The most suitable business model will depend on the needs and potential financial provisions of the venture. Therefore, it is advisable to start with a strategic planning process to determine the projected revenue. With this data mapped out, it becomes possible to select the corporate structure that best aligns with your business situation. The main difference between ME (Micro Entrepreneur) and EPP (Small Business) is the revenue: For ME, the gross annual revenue must be less than or equal to R$360,000 Brazilian reais. On the other hand, for EPP (Small Business), the gross annual revenue is up to R$4.8 million. One of the greatest benefits of both ME and EPP is the tax classification: If the revenue does not exceed R$4.8 million annually, it’s possible to opt for the simplified tax regime. The simplified tax regime, known as Simples Nacional, is the most commonly used tax system for companies in Brazil due to its ease of tax collection and compliance with fiscal obligations. Under this regime, all taxes are unified in a single form (DAS), simplifying the fiscal routine for small business owners. To establish a ME or EPP, it is mandatory to draft the articles of incorporation, which will be registered with the Commercial Registry. The articles of incorporation are the constitutive document of the company and should be designed according to the interests and goals of the shareholders. It outlines rights and obligations, legal and optional rules, procedures for shareholder withdrawal and expulsion, among other points. Therefore, it’s important to hire a lawyer to ensure that the articles of incorporation are tailored to the needs of your business. Planning to start your own business and have questions? Feel free to send us a message here
