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Merging or spinning off a Brazilian company as a way to exit

Last verified: 2026-10-27 · Status: Stable

A merger into another group company or a spin off can close a Brazilian entity without a liquidation: the absorbed company is extinguished and its assets and liabilities pass to the successor. Prior creditors get 60 days (S.A.) or 90 days (Civil Code) to challenge, dissenters may withdraw, the absorbed company files final tax returns on the event date, and its tax losses are lost. Group mergers under the same control since the prior year are spared a special filing for the absorbing company.

USD figures use the Banco Central do Brasil PTAX selling rate of R$5.3346 per US dollar for 27 October 2026 (PTAX had moved from 5.0377 on 23 October to 5.5007 on 26 October). Conversions are for orientation only; the rate on the day of each FX contract will differ.

Key facts

Days for a prior creditor to sue to annul an S.A. merger or consolidation	60 daysLei nº 6.404 art. 232, as of 2026-10-27 · in force
Days for a prior creditor to seek annulment of a merger, consolidation or spin off (Civil Code)	90 daysCivil Code art. 1.122, as of 2026-10-27 · in force
Days for a prior creditor to object to a partial spin off limiting liability	90 daysLei nº 6.404 art. 233 sole paragraph, as of 2026-10-27 · in force
Maximum days before the event for the specific balance sheet	30 daysLei nº 9.249 art. 21 § 1, as of 2026-10-27 · in force
Successor's use of the absorbed company's tax losses	Not allowed DL 2.341 art. 33, as of 2026-10-27 · in force
Junta Comercial decision period for merger, consolidation and spin off acts	5 business daysLei nº 8.934 art. 41 sole paragraph, as of 2026-10-27 · in force

The rule

1. Merging away instead of liquidating. In an incorporação one or more companies are absorbed by another, which succeeds them in all rights and obligations; the absorbed company is extinguished once the absorbing company's meeting approves the appraisal report and the operation, and the absorbing company files and publishes the acts. A merger, consolidation or spin off may involve companies of the same or different types and is approved in the form required to amend each company's bylaws or articles.Lei nº 6.404 of 15 December 1976 (Corporations Law), Arts. 219 item II, 223 and 227 §§ 1 to 3, 1976-12-15 official text · verified 2026-10-27

2. Protocol and justification. The terms are set in a protocol signed by management or partners (share exchange ratio, assets and liabilities of each portion in a spin off, valuation criteria and date, treatment of cross holdings, capital changes, draft bylaws) and submitted to the meeting with a justification stating the reasons, the post deal capital and the reimbursement value for dissenters.Lei nº 6.404, Arts. 224 and 225, 1976-12-15 official text · verified 2026-10-27

3. Spin off (cisão). A company may transfer parts of its net assets to one or more new or existing companies; it is extinguished if all of it is transferred, or its capital is divided if only part is. Companies absorbing parts succeed to the obligations listed in the act; in a total spin off they succeed to unlisted obligations in proportion to the net assets received. Shares must be allocated in proportion to existing holdings unless all holders, including non voting ones, agree otherwise.Lei nº 6.404, Art. 229 §§ 1 to 5, 1976-12-15 official text · verified 2026-10-27

4. Creditors. Up to 60 days after publication of a merger or consolidation, a prior creditor harmed by it may sue to annul it; paying or depositing the amount defeats the claim. In a total spin off the receiving companies answer jointly for the extinct company's obligations; in a partial spin off they and the remaining company answer jointly for prior obligations, unless the act limits liability to the obligations transferred, in which case any prior creditor may object by notice within 90 days of publication. A company with debentures in circulation needs prior approval of the debenture holders unless it offers them redemption for at least 6 months.Lei nº 6.404, Arts. 231, 232 and 233, 1976-12-15 official text · verified 2026-10-27

5. Ltda. rules. Under the Civil Code the absorbed company's partners approve the terms and the draft amendment; the absorbing company appoints experts to value the net assets; once approved, the absorbing company declares the absorbed company extinct and registers it. A prior creditor harmed by an incorporação, fusão or cisão may seek annulment in court within 90 days after publication. A dissenting partner may withdraw within 30 days of the meeting.Lei nº 10.406 of 10 January 2002 (Civil Code), Arts. 1.077, 1.116, 1.117, 1.118 and 1.122, 2002-01-10 official text · verified 2026-10-27

6. Dissenting shareholders. A merger into another company or a consolidation gives dissenters an appraisal right, except for liquid and dispersed share classes; for mergers and consolidations the 30 day window runs from publication of the minutes approving the protocol, and payment is due only if the deal goes through. A spin off gives the right only if it changes the corporate purpose (unless the receiving company has the same main activity), reduces the mandatory dividend or leads to a group of companies.Lei nº 6.404, arts. 137 items II and III and 230 (wording of Lei nº 9.457 of 5 May 1997 and Lei nº 10.303 of 31 October 2001), Arts. 137 II and III; 230, 2001-10-31 official text · verified 2026-10-27

7. Tax on the event. A company absorbed, merged or spun off draws up a specific balance sheet no earlier than 30 days before the event and computes income tax on the event date; it files a return in its own name for the part of the year elapsed. The successor cannot use the tax losses of the absorbed company; in a partial spin off the remaining company keeps its own losses in proportion to the net assets it keeps.Lei nº 9.430 of 27 December 1996, art. 1 § 1; Lei nº 9.249 of 26 December 1995, art. 21 as worded by Lei nº 12.973 of 13 May 2014; Decreto-Lei nº 2.341 of 29 June 1987, art. 33, Lei nº 9.430 art. 1 § 1; Lei nº 9.249 art. 21 §§ 1 and 4; DL 2.341 art. 33, 2014-05-13 official text · verified 2026-10-27

8. Successor liability for tax. The company resulting from a merger, consolidation or transformation is liable for the taxes owed up to the date of the act by the companies merged, consolidated or transformed.Lei nº 5.172 of 25 October 1966 (National Tax Code), Art. 132, 1966-10-25 official text · verified 2026-10-27

9. Filings. The special situation ECF and ECD are due from the companies extinguished, spun off, merged and absorbing, but the absorbing company is exempt when both companies were under the same control since the year before the event. At the Junta Comercial, incorporation, consolidation and spin off acts are decided by a collegial panel within 5 business days. The CNPJ of the absorbed company must be closed, and an outdated partners' list does not block that closure when the successor is domiciled in Brazil.
Cost to do it: JUCESP 2026 charges incorporation, consolidation and spin off per act according to the type of each company involved (item 19): R$583.98 per S.A. minutes and R$273.55 per Ltda. act (about US$109 and US$51).Instrução Normativa RFB nº 2.004 of 18 January 2021, art. 3 §§ 2 and 3; Instrução Normativa RFB nº 2.003 of 18 January 2021, art. 5 §§ 3 and 4; Lei nº 8.934 of 18 November 1994, art. 41 I b and sole paragraph; Instrução Normativa RFB nº 2.119 of 6 December 2022, arts. 24 I b to d and 25 sole paragraph I, IN 2.004 art. 3 §§ 2 and 3; IN 2.003 art. 5 §§ 3 and 4; Lei nº 8.934 art. 41; IN 2.119 arts. 24 and 25, 2022-12-06 official text · verified 2026-10-27

Event month	ECF due	ECD due
January to April	Last business day of July of the same year	Last business day of May of the same year
May to December	Last business day of the 3rd month after the event	Last business day of the month after the event

Special situation filing deadlines on extinction, merger or spin off (IN RFB nº 2.004 art. 3 § 2; IN RFB nº 2.003 art. 5 § 3, as published).

Worked example

A foreign group owns two Brazilian Ltda. companies and wants to exit one market line. Instead of liquidating the smaller one, it merges it into the larger. The absorbed company draws up a balance sheet dated no more than 30 days before the event (Lei nº 9.249 art. 21 § 1), the absorbing company appoints experts to value its net assets (Civil Code art. 1.117 § 2), and the absorbed company is declared extinct and registered (art. 1.118). Its R$2,000,000 (about US$374,911) of tax losses disappear (DL 2.341 art. 33), so the merger direction matters: absorbing the loss making company into the profitable one loses the losses.
If the event happens on 15 June 2026, the absorbed company's ECF is due on the last business day of September 2026 and its ECD on the last business day of July 2026; the absorbing company is exempt from its own special ECF and ECD because both companies were under the same control since 2025 (IN RFB nº 2.004 art. 3 § 3; IN RFB nº 2.003 art. 5 § 4).

Step by step

1. Model the tax: direction of the merger (losses of the absorbed company are lost), goodwill and the final returns of the absorbed company.
2. Draft the protocol and justification (Lei nº 6.404 arts. 224 and 225) and commission the appraisal of the net assets.
3. Hold the meetings in each company with the quorum for amending its articles or bylaws; S.A. dissenters may claim reimbursement within 30 days (art. 230).
4. If debentures are outstanding, obtain debenture holders' approval or offer redemption for at least 6 months (art. 231).
5. File at the Junta Comercial (collegial decision in 5 business days, Lei nº 8.934 art. 41) and publish; the creditor windows of 60 or 90 days start running.
6. File the special situation ECF and ECD on time, close the absorbed company's CNPJ (IN RFB nº 2.119 art. 24 I b) and update registrations in property and other registries with the Junta certificate (Lei nº 6.404 art. 234).
7. Report the reorganization's effects on the foreign investment in SCE-IED and check merger control thresholds at CADE before closing (see Merger control).

Common traps

Losing tax losses. The successor cannot use the absorbed company's losses (DL 2.341 art. 33); merging the wrong way round destroys a tax asset.
Joint liability in spin offs. Without a valid limitation clause, receiving companies answer jointly for the spun off company's prior obligations (Lei nº 6.404 art. 233).
Creditor windows. Prior creditors have 60 days (S.A. merger) or 90 days (Civil Code) to challenge (Lei nº 6.404 art. 232; Civil Code art. 1.122).
Tax follows the successor. The surviving company is liable for the absorbed company's taxes up to the event (CTN art. 132), so diligence of the absorbed company still matters inside a group.

Sources

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