Everything About LLC As A Legal Entity

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Everything About LLC As A Legal Entity
Everything About LLC As A Legal Entity

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There are most of all legal entities registered as limited liability companies in Russia - due to its peculiarities, this form of organization is popular. And no wonder.

Everything about LLC as a legal entity
Everything about LLC as a legal entity

LLC, its bonuses and restrictions

Limited Liability Company, LLC is a commercial organization established by a group of persons on the basis of their equity participation in the authorized capital. The main advantage of such a legal entity for its founders is described in its very name: the financial responsibility of each of the participants is limited by its initial share in the authorized capital, and they are not responsible for the obligations of the company itself.

Citizens of Russia, foreigners and other legal entities can act as the founder of an LLC, while, according to the law, restrictions are imposed on state-owned companies, military personnel and civil servants. The name of the company must contain the name of its form - for example, "Limited Liability Company" Prizma ", in a short form of entry it is allowed to use the abbreviation LLC. For each limited liability company, it is mandatory to use a round seal with the full name of the company and its details.

An LLC can engage in any type of activity within the framework of the current legislation, the only limitation is that to perform some work, it will be required to obtain a license (as a rule, for an unlimited period). The distribution of profits among the founders of the LLC occurs by a decision of the general meeting once a quarter, six months or a year. The net profit for the past period is distributed, the share of each of the founders is calculated in proportion to his share in the authorized capital. Theoretically, it is also possible that a different principle of profit distribution is spelled out in the charter of an LLC - for this, such a decision must be unanimously recognized by all votes of the general meeting of participants.

One of the most serious restrictions is that the total number of founders prescribed in the charter of the organization for a limited liability company should not exceed fifty people. If the number of participants exceeds this figure, the organization will have to change its form from LLC to OJSC or CJSC within a year. On the other hand, both one person and one legal entity can act as a participant in an LLC - the only exception will be another legal entity with a single founder, this option is prohibited by law.

LLC Charter

The charter is the main constituent document that defines the activities of a limited liability company. It contains the name of the company (full and abbreviated), legal address, information on the amount of the authorized capital and the shares of the founders, the principles for the withdrawal of participants from the LLC, the procedure for distributing profits and much more. All other documentation, including agreements between founders, is of an auxiliary nature.

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