The minimum authorized capital is a combination of all tangible assets, such as financial assets, equipment, facilities, securities and property rights. The authorized capital is necessary for the start of business and is formed from the investments of the organization. Its size is prescribed and fixed by the charter of the enterprise. However, sometimes in the life of business owners or the work of the enterprise itself, circumstances arise that force a change in the authorized capital of the LLC.
Tasks of Capital
The authorized capital of a limited liability company is a tool for the implementation of the three vital functions of the enterprise. These include:
- opportunity to start a business;
- providing guarantees;
- rights to participate in the work and management of the organization.
All these tasks can be decomposed into two components. One has a legal direction, and the other - economic. In order to distribute available funds as efficiently as possible, founders must understand the full value and essence of capital. They should develop an appropriate regulatory framework that will allow us to justify the feasibility of decisions made regarding the financial sector. Depending on the size of the authorized capital, the organization's capabilities are determined. For founders, this amount becomes the basis for the formation of economic policy. In business planning, the authorized capital of the LLC also plays a significant role. The sample, which is taken as the basis for further activities of the enterprise - this is the initial set of contributions of the founders.
Launch opportunity
This function refers to the possibility of business development. It is the down payment, which is regulated by law, that allows you to start work. According to state regulatory legal acts, the authorized capital gives a person who wants to start a business the right to realize this desire. Material values are the basis for the start and further progressive activities.
Constant changes in legislation have led to the fact that the financial threshold for opening one's own enterprise has been significantly reduced. The authorized capital is still an inviolable reserve, which serves as a starting point for building partnerships and establishing commercial relations.
Warranty
This set of material assets is a kind of guarantee. That is, when concluding any agreements, it is the authorized capital that is the very collateral amount. By the way, profits made on its basis do not have such power. Profit can be divided, which can not be said about the starting amount. Until all debt obligations are paid off, not one of the founders has the right to withdraw his share from the total mass. Such a function of authorized capital is also prescribed by law.
The right to participate in the work and management of the organization
Of course, if a person has invested his personal funds in the development of a project, then he has the right to receive a part of the earnings. Income, as a rule, is proportional to the share of material assets registered in capital. The legislation regulates the distribution of income depending on the number of votes.The latter are determined by the amount of invested funds. The founders also have the right to manage and distribute the revenue side of the fund.
The reasons for the increase in authorized capital
Changing the authorized capital of an LLC is a fairly common procedure. Many are provoked by the minimum compulsory contribution, which amounts to ten thousand rubles. Unwillingness to be limited to this amount leads the founders to this action.
The increase in share capital is due to various reasons. One of the most common is the banal replenishment of assets. However, there are other factors that influence this decision. For example, when a new member is admitted to the organizers, he must contribute his share to the total aggregate of material resources. This affects the fact that you need to carry out the procedure for increasing.
Another reason is participation in all kinds of tenders and tenders, where the mandatory condition for admission may be the amount of the authorized capital in excess of the established minimum threshold.
Various entities may also require this procedure. These can be both lenders and the founders themselves. This is due to one of the functions of capital - providing guarantees. That is, a large amount gives an increased degree of reliability and compliance with their interests.
A factor affecting the decision of the LLC to change the authorized capital may be a change in the direction of activity. In the event that the new task provides, according to the law, another minimum fund, then this procedure takes place. An example of such a reason is the opening of a license for the production of alcohol or insurance activities.
Ways to increase
Thanks to additional investments, changes are made to the charter of the LLC. An increase in the authorized capital can occur at the expense of various sources.
The first way to replenish the fund may be additional financial contributions. They are formed at the expense of the founders. This action, as a rule, is pre-negotiated at a round table. It also discusses the time frame within which each investor is required to do so. However, if such a proposal does not suit all the founders, then it is possible to organize this procedure due to the investments of individual participants. It can be one person, and a certain percentage of founders. But in this case, an increase in warranty obligations and rights will affect only those who have contributed additional funds.
The influx of finances and an increase in authorized capital occurs simultaneously with the adoption of new members in the organization. This moment is pre-agreed by the meeting.
Fund expansion is possible due to reinvestment. That is, at the request of the founders, you can not divide the profit, but invest, thereby increasing the authorized capital. Undistributed finances are formed due to dividends that have arisen as a result of the commercial activity of the enterprise.
The procedure for increasing the authorized capital
The change in the authorized capital of an LLC takes place in several stages. They are the following items:
- Convening a meeting. At this stage, all founders must decide that the fund will undergo changes. In order to implement this procedure, the consent of half of the investors is necessary.
- Documentary evidence of new entries. This stage is characterized by state consolidation of changes.
- The introduction of additional tangible property on the balance sheet of the enterprise. At this stage, the actual implementation of the plan occurs. Participants must replenish the fund with their own funds.
Documenting
Preparation of the relevant securities is one of the conditions allowing for a change in the authorized capital of the LLC. What documents are needed for this action? The package of papers should include:
- The charter of the enterprise, in which the changes will be made.
- An extract confirming the passage of state registration (issued by the Unified State Register).
- Information confirmation of how, after the introduction of changes, shares, guarantees and rights will be distributed between the founders.
Upon successful completion of the fund change procedure, the founders will receive two documents. The first is the charter, which has been edited, and the second is an extract testifying to the increase made.
State registration
Changing the charter capital of an LLC is impossible without state registration. It is quite important, as it legally consolidates the implementation of this action. In order to consolidate your desire in accordance with the law, it is necessary to go through the state registration procedure with a notary. To do this, he must be provided with a package of documents, which includes some papers. Information confirmation of the adoption of this decision is expressed as a protocol of the meeting. It demonstrates the wish of the founders to register. In order to decide on what to record innovations, a notary public requires an enterprise charter. In the event that the director is not responsible for this action, then a power of attorney must be drawn up for a person authorized by such rights. The registrar will also ask you to fill out an application for this procedure. Be sure to accompany this item payment of the administrative fee. The paper confirming the payment of money for state registration should also be included in the package of documents.
After all the papers have been provided, the notary performs registration. The procedure usually takes about a day. After that, the founders can contribute additional funds. The time period within which they undertake to do this is not established by law. The time frame is determined by the council itself, and is regulated only by regulatory documents of the enterprise itself.
Reasons for the decrease
Reducing the share capital is a more complex procedure, which can be caused by various factors. Since the formation of the fund should occur within the first year from the date of registration of a limited liability company, failure to fulfill this condition leads to the following consequences:
- enterprise closure;
- exclusion from the meeting of those founders who have not fulfilled this obligation;
- making decisions on reducing the size of the fund and redistributing shares between investors.
Forced procedure
The choice of any of the above items depends on which verdict the assembly will issue. In some cases, a decrease in the authorized capital may be initiated not only by the participants themselves, but also be mandatory for the procedure. This occurs in the following cases:
- non-replenishment of the fund balance in full during the year from the moment of formation of the organization;
- the discrepancy between the size of the value of net assets relative to the number stated in the charter (this is fixed at the end of the second financial year and subsequent years, and to avoid such a moment, additional funds must be paid);
- purchase of a share from the fund by an organization that was not transferred or acquired by third parties during the year.
Consequences of reducing
Amendments to the authorized capital of LLC in the direction of reduction is carried out using a similar increase in the procedure. It also requires confirmation of the decision on the desire for innovation in the form of a protocol. Next is the state registration procedure, which amends the charter. However, unlike an increase, this action is fraught with some consequences.
The company should coordinate such actions with creditors. After all, this leads to a decrease in guarantees.If the borrower has an objection, then the procedure is not carried out. The organization shall notify creditors if registration of the reduction has been made. They have the right to early termination of relations with the enterprise and may demand a refund.
The decision to reduce takes effect only after three months. That is, only after this period, the founders can take back their share invested in the formation of the fund.