A “micro company” (“micro empresa”, “ME”).
This company type is chosen by many professionals like independent consultants or university lectors but also small businesses like carpenters or plumbers. Consultants or speakers choose it because their clients often need to issue a fiscal document for the services paid, which obliges the service provider to have a company with a tax number (CNPJ). Compared to the Ltda and SA, the ME has certain benefits such as a simpler tax procedures, lower taxes and even lower social security contributions in some cases. As such, it may be a very interesting option you should consider even if you have ambitious business plans and feel that a “micro company” is below your rank. I know some entrepreneurs who had started with a Ltd. and then discovered the benefits of the ME.
But the ME also has many restrictions with regard to which kind of business activity can be done through it, and how much sales can the combined holdings of MEs of one person can have without loosing certain benefits. As a consequence, many small business owners in Brazil like pharmacies put new stores in the name of trusted family members, which offers also other benefits. That’s important to know if someone wants to research how many pharmacies a given owner has. This is where a good accountant is so helpful: he will know whether your business can be done through a ME, what kind of benefits you would have, if you may have to have several MEs in order not to loose those benefits, or if you are better served with a Ltda or SA.