Due to various circumstances , a limited liability company may need a procedure such as a reduction in the share capital. LLC in this case must follow a strictly defined algorithm. It is also important to understand in which situations such actions may be not only relevant, but mandatory.
Reasons for changes in the Criminal Code
So, initially it’s worth understanding that a voluntary procedure for changing the Criminal Code is possible, so to speak, when the people of society, without any external requirements, decide to make the changes that they think are necessary. But more often than not, such a process is caused by necessity, due to the norms enshrined in the current legislation.
Those situations in which the procedure for reducing the authorized capital of an LLC is unavoidable are as follows:
- If in the second fiscal year ended, as well as in each subsequent one, a decrease in the value of all assets of the company is lower than the size of the authorized capital (based on the accounting results). With these results, capital should be reduced to the amount that does not exceed the total value of all net assets that the company has.
- The process of reducing the authorized capital is also relevant in the case when, a year after the state registration of the LLC, the amount of the declared authorized capital was not fully paid. In this case, according to the requirements of the law, capital is reduced to the level of the actual amount paid before.
- When one or more participants leave the company.
The decrease in the authorized capital of the LLC does not yet indicate a deterioration in the affairs of the enterprise, in some cases this is nothing more than a working moment.
What is defined as registered capital?
Before delving into the nuances of reducing the Criminal Code, it is worth deciding on the meaning of this term.
In fact, we are talking about the totality of all LLC shares that were contributed in the form of cash and not only. After reviewing the current legislation, you can find out that the minimum size of the company’s Criminal Code should not fall below the mark of 10 thousand rubles. Moreover, its size, in fact, as well as the share of each of the participants, is determined only in rubles.
For the formation of the authorized capital it is necessary to open a special account, the founders do it. It should be understood that to create a management company, both financial resources and securities, intangible and tangible assets of the beneficiaries can be used. It is their number that can be reduced when the size of the authorized capital of the LLC is reduced.
But before you reduce any property in the fund of LLC, it must be evaluated. Moreover, such an asset component as securities should be reassessed on an ongoing basis.
Convening a meeting
This is the first stage of such a procedure as reducing the authorized capital of LLC. A step-by-step instruction begins with it.
In order to initiate a reduction in the size of the authorized capital, the participation of all the founders of the company is necessary. For this purpose, a general meeting is convened. The reduction process itself begins only when, according to the results of the vote, at least 2/3 of the participants support the need to reduce the authorized capital. It is also worth noting that in the charter of each specific organization the minimum number of votes may be greater than the specified ratio.
If the LLC was founded with the participation of only one founder, then a sole decision will be sufficient to make a decision.
As a result of the convocation, not only a decision regarding the Criminal Code should be taken, but also necessary changes made in the charter of society.
Tax Inspection Notice
The next step, which implies a procedure for reducing the authorized capital of an LLC, is to inform the tax authority. After a decision has been made regarding the Criminal Code, this must be reported to the local tax office, and this must be done within three days.
For competent registration of such information, there is a form P14002. The finished statement must be signed by the director of the LLC. And even if this document will be submitted to the IFTS personally by the director, then his signature will still have to be notarized. Such a measure is irrelevant only in the case of using the electronic version of the application with enhanced EDS.
During a visit to the local tax office, the applicant is also required to have with him the decision of the company regarding the reduction of the authorized capital, a power of attorney (relevant for intermediaries) and a passport.
5 days after the moment when form P14002 was submitted, the tax inspectorate should make a record in the Unified State Register of Legal Entities that a procedure for reducing the authorized capital has been launched in a particular LLC.
Creditors Notice
A decrease in the authorized capital of an LLC inevitably implies informing lenders of such a decision, who once provided money to the company. Moreover, they must be notified in accordance with certain rules.
In more detail, you need to use the forms on the official website of the journal “State Registration Bulletin”. Here, subsequently, a notice will be published, which will become available to the attention of users. It is worth knowing that two publications are being made: first, after the LLC receives the registration sheet in the USRUP from the INFS, and then a month later after the first notification was posted in the journal.
This ends the process of notifying creditors.
Documents for IFTS
After the issue of publication is resolved, you will need to pay attention to the preparation of the documentation necessary for registering changes in the charter of the company . All papers must be submitted to the local tax office. Their list is as follows:
- a document confirming the payment of state duty;
- notarized statements written in the forms P13001 and P14001;
- a protocol on reducing the charter capital of an LLC drawn up by the general meeting or an official decision by a person who is the sole founder (in this case, there is simply no one to collect);
- Amended charter of the company in the new edition, showing all the amendments made (filed in duplicate);
- if the process of changing capital is carried out in accordance with paragraph 4 of Art. 90 of the Civil Code of the Russian Federation, you will need to pay attention to the allocation of assets.
It will also be necessary to provide documentary evidence of the fact that creditors were notified of a decrease in the authorized capital. For this purpose, the printed edition of Vestnik magazine is suitable.
Change Confirmation
Within the framework of such a topic as “reduction of the authorized capital of LLC”, the step-by-step instruction is completed upon receipt of documents that will serve as the official confirmation of the fact of changes in the Criminal Code.
It is worth knowing that the registration process of the updated charter of the tax inspectorate will require an average of 5 working days. After this period, the applicant's authorized representative or director will personally receive the revised charter of the company, as well as a sheet with an entry from the USRUP, with the data on the reduced Criminal Code displayed.
As you can see, excessive efforts are not required in order to organize such a process as reducing the authorized capital of LLC. The instruction allows you to do everything relatively quickly.
What you need to know about the form P13001?
When using this form, you can find that it consists of several sheets including the title page. Only those that contain paragraphs relating to changes in the Criminal Code need to be completed. More specifically, attention will have to be paid to sheet B.
It is also important to understand that there are a number of rules, the implementation of which is mandatory when filling out the form.
For example, in lines 1-3 of the above-mentioned sheet B, you need to display information about the form of the company and its constituent assets, as well as indicate the essence of the planned actions - increase capital or decrease it. In this case, it is worth remembering that all amounts are prescribed in rubles. Further, proceeding to line 4, it is necessary to enter the dates of publications in the journal Vestnik, which was discussed above.
The next aspect of working with this form is selecting a sheet according to the LLC form and filling out information about each entity that is a member of the company. It will also be required to indicate what share members of the company have. Moreover, if there was a decrease in the share of the authorized capital of the LLC, then you need to select the “I” sheet, and then display this information in it.
Finally, you should number the pages. For this purpose, special services are suitable that allow you to perform this procedure correctly.
If in the process of filling out the form mistakes were made, typos or any corrections, the document will not be registered and the procedure will have to be repeated.
Possible consequences in the absence of necessary changes in the charter
As it was written above, a decrease in the authorized capital of an LLC in some cases is a mandatory measure in accordance with applicable law. If this measure is ignored, then one may encounter the corresponding reaction of the tax service.
At the same time, it is worth knowing about the following nuance: if the shares that belong to the company were repaid later than the required date, then fines will not be imposed. But instead, the registering authority will receive a legitimate reason to send a statement of claim to the arbitration court. The purpose of such a statement will be the termination of the LLC. Obviously, such a measure is much more severe than fines.
In fairness, it should be noted that, before punishing society so severely, the tax service will offer him to neutralize the violations committed voluntarily, thereby avoiding a sad outcome.
The lawsuit on the liquidation of the LLC can be satisfied if the recorded violations were not corrected or were too gross. Such a result is also possible when significant damage was caused to third parties, for example, members of the company and not only.
Thus, the decrease in the authorized capital of the LLC (including posting on the accounting of funds) should be timely.
Creditors Rights
It is important to keep abreast of what legal entities lending to LLC can count on. This will predict their possible actions. If the funds were received by the company before the process of reducing the authorized capital, the creditor has the full right to require him to fulfill obligations ahead of schedule. This means that the LLC will have to return the borrowed amount within 30 days from the moment the first publication was made about the change of the Criminal Code in the journal.
Of course, in some cases, the company may be unable to repay the loan in the right amount per month. Then the person in respect of whom the obligation has not been fulfilled, receives the right to file a claim for termination of the contract and reimbursement of the losses incurred by the company.
The limitation period in this case is limited to a period of 6 months from the date of publication of the first notification of a decrease in the authorized capital.
But the LLC has a chance to achieve the cancellation of the lawsuit. To do this, one of the two facts must be proved:
- the company has sufficient security to fulfill the obligation;
- the rights of creditors were not violated in the process of reducing the authorized capital.
Otherwise, the claim will be satisfied.
Tax consequences
After a decision has been made to reduce the authorized capital of an LLC (a sample will help to draw it up correctly), the amount by which the Criminal Code was reduced can be recognized as income subject to tax.
This principle is true if the company does not return to the participants the cost of that part of the deposits, the amount of which was reduced by the authorized capital. Such income is classified as non-operating.
But, if the reduction process is carried out in accordance with Article No. 251 of the NKRF (17 subparagraph 1 of the paragraph), the taxation issue will be irrelevant.
In general, when initiating the procedure for reducing the authorized capital, tax consequences are possible for all LLC participants, including individuals. The bottom line is that members of the company in the event of a decrease in the share receive financial compensation, which is considered income subject to tax.
Moreover, this fact does not depend on the form in which the value of the reduced part of the participant’s share was returned - in cash or in kind. In turn, an LLC after paying income to members of the company is considered as a tax agent, as a result of which it becomes necessary to withhold and transfer the amount of personal income tax to the budget.
Summary
The process of changing the Criminal Code, in particular its reduction, under certain conditions is mandatory and requires attention, as well as competent design. In general, there should not be any special problems with its implementation. The main thing is not to forget about possible claims of creditors and features of the procedure while reducing the share of participants.