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.
SCP 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.
S/As 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.
Management
Titles of management positions vary wildly
from company to company. In addition, there
may be some difference between legal requirements
and actual managerial practice.
Limitadas 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.
Associações
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.
Pidgin
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.
Disclaimer
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.
Envoy
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?