.

The participation of each partner, as well as their responsibilities, are divided into shares proportional to the initial investment made by each investor. For example, if a partner invests R $ 80 thousand, in a company that now has a share capital of R $ 160 thousand, that partner participates in 50% of the company.

With limited ownership, partners are not affected by their personal assets, not even company debts, unlike unlimited liability which creates a full commitment to their owners.

Another characteristic of this type of company is the presence of each entrepreneur in the management of the business, different from the shareholders of the company, that is, only capital investors. The company can have shareholder participation only if previously agreed in the bylaws.

It is estimated that in Brazil most companies are limited partnerships.

Individual Limited Liability Entrepreneur – EIRELI

Limited companies are formed in companies with two or more partners, however, it is possible to form a limited liability business with a single owner, better known as EIRELI.

Prior to the creation of this model, many partnerships were made with 99% shares held by a single partner and this had a small remaining 1% share held by someone else to form the limited partnership.

EIRELI began to allow the participation of a single partner, and also limited liability, with the exception that this entrepreneur must be an individual.

Another requirement for the formation of EIRELI is that, on the date of incorporation, the company must be subscribed to a share capital with at least 100 minimum wages.

The great advantage of creating this model is that companies that lose their partners can continue to exist with a single owner.