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  • Limited Liability Company
    Limited Liability Company (LLC) is a company the registered capital of which divided into the
    shares stated by the constitutional documents; the participants of LLC are not liable for debts as
    well as bear the risk of loss connected with its activity within the frame of their deposits’ cost.
    The registered capital discloses the fundamental distinction between business companies overall
    and LLC in particular: the minimum amount of the property is registered in this type of
    organizations to guarantee the interests of the creditors. If on termination of the second or any
    following financial year the net asset value of LLC is less than the registered capital, the
    company is obliged to declare about the decrease of the latter; if the indicated value is less than
    constituted by law minimum, the company is to be dissolved. Thus the registered capital makes
    the lower permissible limit of net assets of the company which guarantee the interests of its
    There can be no Agreement of Incorporation (if the company has only one founder), however the
    Articles of Incorporation are obligatory. These two documents have completely different
    functions: the agreement states primary the interaction of the participants, while the articles state
    the relations between the company and the participants and third parties. One of the main aims of
    the articles is to state the registered capital as a liability of the company for third parties.
    The registered capital of LLC which consists from the value of its participants’ deposits must be
    at least 100 minimum salaries according to the Law of the Russian Federation “Concerning
    Limited Liability Companies”. The registered capital must have been paid at least by half by the
    moment of registration; the other part is to be paid within the first year of business activity of the
    The superior body of LLC is the General Meeting of Members (moreover, there is created an
    executive body which maintains the current activity management). The Civil Code of the
    Russian Federation places under the jurisdiction of it the following issues:
    - Amendment of the articles including the amount of registered capital;
    - Creation of executive bodies and early termination of their powers;
    - Adoption of the annual accounts and balance sheets, distribution of profits and economic
    - Election of audit commission;
    - Corporate restructuring and dissolution.
    A member of LLC can sell his/her share (or its part) to one or several members. It is possible to
    dispose a share or its part to third parties if it is not obliged by the Articles of Incorporation. The
    members of this company have the priority right to buy them (as a rule, proportionally with the
    amount of their shares) and can exercise it within 1 month (or other period stated by the
    members). If members resign the right to buy the shares and the Articles of Incorporation
    restrain to sell them to third parties, the company is obliged to pay its value to the member or
    give him/her property which is equivalent to its cost. In the latter case the company must either
    sell this share (to the members or third parties) or decrease its registered capital.
    A member has the right to leave the company at any time regardless of other members’ consent.
    In this case he/she is paid the cost of a part of property corresponding to his/her share in theregistered capital. The shares in the registered capital of LLC can be transferred under procedure
    of inheritance or legal succession.
    Corporate restructuring of dissolution of LLC is carried out by the decision of its members
    (unanimously) or through a court proceeding in case of statutory non-compliance or in case of
    bankruptcy. The grounds for abovementioned decisions can be in particular:
    - Expiration of time stated in the constitutional documents;
    - Achievement of aim the company was established for;
    - Recognition by the court the registration of the company as ineffectual;
    - Members’ rejection to decrease the registered capital in case of its underpayment within
    the first year of business activity of the company;
    - Decrease of the net asset value lower than lower limit of the registered capital on
    termination of the second or any following year;
    - Rejection to restructure LLC into JSC if the amount of its members exceeded stated by
    law limit and didn’t decrease to this limit within a year
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