Brazilian or foreign legal entities are already expressly authorized to own Individual Limited Liability Companies – Eirelis. On May 2, Normative Instruction No. 38/2017 of the Department of Business Registration and Integration (DREI) came into force, which, among other changes, amended the wording of item 1.2 and letter "c" of item 1.2.5 of the Individual Company Registration Manual ("Capacity to own an Eireli") to ensure this right.
The possibility of legal entities owning Eirelis has been controversial since the enactment of Federal Law No. 12,441/2011, which amended Article 980-A of the Civil Code to allow the organization of an Eireli by a single person, but without specifically mentioning whether it could be an individual or a legal entity.
Responsible at the time for guiding commercial boards of trade with respect to hierarchically superior rules, the National Trade Registration Department (DNRC) implicitly forbade the organization of an Eireli by a legal entity, in an apparent overstepping of its jurisdiction, upon issuing the Normative Instruction No. 117/2011.
Pursuant to this instruction, requests to organize Eirelis by legal entities came to be rejected by the commercial boards of trade. This understanding has been the subject of much debate before the Judiciary, which has shown a propensity to accept the DNRC's claim of excess in the restrictive interpretation of the legal text and to allow the organization of Eirelis by legal entities.
In order to settle the understanding on the subject, DREI, DNRC’s substitute, issued Normative Instruction No. 38, on March 2, 2017, expressly providing for the possibility that an Eireli be owned by a foreign or Brazilian legal entity.
Nevertheless, it is necessary to pay attention to the main requirements for the organization of an Eireli, according to the Civil Code: (i) the capital cannot be less than 100 (one hundred) times the highest minimum wage in force in the country; (ii) the company name should contain the expression "EIRELI"; and (iii) natural persons organizing an Eireli may only appear in one (1) company of this type. In addition, the rules provided for in the Civil Code for limited liability companies (Article 980-A, paragraphs 1 to 6) apply to Eirelis.