Limited Liability Companies Gain Access to Debentures: A New Financing Alternative for International Groups in Brazil

On February 9, 2026, the National Department of Business Registration and Integration (DREI), the federal agency responsible for guiding and standardizing the activities of the Commercial Registries throughout Brazil, issued Circular Official Letter SEI No. 92/2026/MEMP, accompanied by Technical Note SEI No. 135/2026/MEMP. The document instructs the Commercial Registries to accept the registration of issuances of debentures by limited-liability companies, a matter that has faced resistance in Brazil for decades. The guidance remains the main reference on the subject and deserves the attention of international groups whose Brazilian subsidiaries overwhelmingly adopt this company type.

Debentures are debt securities: the company receives funds from an investor and agrees to repay them within a specified period, with the return established in the debenture indenture, which is the document that sets out all the terms and conditions of the transaction. They are governed by Law No. 6.404, dated December 15, 1976 (the Brazilian Corporations Law), which is why the instrument has traditionally been associated with joint-stock companies. As the Civil Code, which governs limited-liability companies, contains no provisions on the subject, a restrictive interpretation developed, and some Commercial Registries even refused to register such issuances.

DREI’s position is based on an argument of consistency. Law No. 14.195, dated August 26, 2021, already expressly allowed limited-liability companies to issue commercial notes, a debt security similar to a debenture, including with a provision authorizing conversion into equity interest in the company through a private offering. If the legislature allowed this instrument, there would be no reason to prohibit debentures, particularly convertible debentures, which DREI considers the most suitable form for limited-liability companies. The guidance also relies on the absence of a statutory prohibition and on the principle of minimal government intervention in economic activities, established by Law No. 13.874, dated September 20, 2019 (the Economic Freedom Act).

key point is supplemental application of corporate law: the Civil Code allows the articles of association of a limited-liability company to adopt, for matters not addressed therein, the rules of the Brazilian Corporations Law, and this is the legal bridge that makes the issuance possible. According to DREI, a specific provision addressing debentures is not required, as supplemental application may be expressly provided for or inferred from the adoption of an institution typical of joint-stock companies, such as a board of directors, fiscal council, or preferred quotas. In the absence of such elements, it is sufficient to register an amendment to the articles of association providing for supplemental application of the Brazilian Corporations Law or referring to one of these institutions, including the issuance of debentures itself.

The issuer must also maintain its own debenture registration and transfer books, in which assignments must be signed by both the assignor and the assignee in order to be effective against third parties.

For international groups, this development creates a significant new financing alternative for Brazilian subsidiaries. Today, the parent company typically chooses between a capital increase, which is permanent and difficult to reverse, and an intercompany loan. Debentures convertible into equity interest in a limited-liability company occupy a middle ground: the funds are initially provided as debt, with a defined maturity, remuneration, and, where applicable, collateral, while the investor may ultimately choose between repayment and conversion into equity interest in the company. The same rationale applies to funds investing in Brazilian companies organized as limited-liability companies, particularly in venture capital and private equity transactions involving privately-held companies. As conversion changes the company’s ownership structure, dilution, rights of first refusal and preemptive rights, and voting rights should be clearly addressed in both the debenture indenture and the articles of association.

When the subscriber is located abroad, the transaction must also comply with the foreign capital rules set forth in Law No. 14.286 of December 29, 2021, and the regulations issued by the Central Bank of Brazil (BCB). The applicable regulatory framework must be assessed on a case-by-case basis.

The guidance, however, has a limited scope. It directs the conduct of Commercial Registries but does not amend the law or bind the Judicial Branch. The DREI itself has stated that the matter remains under review for potential future nationwide regulation.

In Brazilian Congress, Bill No. 6.322/2013, pending before the Chamber of Deputies, and Bill No. 3.324/2020, pending before the Senate and now being considered in conjunction with the reform of the Brazilian Civil Code, seek to expressly regulate the matter. However, no voting schedule has yet been established.

The Circular Official Letter also does not specify which corporate body of a limited-liability company must approve the issuance. Some practitioners apply the rules governing commercial notes by analogy, under which the decision falls within the authority of the company’s management. Nevertheless, as a matter of prudence, approval by the members is recommended, particularly for convertible debentures.

Finally, issuances offered to the public or traded in the securities market remain subject to regulation of the Brazilian Securities Commission (CVM), which has not yet specifically addressed issuances by limited-liability companies.

Although definitive regulation is still pending, the DREI’s guidance represents a concrete step forward: limited-liability companies now have access to a financing instrument that previously required them to convert into joint-stock companies. International groups should therefore consider reviewing the articles of association of their Brazilian subsidiaries now to determine whether supplemental application of the Brazilian Corporations Law is provided for, ensuring that this financing alternative is available when needed.

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For more information on the above or other matters, please contact Maristela SA Rossetti (mar@rraa.com.br) or Gilberto Rossetti (gmr@rraa.com.br).

This article is based on publicly available information and given for informational purposes only. It is not intended as legal advice or as a comprehensive analysis of the matters referred to herein.