Limited Liability Company (LLC) is a fairly profitable and popular way to organize a business. This type of firm is widespread not only in Russia. In different countries, the legislation on this issue varies greatly.
At the moment, LLC is the most universal form of business organization, which is why the founders most often give preference to this particular type of business. A limited liability company can be merged into another business, a part of it can be separated out as a new separate organization, and it can be transferred to the status of a joint stock company. The LLC registration procedure is also relatively simple.
Legislation on LLC issues
The laws of the Russian Federation allow a limited liability company to have up to 50 founders. These can be both citizens of the Russian Federation and persons from other countries, as well as legal entities - Russian or foreign. An LLC can be founded by one participant, if it is not another business company with a single founder. State authorities and local self-government bodies cannot be founders of this form of business.
If the number of participants is more than 50 people, within a year the LLC should be transformed into a production cooperative or a joint-stock company, or the number of founders should be reduced. If these actions are not performed on time, after the expiration of a calendar year, the Company is subject to liquidation in court. In such a case, the liquidation of an LLC has the right to demand local and state government bodies, the prosecutor's office, and the Federal Tax Service Inspectorate.
Management of a large LLC
The large number of participants implies certain difficulties associated with making key decisions. The founders have the right to organize a special governing body that provides supervision of business processes and management of the company. Continuous control of activities is achieved through the creation of the Board of Directors, management is entrusted to a collegial or sole executive body (management board, director). If the number of members of the LLC exceeds 15 people, it is recommended to create an audit commission to supervise the managing and executive bodies, as well as control over financial and economic activities.
In Russia, 80% of companies when registering choose the LLC form, since, unlike individual entrepreneurship, with this form of management they risk not their property, but only their shares in the authorized capital. At the same time, the capital itself starts from 10,000 rubles, and for a start it is enough to deposit only half of the amount, repaying the rest within a year.
