Volume 2, No. 3 
July 1998

Danilo Nogueira

Danilo Nogueira (danilo.tradutor@uol.com.br) specializes in accounting, management, taxation and corporate law. He lives in São Bernardo do Campo, an industrial city in Greater São Paulo, with his wife and son.
    A part-time translator since his teens, he took the plunge in 1970 when he landed a job with a large CPA firm. At that time, he thought assets equaled liabilities because balance sheets were cooked. He claims to have learned a few things about accounting over the last 28 years.
    His first job was collecting materials for an English-Portuguese dictionary of business terms to be published by his employers. He got bitten by the lexicography bug and has built a 14,000 database to which he is constantly adding new material. He intends to publish his database some day, together with a dictionary of insurance terms. Danilo does free-lance work for two of the big six CPA firms, as well as for local and international banks and organizations.
    In his late teens, he was denied a place in the public school system because he flunked his science subjects a little too often. Confronted with the idea of attending a private school, he decided to drop out, on the grounds that having to go to school was bad enough, but having to pay for it was a bit too much. But no anti-academic, he often speaks in colleges around the Greater São Paulo area.
    Several papers by him were published by CITRAT, the Center for Translation and Terminology Studies of São Paulo University and a few by the Bulletin of the Institute of Translation and Interpretation (UK).
    Outside translation, his main interest is music. One of his dreams is translating the works of Donald Francis Tovey, an English musician who was very active in Scotland during the first half of the Century.


Happy Birthday, TJ!
Index 1997-98
  Translator Profiles
It Needn’t All Be Boring...
by Derry Cook-Radmore
Dr. William I. Bertsche
by Gabe Bokor
  Translator Education
Considerations on Teaching Translation
by Denis Sánchez Calderaro
  Translation Theory
Translation As a Communication Process
by Frédéric Houbert
  Art & Entertainment
Translator, Adapter, Screenwriter
by Robert Paquin, Ph.D.
 Biomedical Translation
Immunology—a Brief Overview
by Lúcia M. Singer, Ph.D.
 Business Translations
The Language of Business Entities in Brazil
by Danilo Nogueira
  Science & Technology
A Translator’s Guide to Organic Chemical Nomenclature XII
by Chester E. Claff, Jr., Ph.D.
  Caught in the Web
Web Surfing for Fun and Profit
by Cathy Flick, Ph.D.
Translators’ On-Line Resources
by Gabe Bokor
Translators’ Events
Letters to the Editor
Call for Papers

Translation Journal

The Language of Business Entities in Brazil

by Danilo Nogueira

Simply stated, it is not the same thing. Take a car, for instance. Brazilian engineers and American engineers (or Chinese engineers, for that matter) will discuss cars using different languages, but they will be discussing a car—and a car is a car, a definite plus, at least as far as translation is concerned.
    I can translate carburador as carburetor and be reasonably sure I will not be misunderstood. In our globalized world, there is even a good chance that the Brazilian and American mechanics will use carburetors made by the same company using the same drawings and specs—provided they are talking about cars that still use carburetors, that is.
    The law, however, is something different. A sociedade por quotas de responsabilidade limitada is not a limited liability company in the same sense a carburador is a carburetor. One may say that this makes legal texts more difficult to translate than, say, scientific texts. Possibly, but that is beside the point. The problem is it makes translations of legal texts necessarily less precise than those of scientific texts.
    To make things worse, the English-speaking world is composed of many countries, with differing legal and tax systems. A Partnership is one thing in the U.S., something else in England and something else again in Scotland, not to think of all the other countries, minor and major, where English has official or quasi-official status. Finally, English is the new koine, the universal default language. Every professional seems to be able to grope his or her way through an English-language text. Evidently, foreigners will often construe a text written in English in agreement with their own cultural backgrounds. What a Slobovian accountant who picked up some English from an Irish teacher will make of a Brazilian legal text translated into American English I dare not guess.
    In other words, even if we could provide a precise translation into one of the several existing standards, we can never be sure that it will be understood as we meant it to be. Consequently—and regrettably—it is impossible write a nice little article saying Brazilian X corresponds to English Y. The best one can do is analyze Brazilian terms and suggest translations, pointing out a few of the more dangerous traps they hide. It is up to individual translators to deal with them in agreement with their own audiences—provided they know what that audience will be.
    Suggestions given here are based on the American legal system, with which I am a bit more familiar, and that presents an additional problem, for different states have slightly different ideas of what a corporation should be. But that, of course, is part of the fun. Fortunately, the matters dealt with here are regulated by federal law in Brazil. So, an S/A will be an S/A, no matter in which Brazilian state you are. That, of course, spoils part of the fun.

Direito Societário

Let us begin our safari with Direito societário. Direito societário is the branch of law that deals with sociedades. Sociedade, here does not mean society in the sociological sense, but “two or more individuals or entities joining means and efforts for the same purpose.” Sociedade is loosely used in the same manner as company is often used in English, to denote any type of business organization. In that case, it is shorthand for sociedade comercial. Brazilian Portuguese has companhia, but it applies strictly to a sociedade anônima—not to partnership-like organizations. And allow me to point out that company has many subtle shadings of meaning besides the loose “concern of some sort.”

Sociedades Comerciais (governed by the Commercial Code)

Brazilian law provides for six basic types of sociedades comerciais (merchant companies, trading companies, commercial companies—where “company” is used in its general sense). Those may be divided into three groups.
    The first group includes four partnership-like types, where at least one partner must have unlimited liability. This includes sociedade em nome coletivo, sociedade em comandita, sociedade de capital e indústria and sociedade em conta de participação. The four are dealt with in the original Commercial Code of 1850.
    The second group includes only the sociedade por quotas de responsabilidade limitada (Ltda, Limitada), added to the original types by Decree 3708/19 (the number after the slash indicates the year of issue or promulgation). Although it is not mentioned in the original Commercial Code, it's governed by it.
    The third group includes the two types of the sociedade anônima or sociedade por ações (S/A). The S/A was dealt with in five paragraphs in the original Commercial Code but has grown to a very complex type of business organization, governed by a separate law (6404/67).
    All sociedades comerciais are pessoas jurídicas (corporate bodies, legal entities, artificial persons) and subject to imposto de renda das pessoas jurídicas (corporate income tax) at the same rates and under the same conditions. This will often surprise persons from countries where you can set up a partnership which is not a legal entity or is seen as a veículo (conduit) for income and not as a taxable entity (entidade tributável).

Group One: Partnership-like forms of business organization
The simplest form of merchant company is the sociedade em nome coletivo (general partnership) where all partners have responsabilidade ilimitada (unlimited liability).
    In a sociedade em comandita simples (limited partnership, special partnership, partnership in commendam), at least one sócio comanditado (general partner) has unlimited liability and one or more sócios comanditários (limited partners, special partners, dormant partners) have responsabilidade limitada (limited liability). A sociedade em comandita por ações is a variant where ownership interests may be freely transferred, as in a joint stock company.
    Then we have the sociedade de capital e indústria, a form of secret partnership where a nameplate sócio capitalista (general partner) has unlimited liability and a sócio industrial (working secret partner) has no liability and invests nothing but work.
    The last type in this group is the sociedade em conta de participação (SCP), another form of secret partnership in which the sócio oculto (secret partner) is not a working partner, but usually an investor who prefers to remain unknown and assumes no liability for the partnership. The sócio ostensivo (nameplate partner, acting partner possibly also ostensible partner, a dangerous choice because it may also be construed as someone who is a partner only in name) is the only one to appear as such before the public and is the only one with any liability for the business. Because SCPs are governed by private agreements not registered anywhere, it is impossible to determine their number.
is sometimes used as a translation for joint venture. This, however, is wholly inappropriate, because the essence of a sociedade em conta de participação is the secret partner.

Group Two: Limitadas
Now we are getting serious. The types of business organization referred to above as “group one” are now very rare, virtually obsolete. Practically all businesses are now organized as limitadas or S/As. Most of them start as limitadas, even if only as a stepping stone to becoming an S/A later on.
    The Limitada is a transitional type between the first group and the S/A. Limitadas are similar to a limited liability company (LLC) of the type now becoming popular in the U.S. Limitadas offer limited liability, flexible management and distribution of income and losses. In theory, personal liability in a limitada is limited to the company’s capital stock. However, the articles of organization normally include a (fully legal) provision limiting liability to each member’s own share in the company. Unlike LLCs, limitadas are always taxed as corporations—the pass-through method does not apply to Brazilian sociedades comerciais.
    A limitada is formed by filing a contrato social signed by the sócios quotistas who hold quotas in the sociedade. If we treat the limitada as a form of partnership, we should say a limitada is formed by filing a partnership agreement signed by the partners, who own an interest in the partnership. If we equate it with an LLC, which, in my view, is a great deal more precise, we should translate that as a limitada is formed by filing the articles of organization signed by the members who own an interest in the company.
    However, Brazilian translatorial tradition does not follow that path. Most texts originating in Brazil would put that sentence as a limitada is formed by filing the bylaws (or: articles of association) signed by the partners-quotaholders who own quotas in the company.
    Articles of association
does not seem to be frequent in U.S. usage. In U.K. usage it is frequent, but means a document covering matters such as meetings, powers of the several directors, election of officers and so on—approximately what would be called bylaws in the U.S. The contrato social includes this information, but must also include information on name, address, object, partners and capital, among other things. This, in the U.K., is part of the memorandum of association, which approximately corresponds to American articles of incorporation. In fact, both apply to companies, or to what the Americans would call corporations—not to partnerships. Bylaws is common in the U.S. as a set of rules on the government of a corporation or association—but would hardly be accepted as a synonym for partnership agreement or articles of organization.
    Owners of a limitada are called quotistas, or, more precisely, sócios quotistas, because Brazilian law distinguishes between quotas and ações. A quota is a unit of interest in a limitada and cannot be freely transferred, neither can it be attached in bankruptcy proceedings. An ação is a share in an S/A and can (usually) be freely transferred or attached in bankruptcy proceedings.
    There, of course lies a difference. Thus, many translators insist on translating ação as share and quota as quota. This, it seems to me, is extending the sense of English quota a little too much. Calling a sócio quotista a partner-shareholder, however, is decidedly going too far. It may placate several of the demons tormenting the translator’s conscience, but is of very little help to the reader—unless the reader is Brazilian, of course.
    In my opinion, if you balk at the idea of translating quota as plain share, you might try something like share of interest or unit of interest, which preserves the idiomatic interest and does not use the unidiomatic quota..
    Curiously, the very idea of a quotista owning a large number of quotas is an innovation not contemplated in the original Decree. The decree states that each sócio-quotista would have a quota in the capital.... That, of course, can easily be translated as each member shall have an interest in the capital....
    The articles of organization for a limitada may be very complex, a monument to the skill of a group of international lawyers—or a couple pages of boilerplate put together by an unsophisticated storefront accountant to set up John Doe and his wife as owners of a fruit stall around the corner.

Group Three: Sociedades Anônimas
The sociedade anônima or sociedade por ações, or still, but rarely, companhia has been described as a joint stock corporation (as opposed to a sociedade em comandita por ações, said to correspond to a joint stock company). Probably a good description. I have sometimes seen Brazilian corporation—not that I like it—but the term is falling out of fashion.
    An S/A may be de capital fechado (closed) or de capital aberto (public). In both cases, capital social (capital stock) is divided into ações ordinárias (common shares) and ações preferenciais (preferred shares) held by acionistas (shareholders). If the text discusses S/As de capital aberto and de capital fechado, the nature of the organization will be made obvious and plain corporation will do as a translation.
are governed by an estatuto social (articles of incorporation). In many cases, there are acordos de acionistas (shareholder agreements) under which shareholders mutually grant or waive rights. Thus, shareholders may agree on certain restrictions on their right to freely dispose of their shares.
    S/As de capital fechado
may not offer securities to the public. This is the privilege of a S/As de capital aberto. To abrir o capital (go public) an S/A must file an application with Comissão de Valores Mobiliários, abbreviated CVM, a federal agency that is patterned after the US Securities and Exchange Commission and whose name should thus be translated as Brazilian Securities and Exchange Commission or something to the same effect. Curiously, CVM is often called Brazilian Securities Commission in English by people who think the “exchange” in the SEC stands for foreign exchange—which it does not.
    The Government holds a controlling interest in several S/As, known as sociedades de economia mista (government-controlled companies), the economia mista here meaning “part-governmental, part private, from the standpoint of economics.”

Joint ventures, consortiums, syndicates etc.
Neither the Commercial Code, nor later legislation contains special rules regarding joint ventures (joint ventures), or consórcios (syndicates). Consequently operations of those types are governed by agreements between the parties. A word of caution is required in the case of consórcio which often means a specific type of mutual association whose members pool resources to buy some item (from VCRs to heavy trucks) —one for each member—under conditions considered advantageous. Consórcios of this kind are managed by specialized firms and supervised by the Central Bank.
    In some cases, courts may decide that there is a sociedade irregular or de facto (partnership in practice, partnership in effect, de facto partnership) between two or more individuals who have failed to form one de direito (pursuant to law, de jure). In other cases, courts may decide the sociedade was formed for fraudulent purposes and desconsiderar a pessoa jurídica, literally, to ignore the legal entity, sometimes referred to as lifting the corporate veil in English.

Foreign Investment
Most foreign investors operate in Brazil through resident companies organized in one of the above forms. Any operation organized in Brazil, under one of those types is a sociedade brasileira (Brazilian company, better: resident company) no matter how much of its capital is owned by foreign investors. For a short period, there was a distinction between empresa brasileira de capital nacional (resident company controlled by domestic investors) and empresa brasileira de capital estrangeiro (resident company controlled by foreign investors). This distinction has been repealed.
    A dwindling number of foreign investors operate through filiais (branches). Because it is considered far easier to run a resident subsidiária (subsidiary), most companies have quietly opened a subsidiary and transferred assets and operations to the resident company.

Titles of management positions vary wildly from company to company. In addition, there may be some difference between legal requirements and actual managerial practice.
are required to have a sócio-gerente (managing partner). In a large outfit, the managing partner may be a foreign corporation and power may be in the hands of a resident gerente delegado (representative, delegate, deputy). Often, the managing partner or delegate is known to the public as diretor, which may vaguely be translated as managing director. A gerente (manager) is often a professional manager, whereas the sócio-gerente must own an interest in the limitada and is not necessarily involved in actual day-to-day Management. That, of course, very much depends on the size of the concern, for a limitada may be a storefront operation or a very large concern with several branches.
    Daily management of an S/A is in the hands of its diretoria. Diretores may be professionals, but, as often as not, the diretor-presidente is the founder of the business (or a member of his family) and its controlling shareholder. The other diretores may be personal friends or members of the immediate family of the diretor-presidente. A conselho de admnistração is optional for S/As de capital fechado, but mandatory for those who have gone public. A conselho fiscal, elected by the shareholders, is required to report on the audited financial statements.
    This structure creates a host of problems. A client of mine, after much pondering, arrived at the conclusion that the diretoria of his company (in this case, professional directors of a large multinational) was its executive committee and the diretores its executive officers. He called his diretor presidente a chief executive officer and his diretor financeiro a chief financial officer. He also called his conselho de administração a board of directors. Finally, he called his conselho fiscal a “conselho fiscal,” merely placing the Brazilian expression between quotes on the grounds that there was nothing anywhere in the world that could be considered equivalent to that body. In fact, he thought the conselho fiscal had merely ceremonial functions.
    This seems to be perfect. However, a Brazilian diretor usually has strong objections against this: diretores want to be directors. In their opinion, conselho de administração may very well be a board. But it cannot be a board of directors. To complicate matters, the Brazilian conselho de administração seems to be a lot less powerful than a board of directors, anyway. It is often insisted upon that the conselho fiscal be translated as board of supervisors, or even audit committee, although some larger S/As are developing comitês de auditoria entirely separate from the conselho fiscal. Conselho fiscal is often translated as fiscal council—an aberration that is often unavoidable
    Often translation of an annual report involves lengthy and not altogether satisfactory negotiations concerning the names of those officers and organs. Usually, a liberal use of capitals helps.

Firmas Individuais and Autônomos

Of course, you can work for and by yourself. In that case, you can chose between starting a firma individual (individual proprietorship) a form of operation almost extinct, or becoming an autônomo (self-employed), which is very common.

Sociedades Civis (created under the Civil Code)

The Commercial Code governs sociedades comerciais only, but not all sociedades can be classified as commercial. Translators for instance cannot form S/As, because they are not in commerce. Translators must operate as sociedades civis, abbreviated SC (companies organized under the civil code). I hold 50% of a sociedade civil, the other 50% being held by my wife. Ours is a sociedade civil por quotas de responsabilidade limitada, very much like a commercial sociedade por quotas de responsabilidade limitada, except that we are subject to different bankruptcy proceedings properly referred as insolvência civil (insolvency under civil law procedures). We are barred from engaging in commerce.
    Lawyers and some other professionals must operate in sociedades civis plain, meaning with unlimited responsibility, and thus very similar to a sociedade em nome coletivo, except that, as all sociedades civis, they are subject to different bankruptcy proceedings.
    All sociedades civis are pessoas jurídicas, although some of them are subject to special income tax rules similar to the pass-through rules applicable to a partnership in the US.

Non-profit organizations, such as charities, neighborhood clubs, professional associations and escolas de samba (carnival parading associations—not dancing schools) must also be organized under civil code rules. They are not business entities and properly referred to as associações (associations). However, as often as not they go by the name of sociedade civil sem fins lucrativos (non-profit organizations formed under Civil Code provisions), which may cause a little confusion.. They are also subject to insolvência civil procedures.
    All non-profit organizations are corporate bodies.

Sociedade Civil as “the citizenry”
Finally Sociedade civil is also used, in a non-technical sense, in the meaning of the citizenry. Not really a matter of corporate law, but this is an article for translators and we should watch our step.


Here and there, this article also discusses some examples of what I call “Brazilian pidgin.” Expatriate businesspersons (many of whom do not speak English well) often develop a form of pidginized English to communicate among themselves and with the natives. Often, the knowledge and use of pidgin is extended to a company’s head office abroad.
    In pidgin, bylaws, or even social contract, is often used for contrato social and it works fine, because everybody knows what everybody else is talking about. Newcomers are soon told that although local companies usually lack bylaws, the partnership agreement (articles of organization) is locally referred to as bylaws, and that is that.
    Unfortunately, pidgin often finds its way into documents prepared for the use of the non-cognoscenti. This may create a problem, as when Brazilian lawyers start discussing bylaws and their American counterparts believe they are discussing—well—bylaws—if I make myself clear.
    Once, I heard an exposition about the social contract in a business meeting. The solid burgher of Birmingham (UK) on the opposite side of the table could hardly hide his amusement. Fortunately the point was cleared up before much damage could be done. Later on, I was surprised to find the same social contract used in a printed publication of a well-known law firm that caters to the international trade.
    Unfortunately, once the client community accepts a given translation as “what is used,” it is very difficult to use something else, no matter how good it may be. Clients want to feel secure with translations and rocking their translatorial boats does not add to the sensation of security. Support for the status quo is often found in reference to documents published by others (“Look, this booklet published by this important law firm says “social contract.” Are you sure Americans will understand this “partnership agreement” or “articles of organization” of yours?). The fact that social contract does exist in English, although it is used in an altogether different sense, may serve as an additional argument for correct usage.
    Finally, an incorrect translation may be preferred because the correct one seems too vulgar or colloquial to Brazilian ears. Once, my “first-half earnings” was refused because it was “too slangy” and triumphantly replaced with “profits for the first semester,” thought to be more in keeping with the solemnity of an annual report.
    The only way to de-pidginize translations is to base our terminological research on original documents, not on other translations or bilingual dictionaries. But convincing clients who already know “what is used” may be a far more difficult task.


Do I need to insert a disclaimer here? Perhaps I do. It won’t hurt, anyway. I am neither lawyer nor accountant. So this is neither legal nor accounting advice. The information contained here intends to be of use to translators trying to sort out texts written in Brazilian Portuguese (or to non-translators trying to understand translated documents), not to investors who wish to start a business in Brazil. If you are in business and wish to set up a business in Brazil, you should seek the help of lawyers and accountants—and, of course, of a professional translator.


All the translations suggested between brackets are merely the best approximation I could find. None of them is nearly as good as carburetor for carburador. But I have already said that.
    One of my guides through this expedition into the jungle of corporate law was Harry G. Henn, Handbook of the Law of Corporations and other Business Enterprises (Saint Paul: West, 1970). After reading this article, how would you translate that title into Brazilian Portuguese? Professor Henn refers to and other Business Enterprises, because some types of enterprise dealt with in his book are not corporations.
    In Brazil, all of them would be. So, Direito Societário alone would do. However a book on Direito Societário would go a bit farther than Professor Henn’s book, since it would have to cover all sorts of not-for-profit organizations, which the book fails to deal with. Perhaps, Manual de Direito das Sociedades Comerciais would be a better translation.
    Six words where English needs ten. Who said Portuguese texts have to be longer than their English counterparts, by the way?

  © Copyright 1998 Translation Journal and the Author
Send your comments to the Webmaster

URL: http://accurapid.com/journal/05money.htm