The Individual Limited Liability Companies, also known as “EIRELI”, about to complete the second year thereof, has not yet reached the intended and expected amounts.

According to data from Boards of Trade, from January through October 2013, only 1,745 EIRELIs were incorporated in the State of Rio Grande do Sul, while 15,096 Limited Liability Companies were incorporated in the same period. In São Paulo, from Januar y 2012 through October 2013, 35,389 EIRELIs were incorporated, representing a bit over 4% of the companies incorporated in such State.

Such low indicators are attributable to the limit established by the Brazilian Trading Registration Department – DNRC to EIRELI’s partners.

Contrary to the provisions of the Brazilian Civil Code, which was restricted to establish that an EIRELI can be incorporated by a single “person”, legal entity or individual, DNR C, through its Normative Instruction No. 117, prohibited the possibility of a legal entity to own an EIRELI.

The Judiciary Branch, which is opposed to DNRC, has been providing a position with the legal argument that, according to the Brazilian Law, there is no distinction between individuals and legal entities. For that reason, Normative Instruction No. 117 is in violation with the legality principle by instituting the distinction and limitation.

In face of the foregoing, it is essential that DNRC re-evaluates its position or that measures are adopted for such, under penalty of another effective mechanism capable of bringing investment to Brazil becoming helpless.