What is an LLC?
A limited liability company (abbreviated “LLC” or “LLC”) is an organization whose share capital is divided into shares, the size of which is set by the company’s charter. A limited company is a kind of economic society.
The essence of the Limited Company is that the members of such a society are responsible for its limited liabilities. The name Limited Company does NOT mean limiting the liability of a company as a subject of economic law, a certain amount of property or money, and it is about limiting the liability of participants who bear the risks of losses within their deposits in the share capital, which they may lose. But additional requirements for participants are NOT put forward, it is impossible to collect additional sums from the participants (as opposed to the full or team partnership).
The law firm AGTL is engaged in the registration of legal entities in the form of LLC.
Specialists of the company, who have extensive experience in the field of corporate law, will help to formalize the relationship between the founders, the relationship with the CEO or the management body, choose the tax system, choose the bank and address.
Identifying possible risks in the business activities of the established firm, optimizing tax payments, financial and material resources; a full package of additional services to create and support the business.
- Professional advice from a lawyer on the start of your business, which will eliminate the need for numerous changes at the beginning of the activity;
- convenience and time saving at all stages:
We can arrange for a notary to go to your office,
The bank manager will arrive at a convenient time for you to open an account,
We can get documents for you by proxy.
- a wide range of additional services: a large selection of partner banks, help finding a legal address, keeping accounting.
The new Act makes numerous and profound changes in the regulation of limited-activity and complementary societies, including:
- the need to obtain the consent of other participants to exit the party, which owns a share of more than 50%;
- recognition at the legislative level of corporate contracts (so-called ‘shareholders’ agreements”) that are confidential and should be gratuitous;
- Reducing the period for a full contribution by a member of society from one year to six months from the date of the state registration of the society;
- the transition of the party’s rights to his heir or successor without the consent of the members of the society;
- establishing rules on significant transactions and transactions with interest (for example, transactions worth more than 50 per cent of the company’s net assets at the end of the previous quarter require the prior consent of the general meeting of participants). Other rules can be set by the statute.
Number of participants and controls
The new law does not limit the number of members of the LLC or ODO. As a result, many shareholder companies (AOs) will be able to return to the form of a limited or additional liability company.
In addition, there is an opportunity to create a supervisory board, which will significantly increase the attractiveness of the LLC in the eyes of foreign investors.
Now the society itself has the right to decide the absolute majority of issues, i.e. does not establish unambiguous rules. It is possible to adopt its own procedures, identify the bodies that society needs in corporate governance and anticipate in advance possible ways out of potential corporate conflicts. For example, in a one-member society, the latter is no longer obliged to imitate a general meeting, but makes all decisions alone in the form of a written decision.
The rules of interaction between the participants of a particular enterprise will be reflected in the so-called corporate contract and charter.
For the LLC and the UDO opened the opportunity to issue irrevocable proxies for the exercise of the powers of the member of the society, as well as to conclude corporate contracts between the participants.
Under such a treaty, members of society are obliged to exercise their rights and powers in a certain way or to refrain from their implementation.
Also important is the issue of selling shares of the company: under what circumstances, who and for how much can buy them.
Leaving the community
The parliamentarians gave the issue of the exclusion of the participant from the LLC to buy back the statute, without interfering with this procedure of the law.
The company has the right to set different percentage quotas for decision-making on different issues.
The new law proposes a mechanism of decision-making without taking into account the share of the deceased participant, and if it is more than 50% – to decide to liquidate the enterprise without taking into account the share of the deceased participant.
At the same time, for example, it is not clear what to do if the participant has not paid his share.
Increase in share capital
Often companies accumulate undistributed profits (if dividends are not paid for years). And if a decision is made to pay dividends, then these costs can put the LLC on the verge of bankruptcy.
Now there is an opportunity to immediately increase the share capital at the expense of profits without the distribution of dividends.
Benefits of a limited company
- The founders and participants of the LLC can be both individuals and legal entities, both residents and non-residents.
- The size of the share capital of the LLC is not limited. Flexible conditions of filling the share capital.
- Registration of an LLC with one member is not prohibited.
- Simplified system of management of the enterprise – the powers of the executive body of the enterprise, usually single, are limited by the powers of the highest management body – the meeting of founders (participants).
- There are no statutory requirements for the compilation and presentation of special reporting, as well as its publication (as for AO).
- Members of the society do not meet its obligations and carry the risk of losses related to the activities of the society, within the value of their deposits.
- There is no need to carry out additional financial costs