EIRELI is an acronym that means Individual Limited Liability Company. It is a type of company that is formed by a only partner, that is, by the entrepreneur himself who wants to open a business and be the sole owner.
EIRELI exists since 2011, its operation is regulated by Law nº 12.441/11.
The name of an EIRELI is different from other types of business. When choosing the name of a company of this type, the EIRELI name must must be included in the corporate name. chosen, so that it is clear that it is a company of this type.
Advantages and Disadvantages of EIRELI
For small and micro-entrepreneurs, EIRELI has more advantages than disadvantages, but it is necessary to analyze the business conditions to make the right decision.
See what the main ones can be benefits to open a company in the EIRELI category:
- EIRELI does not need the presence of other partners for the company to be opened,
- has no limit in the amount of annual billing,
- the personal equity of the entrepreneur and the company is accounted for separately, so there is no risk of compromising the equity personnel to pay the company's debts (except in case of fraud or any illegal activity in relation to the accounting of the company),
- it can be open in many fields of activity, both for the provision of services, as for commerce or industry activities,
- can be used by self-employed professionals, such as journalists, doctors and psychologists,
- EIRELI is allowed to use the Simples Nacional model for the tax burden, thus making tax collection easier.
They can be pointed out as disadvantages from EIRELI:
- the entrepreneur cannot have more than one EIRELI registered in his name, so if he wants to open another company, he will have to choose another type of business,
- the company's minimum capital is required to be the amount corresponding to at least 100 times the minimum wage effective at the time the company is registered. Any types of assets that can be monetarily valued can be used.
How to open an EIRELI?
The procedure for opening an EIRELI includes the same steps as for opening other types of businesses. Look:
- researching and choosing a business name available in the chosen market,
- make the company's incorporation document (Constitutive Act), which must be signed by a lawyer and registered with the Commercial Registry of the State where the company will operate,
- after the company is registered, the entrepreneur will receive the Company Registration Identification Number (NIRE),
- make a registration with the CNPJ (National Register of Legal Entities) at the Federal Revenue,
- register the company with the Municipal Finance Department,
- ask for the Business Permit at City Hall,
- register the company with Social Security,
- register with the State Treasury Department (for commercial or industrial activities) or with the Municipal Treasury Department (for service provision activities).
Learn more about the meaning of CNPJ.
What are the differences between EIRELI and MEI, EI and Ltda.?
Like EIRELI, the individual microentrepreneur (MEI) and the individual entrepreneur (EI) are types of individual companies. The limited liability company (Ltda.) is a company formed by at least two partners.
See now what are the main differences of an EIRELI in relation to MEI, EI and Ltda.
Individual microentrepreneur (MEI)
MEI is also a type of individual company without partners. It can be included in the Simples Nacional tax system and, unlike EIRELI, the MEI has a maximum annual billing limit of R$81 thousand.
Another difference between these two business types is that, contrary to what happens at EIRELI, the MEI entrepreneur cannot be part of other companies, neither as a partner nor as a holder.
Individual Entrepreneur (EI)
Individual entrepreneurs cannot have partners either. As with EIRELI, EI can also opt for Simples Nacional, as long as the company's activity is not labor supply.
In the case of the individual entrepreneur, the biggest difference is in relation to the company's assets and personal assets. EI is responsible for the debts of the company of unlimited form, that is, the entrepreneur's personal assets can be used to pay the company's debts.
In relation to billing, there are two limits, which depend on the tax regime adopted by the EI. If the maximum annual turnover is up to R$360 thousand, it must be registered as a microenterprise (ME). From this amount up to the limit of R$ 3.6 million, the registration must be for a small business (EPP).
See also the meaning of company.
Limited company (Ltda.)
The limited liability company, unlike EIRELI, must be formed by at least two partners, which have shares in the company, registered in the articles of association.
In the limited liability company, the equity responsibility between the partners is joint, that is, they are all responsible for the company's share capital and financial responsibility.
There are also differences regarding taxation. At Ltda., in addition to being able to opt for the Simples Nacional regime, it is also possible for the company to operate by Real Profit or Presumed Profit.
Learn more about Limited society.
Is it possible to transform other types of companies into EIRELI?
Both the individual entrepreneur and the limited liability company (Ltda.) can be transformed into an EIRELI.
to transform a individual entrepreneur in EIRELI it is necessary to go to the State Board of Trade, where the company was registered, and present two distinct acts:
- the Individual Entrepreneur Transformation Act,
- the Constitutive Act of EIRELI.
to transform the limited society (Ltda.) in EIRELI, the Act of Incorporation of EIRELI for transformation of a limited liability company must be presented at the Commercial Registry.
It is important to know that, even with the transformation of the company into EIRELI, the same data regarding the CNPJ number and registration with the State Treasury Department will be kept.
See also the meanings of Ltd. and Anonymous society.