Managing a Brazilian subsidiary: a practical legal checklist

Management powers and separate assets

The articles, appointment documents and powers of attorney should reflect who actually signs for the company. An internal headquarters approval limit does not, by itself, determine the effect of a signature towards third parties. The Civil Code addresses directors’ powers and liability and permits piercing the corporate veil where abuse involves misuse of purpose or commingling of assets. Each company’s cash, expenses and records should remain identifiable. Membership of the same group does not automatically establish liability.

Civil Code, Articles 50 and 1,015–1,016.

Annual approval of accounts

In a limitada, the annual decision on accounts takes place within four months after the financial year ends. A December year-end therefore calls for arranging approval by April. The form may vary: the Civil Code allows a written decision by all shareholders instead of a meeting. Accounts prepared by the accounting team are not the same as accounts formally approved by shareholders. Headquarters should allow time to examine the financial statements, resolve questions and document the corporate decision.

Civil Code, Articles 1,072(3) and 1,078.

Central Bank reporting

Periodic SCE-IED declarations are not identical for every subsidiary. Official guidance identifies quarterly reporting from BRL 300 million in total assets, annual reporting from BRL 100 million and five-year reporting from BRL 100,000, subject to their respective reference dates and conditions. An annual declaration is not required in a five-year reporting year. Specific transactions may also trigger information requirements. The responsible person needs the company’s asset value and transaction details; turnover is not a substitute for the asset criterion.

BCB Resolution 278/2022 and Central Bank guidance.

Employees and termination decisions

A workforce budget cannot be based solely on monthly salary or a universal percentage for employment costs. Annual leave, the thirteenth salary, FGTS, benefits and collective instruments need to be considered. When employment ends, the termination route, temporary employment protections and collective rules affect the procedure and amounts. Headquarters should involve local advisers before communicating a decision, rather than after announcing a departure date to the employee. A group policy cannot establish the Brazilian outcome on its own.

CLT, including Articles 391-A, 477 and 487; Ministry of Labour guidance.

Data sent to European headquarters

Sharing employee or customer data with headquarters requires identifying the purpose, legal basis, recipients and security arrangements. Since January 2026, ANPD has recognised the European Union as adequate: transfers covered by that decision may rely on adequacy, rather than assuming standard contractual clauses are always necessary. Other LGPD obligations remain. A supplier or recipient outside the decision’s scope requires a separate assessment, including any onward transfers. Group ownership is not, by itself, a legal basis for every use of personal data.

LGPD, Article 33; ANPD Resolutions 19/2024 and 32/2026.

Contracts, deadlines and reporting

The calendar should bring together contract renewal and termination dates, powers of attorney, licences, disputes and decisions reserved to shareholders. In a limitada, amending the articles and appointing directors are corporate matters distinct from ordinary trading. A short report to headquarters should identify the event, applicable deadline, consequence of inaction and person required to decide. Reporting frequency is a management choice: there is no single quarterly legal reporting deadline for every business.

Civil Code, Article 1,071; reporting arrangements are a management recommendation.

Internal decisions before appointing advisers

• Set decisions reserved to headquarters and approval limits in Brazilian reais.
• Assign ownership of corporate, employment and regulatory calendars.
• Map where personal data is processed and who receives it in Europe.
• Choose a contact for service of proceedings, inspections and urgent notices.