Lawyer as a legal entity: firm structure, Simples and taxation in 2026

A lawyer can practice as an individual or establish a single-member or multi-member law firm. Brazilian law firms follow specific rules: their constitutive document is registered with the relevant state chapter of the Brazilian Bar Association (OAB), not with the Board of Trade, and taxation under Simples Nacional follows Annex IV without the R-factor.

In 2026, the comparison also needs to consider the new withholding on certain distributions of profits and dividends.

How the law firm works

The Brazilian Bar Statute and OAB rules govern law firms. In a single-member firm, the owner must be a lawyer in good standing. The firm cannot take the form of a business company, use a trade name, carry out activities other than legal practice or include an owner who is not qualified as a lawyer.

Companies with more than one lawyer must also observe impediments, incompatibilities and sectional rules. The CNPJ number comes after the professional registration of the act.

Documents and decisions before registration

certificate and status of the lawyer at the OAB;
name in accordance with professional rules;
municipal headquarters and viability;
purpose limited to legal practice;
owner or partnership structure;
administration and participation in results;
draft constitutive document;
tax registration and municipal registration;
contract with clients and fee policy.

Consult the section for the document list and current models.

Advocacy in Simples: Annex IV, without R factor

Legal services are taxed in Annex IV. The R factor does not move law practice to Annexes III or V. This rule differentiates the office from several other intellectual activities.

Under Annex IV, the employer social security contribution is not included in the DAS unified tax payment and must be calculated separately based on payroll and remuneration. Comparing DAS rates alone therefore understates the total cost.

What to compare with Lucro Presumido

Under Lucro Presumido, the analysis must separate:

IRPJ and additional, when applicable;
CSLL;
PIS and Cofins;
ISS according to municipality and local regime;
social security contribution on remuneration;
retentions made by customers;
compliance cost.

In 2026, Complementary Law No. 224/2025 changed presumption percentages on the annual portion of revenue above R$5 million. Old spreadsheets need to be updated.

Pró-labore, fees and profit distribution

Fees belong to the firm when the service agreement and tax invoice are issued by the legal entity. Amounts withdrawn by a lawyer must be classified and recorded: compensation for work cannot be treated as profit distribution.

Distributed profit requires accounting calculation and deliberation. Since January 2026, when the same company pays more than R$50,000 in profits or dividends in a month to the same resident individual, there is an IRRF of 10% on the total. There is also an annual calculation for high incomes. Therefore, “all dividends are exempt” is no longer a safe guideline.

Individual practice or law firm: compare like with like

For individual practice, taxable fees, withholding and the Livro Caixa expense ledger follow personal income tax (IRPF) rules. A law firm adds business taxes, bookkeeping, OAB registration for the legal entity and municipal costs. Both scenarios must use the same revenue and include every cost layer.

Errors that need to be left out of planning

register the company with the Commercial Registry;
use an ordinary LTDA or a trade name as if the OAB permitted it;
apply R factor to law;
compare DAS with Presumed without employer contribution;
treat distribution as free withdrawal;
include non-legal activity in the same object;
assume that the CNPJ excludes an employment relationship with a single contractor.

Next step

Gather revenue by client, payroll, withdrawals, expenses and municipality. VMAHUB can compare individual practice, Simples Nacional under Annex IV and Lucro Presumido, while coordinating the accounting steps with professional registration at the OAB.