In modern conditions, the authorized capital is one of the most important indicators that determine future partners, investors, who, through this value, evaluate for themselves the opportunity to have business relations with this company.
This concept is a combination of funds or property that the founders invested when organizing a company in the form of a limited liability company (LLC).
LLC participants have the right to work in this society. The contribution of each of them is recorded in the constituent documents and is a guarantee of the full economic activity of the company.
In general, the authorized capital of the LLC and its size reflect the solvency of the company. He also protects the participants of this company and fixes the interest of creditors.
The concept
The share in the authorized capital of LLC of each member may be different. It is the initial contribution made by the founders of the company during registration and pooling of funds.
In our country, to complete the procedure for registering a company, it is enough to have a minimum authorized capital of LLC in the amount of 10,000 rubles. This is a fairly small amount that any entrepreneur can afford. The minimum authorized capital of LLC is legislatively fixed in the relevant document. Over time, this amount may vary, but only in a big way.
The need to make the authorized capital of the LLC (a sample certificate of payment is presented below) is due to the following provisions:
- you need to start a company based on legislation;
- authorized capital gives creditors guarantees that obligations to them by the company will be met;
- set the percentage of each of the founders, as well as the number of votes of each of them, which can be taken into account in the process of making management decisions.
Equity Functions
The main functions of the authorized capital are as follows:
- Material security of the company with start-up capital, without which the functioning of society is impossible. Being the most stable element of liabilities, it provides the initial capital for the start of the company. The exact total amount of contributions depends on the type of activity that the organization will conduct. It is the basis for the further functioning of the company.
- Warranty or insurance function. The size of property owned by the founders may not be lower than the amount of the authorized capital indicated in the documents.
- Distribution. The creation of the authorized capital establishes the shares of participants, according to which everyone has a certain number of votes when making decisions, as well as the right to receive a certain share of the organization’s profit at the end of the year.
The composition of the authorized capital
The authorized capital consists of the following elements: cash (cash, non-cash), securities, property rights.
Payment by the participants of their shares is indicated in the documents when the company was established, as well as the period of payment. This period was previously one year, now reduced to four months. In case of violation of this period, the unpaid part of the capital will be transferred to other participants. There is a more favorable option. In case of delayed payment, the participant pays a fine, which is set in advance.
Creation of the authorized capital of LLC
Information on the size of the authorized capital is recorded in the main document of the LLC - the Charter. The authorized capital is a fund formed at the time of registration of the enterprise. It consists of the cost of a portion of each of the founders.
The maximum size of the share of participants, the procedure for changing the size of contributions in the organization is regulated personally, and the information is added to the main document of the company.
Before applying for the opening of a company, half of the future share capital must be placed in a savings account or accepted at the cash desk of the company. After registration documents, this amount will be transferred to the bank account of the company.
In the event that one of the founders did not make a timely payment, fines may apply to him, if this is provided for by the Charter of the company. Part of the unpaid shares may be alienated in favor of the LLC and distributed among the remaining founders of the company.
The company can use these funds for its own purposes:
- pay wages;
- pay rent of premises;
- other needs.
The full formation of the authorized capital can be confirmed by payment documents of the enterprise. It must be carried out in strict accordance with the law.
The contribution can be made in various ways:
- cash;
- money transaction;
- securities;
- property option.
It should be borne in mind that if the authorized capital is formed, say, by property, then in this situation an independent appraiser is involved to determine the value thereof.
Many founders choose simple methods of depositing their shares: cash and cashless funds.
The most unfortunate option is to introduce a share through the property (right to use, etc.). The disadvantage of this method is that rights can be challenged and questioned.
Size increase
The most common reasons for the increase in authorized capital are:
- Forced enterprise licensing. Some industries require special operating permits, including licenses. The transformation of the company leads to a change in status and an increase in investment. An example would be private security agencies, in which the minimum authorized capital should be at least 100,000 rubles.
- The emergence of new shareholders. This practice is quite common and has no limitations.
- The emergence of a need for working capital growth.
Downsizing
In contrast to the increase in authorized capital, its reduction is a rather complicated process. According to the law, it occurs in several stages.
In case of voluntary reduction of the authorized capital, LLC returns the invested funds to the participants in accordance with their shares. Reduction is possible not only in monetary terms, but also in property.
The cost of capital after the procedure cannot be less than 10,000 rubles. The decision to reduce it is taken at the general meeting, which must be attended by a notary.
When liquidating a company
When closing a business, management needs to remember that this is a long multi-step process that takes a lot of time. It is important to do everything right in order to avoid fines. The reduction of the authorized capital during the liquidation of an LLC may be voluntary and mandatory.
First, a meeting of the founders is held with the adoption of an appropriate decision and the creation of a commission.
This is followed by publication in the media and calculation of the amount of debt. And only after settling issues with creditors and drawing up a liquidation balance, the remaining funds in the authorized capital are distributed among the shareholders.
In the event of conflicts arising from the division of property, the subject of the dispute is sold at auction, and the profit received is distributed among the participants depending on their share. Forced liquidation of the company occurs in the event of a non-profitable business or a long absence of activity of the company.
Value calculation
The system by which participants ’property can be properly valued was adopted two years ago.
Previously, this procedure was carried out with violations, because it passed without the necessary verification. Now you can evaluate any property only with the involvement of an independent expert. It is also recommended that the authorized capital be paid on time. In recent years, the evaluation and calculation process has been greatly simplified, and the time has been reduced from a year to four months from the date of registration of the company.
Share capital in 2018
The minimum authorized capital of LLC in 2018 has not changed and amounts to 10,000 rubles.
There are some important points:
- payment of shares and contributions of the founders is made in person;
- the increase can be made at the expense of financial resources, property or other assets;
- A change in the authorized capital is possible only with the participation of a notary.
Conclusion
The actual situation, namely a completely formal approach to the authorized capital for the LLC, does not suit many potential partners of the company. That is why proposals are increasingly being made to increase its minimum size. The amounts sound different, but at the moment, everything is still at the stage of conversation. It should be noted that the application of this measure will reduce the number of one-day companies.