MEI, ME, EPP and LTDA: what are the different types of business start-ups

here are different types of starting a business. Do you know everyone?

This variety gives more flexibility to the entrepreneur, who can choose the best option, the most advantageous for his business. These measures help promote the growth of the country’s economy, giving small and medium entrepreneurs an incredible opportunity to formalize their business.

Here are the types of business start-ups and which one may be the most advantageous for you!

MEI (individual microentrepreneur)

This is the ideal solution for self-employed, as a self-employed person. It is an individual company, whose purpose is to formalize professionals who work individually in commerce.

Complementary Law No. 123/2006 is regulated by the MEI. To enroll in this category, the professional needs to earn up to R $ 60 thousand annually. The MEI needs to adjust to the Simples Nacional regime.

MEI cannot participate in another company, either as a partner or as a holder. However, you can even have an employee, who must receive a minimum wage or the equivalent of the floor of your category.

One of the advantages is that, to become MEI, it is possible to register with the National Register of Legal Entities (CNPJ) and have your company open through the internet .

He also enjoys some tax advantages, making monthly and fixed payments, with low value, and being able to access exclusive social security benefits.

ME (micro enterprise)

For the opening of a ME-type company, it must present annual sales of up to R $ 360 thousand. Formalization takes place at the Board of Trade.

Unlike the MEI (which, mandatorily, must adopt the Simples Nacional tax regime), the ME entrepreneur can choose any of the regimes: Simples Nacional, Real Profit and Presumed Profit.

In order to qualify as a micro-company, the only condition imposed is annual sales within the limits described above.

ME has, in most cases, fewer employees than a large company. However, the number of employees has nothing to do with the option of starting a company. Likewise, social capital is not taken into account.

EPP (small business)

In order to be registered as a small business, the organization follows the same principle as the micro business, that is, it does not matter the number of employees, nor the capital stock – only the billing, which must be, at most, R $ 3, 6 million a year.

The legislation that regulates EPP is the same that regulates ME: Complementary Law 139/2011.

ME and EPP, as with MEI, enjoy a different treatment under the legislation and tax authorities. For example, they do not need to hire Young Apprentice, which is mandatory for other companies. In public tenders, they also enjoy some perks.

LTDA (Limited Company)

Another form of starting a company is LTDA. This acronym is old and has already become popular among entrepreneurs. You may have seen this abbreviation on some vehicles and products (mainly on beer racks).

To be a limited liability company, there is no limit on share capital. It happens when two or more entrepreneurs come together to create a company. An investment is required in the State Commercial Board.

The company LTDA must carry out economic activity for the purpose of producing / selling goods or services. The articles of association contain important information, such as how copies are distributed and the names of members.

An important characteristic of LTDA is that the company’s accounts are completely separate from the accounts of each partner. Each of these partners has limited responsibility for corporate accounts. This responsibility is defined according to the participation quotas of each partner, that is, according to the share capital each holds.

Thus, each partner shares profits proportional to its share capital and also assumes limited liability for the debts that the company incurs – after all, not only profits from a company, debts are also part of the business.

Annual turnover X Company type

In fact, the opening of a company considers the tax framework (which follows the rule of annual billing) and the corporate type of the company. In the first case, there are three classifications:

  • MEI (individual microentrepreneur);
  • ME (micro-enterprise);
  • EPP (small business).

Regarding the corporate type, we have:

  • LTDA (limited liability company);
  • EI (individual company);
  • EIRELI (individual limited liability company);
  • SA (Sociedade Anónima);
  • Non-profit.

Thus, a company can combine a tax framework with a corporate type, but it can never combine two tax frameworks or two corporate types.

Hard to understand? No, it is very easy.

A company cannot be both ME and EPP. However, it can be simultaneously an EPP and an LTDA.

On the other hand, an MEI can only be an EI (individual entrepreneur), since there are no partners.

Other corporate types

We only talk about the corporate type LTDA, let’s see the others.

The EI (company, or entrepreneur, individual) is formed by only one individual, who is responsible for the entire company. That person’s assets are no different from your company’s assets.

EIRELI (individual limited liability company) also only has one holder who is responsible for the company’s share capital. He is not responsible for the company’s debts with his personal assets (they are legally separated). The opening of an EIRELI company requires a share capital that is at least 100 times higher than the highest minimum wage in force in the country.

The SA (corporation) has its share capital divided into shares. Each partner (or shareholder) has responsibility and profits proportional to the value of its shares. Profits are called dividends.

The non-profit company allocates its revenue to maintain its own activities, that is, it does not aim for profit.

Company opening table

Therefore, we have the following scenario, relating the tax framework to the corporate type:

  • MEI can only be EI (one holder; Simples Nacional regime);
  • ME can be EI, EIRELI or SA (one or more holders; Simple National regime, Real Profit or Presumed Profit);
  • EPP can be EI, EIRELI or SA (one or more holders; Simple National regime, Real Profit or Presumed Profit);
  • Normal company (with revenues above R $ 3.6 million per year) can be EI, EIRELI or SA (one or more holders; Real Profit or Presumed Profit).

Leave a Comment