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Video: Creation of limited liability companies, features of their functioning
2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:43
A Limited Liability Company (LLC) is a company founded by one or more individuals (legal entities) for the purpose of generating commercial income. The financial basis of any LLC is the equity participation of co-founders on equal share terms or in accordance with a general agreement drawn up as a constituent document.
The register of owners, according to which the profits / losses of each of the participants in limited liability companies are calculated, is a kind of "constitution" of the company. The content of the document is considered a trade secret. Moreover, it is characteristic that the amount of potential losses is commensurate with the amount of equity participation and cannot exceed the financial equivalent of the market value of shares. For example, one of the shareholders owns 35% of the shares. Accordingly, its share in profit/loss also does not exceed 35% of the volumecompany capitalization.
How is this company different?
The limited liability company has a constituent fund in the amount of more than 100 minimum wages. The charter of an LLC establishes procedural issues and rules for the formation of the structure of the company, management of shares, distribution of profits and liability for payments in the event of force majeure, bankruptcy. A separate document establishes the principles of conducting financial and economic activities and behavior in the market. Registration of limited liability companies is carried out within approximately 10 days. Then the management of the company is given copies of the registration certificate, the Charter and an extract from the Unified State Register of Legal Entities.
Statutory rights and obligations
The founders of limited liability companies do not bear any personal responsibility for the activities of the LLC. In other words, they can be its founders, but not its leaders. In addition, even if we are talking about liability, it follows from the fact of ownership of shares, that is, force majeure can only lead to the redistribution of assets and equity participation in the business.
The statutory fund of limited liability companies is formed both through financial injections and technical investments. Thus, they can be created only on the basis of attracting industrial and other funds that are not directly related to the solution of financial issues. Althoughyou still have to raise working capital, funds for the purchase of licenses, etc.
It is of fundamental importance that if any of the limited liability companies does not make a profit, then contributions to the Pension Fund are temporarily suspended.
Among the disadvantages is that a shareholder can leave the company at any time. At the same time, he is en titled to a compensation payment in the amount of his equity participation in the statutory fund. Often, such cases lead to the forced closure of small LLCs, which requires additional costs - the bankruptcy procedure is quite confusing and bureaucratically complicated. We must not forget about the close attention from the state regulatory authorities. At the very least, financial and tax monitoring of LLC activities is quite scrupulous and unpleasant for young companies.
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