A limited liability company (LLC) is a company that is founded by one or more individuals (legal entities) in order to obtain commercial income. The financial basis of any LLC is the equity participation of the co-founders on equal equal terms or in accordance with the general agreement drawn up as a constituent document.
The register of owners, according to which the profits / losses of each of the participants in limited liability companies are calculated, is a kind of "constitution" of the company. The content of the document is considered a trade secret. Moreover, it is characteristic that the value of potential losses is commensurate with the value of equity participation and cannot exceed the financial equivalent of the market value of shares. For example, one of the shareholders owns 35% of the shares. Accordingly, its share in profit / loss also does not exceed 35% of the company's capitalization.
What is the difference between such a company?
A limited liability company has a constituent fund in the amount of more than 100 minimum salaries. The charter of the LLC lays down procedural issues and rules for the formation of the structure of the company, stock management, profit distribution and liability for payments in the event of force majeure, bankruptcy. A separate document establishes the principles of conducting financial and economic activities and market behavior. Registration of limited liability companies takes approximately 10 days. Then, the company management is given copies of the registration certificate, Articles of Association and an extract from the Unified State Register of Legal Entities.
Statutory Rights and Obligations
The founders of limited liability companies do not bear any personal responsibility for the activities of the LLC. In other words, they can be its founders, but not leaders. In addition, even if we are talking about liability, it follows from the fact of ownership of shares, that is, force majeure circumstances can only lead to the redistribution of assets and equity in the business.
The statutory fund of limited liability companies is formed both through financial injections and technical investments. Thus, they can be created only on the basis of attracting industrial and other means that are not directly related to resolving financial issues. Although you still have to attract working capital, funds for the purchase of licenses, etc.
It is crucial that if any of the limited liability companies does not make a profit, then contributions to the Pension Fund are temporarily suspended.
Among the shortcomings - a shareholder can leave the company at any time. At the same time, he is entitled to a compensation payment in the amount of his share in the authorized capital. Often, such cases lead to the forced closure of small LLCs, which requires additional costs - the bankruptcy procedure is quite complicated and bureaucratically complicated. We must not forget about the close attention on the part of state regulatory bodies. At the very least, financial and tax monitoring of the LLC’s activities is rather scrupulous and unpleasant for young companies.