Many novice businessmen are interested in the question of how LLC differs from CJSC. These legal forms of commercial property are most often found in entrepreneurial practice. Those who are going to start their own business in the field of small or medium-sized businesses should be able to distinguish between these concepts.
Key differences
Even experienced entrepreneurs can not always immediately determine the form of ownership. And they are not always able to advise others that it is better - CJSC or LLC. The differences lie in such criteria as the peculiarity of creating the authorized capital and its size, the number of founders, contributions and much more.
What is OJSC?
Also, this form of organizational structure for the future business is often chosen. What is the difference between LLC, OJSC, and ZAO?
So, a limited liability company is the most attractive option, the most suitable for small and medium enterprises. It can include a maximum of 50 people, and the founders can be both individuals and legal entities.
But OJSC is a more complex form, it has many nuances that can be both acceptable and negative for the owner. The key difference from LLC is that the authorized capital is not divided into shares of its participants, but into shares. Also in this form there are no restrictions on the number of persons who may be owners.
Concept of CJSC
This form of ownership is a commercial structure where the authorized capital depends on the agreed number of shares. They are distributed between the founders and other persons, but can not be sold on exchanges.
Before you find out how LLC differs from a closed company, you need to know all the features of the latter form:
- cannot exclude a shareholder;
- for registration, you do not need to pay the authorized capital;
- there is a right to free disposal of shares;
- for the purpose of decision making, a unanimous decision of all participants is not required
- shareholders do not need to contribute finance to the property of the structure;
- in order to create authorized capital, state registration of the issue of securities is required;
- when paid by non-monetary means, the services of an appraiser from the outside are needed;
- new members may appear;
- the need for mandatory regular reporting on the activities of the structure.
LLC: advantages and disadvantages
You need to know the key features of this form of ownership. This will help to better understand how LLC differs from ZAO. What is the difference between them and you will figure it out yourself by examining the main advantages of this type of organization.
Everything here is much simpler in terms of registration and subsequent work, in particular:
- the state registration procedure is very simple, there is no need to record information about securities, as in the previous case;
- if the capital is formed at the expense of non-monetary funds, an independent appraiser is not required, all work is carried out by the founders themselves, but only if their equivalent does not exceed 20,000 rubles;
- the participant can always leave the structure;
- acceptance of new and alienation of old participants is limited according to the Charter of the company;
- data on the activities of the company, in contrast to the company, do not need to be disclosed.
The disadvantages of the simplest form
As you can see, the main answer to the question "What is the difference between LLC and CJSC?" - This is the simplicity of doing business at first sight. However, a limited liability company has its drawbacks, despite the huge number of advantages for owners of small commercial structures:
- in order to implement the state registration procedure, at least half of the authorized capital must be paid. It is paid only in cash, and participants must open temporary accounts before this;
- To change the composition of an LLC, a very long and complicated procedure is required, including changes to the USRLE and registration of an alienation through a notary public;
- when at least one participant leaves, the structure may lose property;
- in order to make this or that decision, unanimous confirmation of all participants is required.
Based on this, you can probably decide on a dilemma which type of property to prefer. Next, choose for yourself: LLC or CJSC.
OJSC: main differences
When registering such a form of ownership, it is not required to indicate the personal data of the founders. But when registering an LLC, this is a mandatory procedure.
If the structure of the company will provide for an unlimited number of participants, then you should choose exactly OJSC. And even if there are pre-emptive redemption rights for securities, you can give them or transfer them to relatives by inheritance.
Other distinguishing features of this structure are as follows:
- the inability to expel a participant from society through the court;
- when making important decisions, votes are counted not by the number of shareholders, but by shares;
- the company's capital is divided into shares;
- authorized capital must be at least 100 thousand rubles;
- the need to undergo an annual audit.
How to make the right choice?
Before starting your own business, you should carefully study the features of each form of entrepreneurship. So you will find out how LLC differs from CJSC and OJSC. The latter option is the most difficult, and is suitable for those enterprises that plan to enlist the support of large investors and have large-scale plans. But if we are talking about a small friendly or family business, then it is better to choose LLC, because it is much easier.
Visual Comparison
Above, we figured out what the features of OAO are. And below we will clearly understand how LLC differs from ZAO due to a brief description.
Depending on the characteristics of the activity, the characteristics are as follows:
- The authorized capital in LLC is the contributions of its members, in the company - for shares, its maximum size in both cases is ten thousand rubles.
- In two cases, capital is paid in the form of securities, money or other property that can be valued. But in LLC for the purpose of registration you need to pay at least half of its value, and the rest during the year. And the company needs to deposit at least 50 percent of the shares distributed during the creation of the structure within three months. The rest is paid in stages. And from the moment of registration, a package of documents should be submitted within a month in order to obtain permission to issue shares.
- If the LLC capital is paid in money, then the founder needs to open a special savings bank account and deposit funds into this account.
- In a CJSC, unlike an LLC, one can increase the authorized capital by increasing the nominal value of shares and attracting new ones.
Rights of structure members
The form of ownership of a commercial organization directly affects what rights its founders and owners have. In a little different LLC from ZAO. What is the difference and list below:
- A limited liability company may have a maximum of 50 members, and in a Closed Joint-Stock Company the same figure means not only the number of persons, but also shareholders. If there are more of them, then it is necessary to reorganize into an OJSC within 12 months.
- In the first case, participants can leave the structure of members of the structure of their own free will, and in the second they do not have this right.
- If we are talking about the alienation of a share (LLC) or stock (CJSC), then in the first structure, participants have the right to this, transferring it to third parties, if this does not contradict the Charter. Other participants or the society itself do not participate in the discussion of this issue. In a CJSC, shareholders also have this right, and the consent of others is also not required.
- All decisions are made in both structures based on the general meeting of participants or shareholders of the company.
- In a CJSC, shareholders are not entitled to make contributions to the property of the company, and in the LLC, contributions must be made by all participants depending on their share according to the authorized capital.
- As for the payment of dividends and profits of the company, in LLC it is divided between the participants depending on a particular share, which is provided for each according to the authorized capital. And in the second structure, dividends are paid to shareholders on their securities of one type or another. Payments can be made in cash or in other equivalents.
You can certainly say that the CJSC and LLC are somewhat reminiscent of each other, but differ from the OJSC. Both organizational forms of business are able to guarantee the limited liability of their organizers depending on their obligations. Their differences lie in the management structure and are not so significant.