A limited liability company is a legal entity organized by one or more founders. Its authorized capital consists of the shares of the founders, which is recorded in the documentation. Legislation regulates the creation and management of society.
The main governing body of an LLC for most legal entities of the type represented is often limited to two positions. This is the CEO and chief accountant of the company. But the overall structure looks much broader. Governing bodies are appointed or elected at the institution. Their structure is indicated by law. It will be discussed further.
Management Structure
When creating a legal entity in the form of a limited liability company, there are certain requirements established by law. In addition to entering their shares in the authorized capital, the founders are required to appoint or select the main bodies that will manage their company.
Their structure is quite extensive, although in many societies it can be simplified.
The management bodies of the LLC are the following structural entities:
- First of all, the participants (or one founder, if only his funds were allocated for the formation of the authorized capital) exercise control over their organization.
- In addition to the founders, experienced professionals are hired for management positions. If there are several, they form a board of directors (supervisory board). In some enterprises, these positions may be abolished. They are optional.
- Another governing body is collegial management.
- To exercise control over other managers, the founders of the company can resort to the services of an auditor or auditor.
You should learn more about each of these structural units. Each of them plays a role in the implementation of the effective activities of the company.
General meeting of founders
The supreme governing body of the LLC is the meeting of the founders. Each participant who has contributed his share in the authorized capital of an enterprise has the right to make decisions on the directions of his company’s activities. If there are several founders, they gather with a certain frequency to resolve the main issues regarding the functioning of their organization.
Such fees may be regular or extraordinary. Each founder has a voting right, the weight of which is determined by the size of the share contributed by him in the process of founding the enterprise.
The main document governing the management of the meeting of founders is the charter. It defines the competence of this body, as well as other structural units.
Founders Meeting Competency
The supreme governing body of the LLC has a number of rights that fall within their exclusive competence. First of all, this includes questions about the main direction of the company’s functioning, making decisions about association or participation with other organizations.
The meeting of the founders of the company may also change the provisions of the charter, including the structure of the company's balance sheet. They amend the contract to create an organization. This body appoints contractors who will oversee the rest of the company’s staff.
The Board of Founders elects and terminates the work of the auditor and auditor, approves the information provided in the annual accounts. Based on these data, according to the results of the reporting period, a decision is made on the distribution of net profit.
The highest governing body regulates the internal issues of their company. He can place bonds, other securities.
If necessary, the board of founders has the right to reorganize or liquidate your company, appoint members of the liquidation commission, and approve financial issues in these conditions.
Board of Directors
The management structure of the LLC includes such a unit as the board of directors. The founders when creating the charter form it. Also in this document stipulates the procedure for the appointment of performers for the presented position.
The founders stipulate the terms of reference and the procedure for the supervisory board. The main ones are making decisions on the future direction of the company, adopting and approving internal documents, entering into transactions in which the company entrusted to them is interested in the law.
Also, the supervisory board organizes a regular or extraordinary meeting, decides on its conduct and convening of participants. The board of directors prepares documentation that is provided to the founders. At a meeting, this body may participate in the discussion of substantive issues with deliberative voting rights.
Powers of the Board of Directors
An LLC management body such as a board of directors has a number of powers. In addition to the rights listed above, he can form executive bodies, as well as prematurely terminate their activities. The supervisory board also determines their authority. He appoints the amount of remuneration to the sole performer, collegial managers.
The board of directors may decide on mergers with other commercial organizations. He also has the right to create branches, representative offices.
In addition, the supervisory board appoints an audit, approving the main positions of the candidates they have chosen. He approves the amount of their remuneration for the rendered audit services.
Executive agency
The collegial governing body in the LLC is represented by directors and the board. But the current activities of the company can also be managed by a sole performer. This body is accountable to the meeting of founders and the supervisory board. The sole executor may be the president, general manager or other manager. He is elected at a general meeting. The duration of his authority is stipulated by the charter.
An agreement is concluded between the company and the person performing sole executive activity. For the collegial body, the constituent council also establishes their authority, quantitative composition. For this, internal documents are also issued.
A collegial body may consist only of individuals. They do not have to be members of society. The chairman of the collegial governing body is the sole executor. Sometimes these functions are transferred to the manager.
The powers of the executive body
The responsibility of the LLC management bodies is regulated by the charter and internal documentation. The executive body is charged with a number of powers. Since the collegial managers are headed by the chairman, he has a number of special powers.
The sole performer may represent the interests of the company without a power of attorney, act on his behalf and complete transactions. In addition, he gives powers of attorney for representative activities.
The executive body in the person of the chairman, director may issue orders related to the appointment of various employees. He also solves questions about their transfer, dismissal. The sole performer may take measures to impose disciplinary sanctions or rewards.
Examiner and Auditor
The controlling body of the LLC , called the auditor or auditor, is elected at a meeting of the founders. The number of its members is determined by the charter. This body can carry out financial and business checks at any time, has access to relevant documentation.
The auditor must check the annual reports, balance sheets before approval at the general meeting. The founders meeting cannot accept such documents without an audit.
Having examined each governing body of an LLC , you can understand their area of competence. The structure in each company can be simplified, but in its entirety it includes all the services listed above.