Thamara Belinatti and Heloisa Nogueira
We are currently familiar with three types of legal entities with a single partner: the famous—and now-defunct— EIRELI (Individual Limited Liability Company), the confusing *Empresário Individual* (Individual Entrepreneur), and the new SLU (Single-Member Limited Liability Company).
Confusion between them is common, and determining which is best for a business can be equally confusing without reliable information; however, do not worry—this article will clarify everything you need to know.
EIRELI was discontinued in 2021; under Law 14.195/21, all companies registered under this model were converted into single-member limited liability companies (SLUs). It limited the partner's liability to their capital contribution; however, establishing this type of entity required a minimum capital of 100 times the monthly minimum wage.
The SLU (Single-Member Limited Liability Company) emerged in 2019, established by the Economic Freedom Law (Law No. 13.874/2019). It appeared as an alternative for those who lacked the minimum capital of 100 times the minimum wage required to open a company but still wished to protect their personal assets; like the EIRELI, liability is limited to the capital contribution, yet there are no restrictions on its formation.
Finally, there is the *Empresário Individual* (Individual Entrepreneur); here, the assets of the partner and the "legal entity" are not legally distinct, as limited liability does not apply. In reality, a separate legal entity is not even recognized—despite the availability of tax benefits—and there are no restrictions on starting the business.
With the exception of rural producers, who are subject to specific regulations, the most common form of individual entrepreneurship in Brazil is the Micro-enterprise (ME). In this case, the company's registered name is the entrepreneur's own name followed by the acronym "ME," which serves to classify the company based on its revenue.
What few people realize is that, even as an individual entrepreneur, since 2019 you can establish a single-member limited liability company (SLU) classified as an ME. This creates a separation between the company's assets and the entrepreneur's personal assets—unlike the standard individual entrepreneur model, where the business risk is borne by the entrepreneur's personal wealth.
These are some of the characteristics of the business structures that allow for the formation of a company with a single partner. The choice between them depends on a detailed analysis by the business owner, their lawyers, and their accountants, taking into account factors such as revenue, capital, business risk, and the partner(s) involved.
