Structural differences between EIRELI and wholly owned subsidiary: from the economic function to the holders social interests

• Grant number: 14/23753-7
• Support Opportunities: Scholarships in Brazil - Scientific Initiation
• Start date: July 01, 2015
• End date: June 30, 2016
• Field of knowledge: Applied Social Sciences - Law - Private Law
• Principal Investigator: Gustavo Saad Diniz
• Grantee: Renata Guinato Benites
• Host Institution: Faculdade de Direito de Ribeirão Preto (FDRP). Universidade de São Paulo (USP). Ribeirão Preto , SP, Brazil

Abstract

Modern and innovative instrument Brazilian law, the EIRELI - Individual limited liability Company - has emerged as a suggested solution for entrepreneurs who want to have their liability limited to a specialized capital, dispensing the corporate plurality, which can lead to corporate conflicts and phenomena such as the "straw partners". Then, with the use of this model will be possible the separation between the patrimony of the EIRELI and the patrimony of the entrepreneur's physical person, the holder of the EIRELI. The law 12,441 of 2011 was the introducer of this innovation. Previously, already existed the institute of the wholly owned subsidiary that is a society, which the only shareholder is society with headquarters in Brazil, in accordance with the Brazilian legal system. Also this institute was born by overcoming the plurality, founded on the idea that the capital conferred allows the coating with legal personality, the administrative autonomy and the structuring of factual group. Just as it occurs in the Individual Limited Liability Company, it is spoken again in a corporation with only one holder. However, this similarity creates confusion between the figures, leading to erroneous reasoning that would set EIRELI as a sole proprietorship and not as a new type of legal person; or that it would not have a practical difference between the EIRELI and the wholly owned subsidiary. This research seeks to demonstrate the structural and functional points of the two institutes to undo these conceptual conflicts.