A limited liability company is one of the most common forms of doing business. It is attractive in that it practically does not contain property risks for the members of the company.
What is considered a limited liability company
In world practice, limited liability companies (LLC) include an enterprise, the authorized capital of which is divided into shares owned by its participants. They are not responsible for the obligations of the LLC, and the company, in turn, is not responsible for the debts of the participants. However, if the activities of the LLC will only bring losses, all participants risk their contributions.
A society can be created by legal entities and individuals, regardless of their country of registration or residence. At the same time, there can be only one participant in an LLC. In the legislation of a number of countries, there are restrictions on the maximum number of participants in a company. For example, in the Russian Federation, the number of participants in an LLC cannot exceed 50 people. Otherwise, such an enterprise will inevitably be reorganized into a different organizational and legal form.
Member or founder
The founders of a limited liability company are the enterprises or citizens who created it. They are the ones who draw up and sign the first documents required for the creation of an LLC: the decision and the agreement on the establishment of the company. They contain the will of the founders on all necessary organizational issues.
Unlike other participants, at first the founders of an LLC have the right to conclude contracts and perform other actions necessary for its creation. They are also jointly and severally liable for obligations related to the establishment of the company and arising before its state registration.
After registering an LLC, its founders automatically become members. Therefore, the charter of the company does not already mention the founders, but the participants. They receive all rights and obligations within the limits established by the legislation and the charter of the enterprise.
Participants are also considered to be those legal entities and individuals who are part of the company already in the course of its activities. It is possible to become a member of an LLC in various ways. You can be accepted into the society by contributing your share to the authorized capital. A new participant can acquire a share, as well as a part of it, from one of the other participants or from the company itself. Finally, the share of the LLC participant can be inherited. In any case, when a new participant joins the company, it is necessary to make the appropriate changes to the charter.
During the period of activity of an LLC, all its founders sooner or later have the right to withdraw from it, while the presence of at least one participant in the company is mandatory.
