Such a business company as LLC from all other forms of legal entities allocates authorized capital, divided into shares of a certain size, each of which belongs to a particular participant. All provisions regarding the LLC members, their shares, rights and obligations are detailed in the Federal Law No. 14. However, this legislative act after reading nevertheless leaves some ambiguities. We will deal with them in this article.
About LLC members
A participant in a limited liability company can be any private or legal person, even far from entrepreneurial activity. In a limited manner, you can become a member or founder of an LLC:
- To public institutions - with the consent of the owner of the property they use.
- Representative local authorities - in exceptional cases.
- Organizations, if their constituent documents allow for the profit received outside the budget, to acquire a share in the LLC.
Unambiguously they cannot obtain the rights of a participant in an LLC, depending on the share distributed, municipal government bodies, state structures.
The legislation also establishes bans on the number of participants - there should not be more than 50 of them. If the composition exceeds at least one person, the LLC must be transformed into a PAO or a production cooperative. Otherwise, he faces liquidation by court order.
Founder and member
In some cases, an LLC may have one founder, which becomes its sole member. Here the rights of the LLC participant, depending on the share determined, do not make sense. The difference between the founder and the participant is established simply: the first is the creator of the LLC, the second is the member who is actively involved in the life of the company. Therefore, the latter concept will be somewhat wider and more extensive.
The differences also apply to the following:
- The founders quite naturally become LLC participants with rights and obligations belonging to the second. But in order for a participant to become a founder, it is necessary to re-register the company.
- The composition of the founders remains unchanged throughout the history of the LLC, and the set of participants tends to change periodically.
The founder of an LLC in the Russian Federation can be both a Russian citizen and a foreigner, both an individual and a company. Only the following categories of citizens are not entitled to play this role:
- military;
- those in the public service;
- State Duma deputies;
- persons working in legislative or executive authorities;
- members of the Federation Council.
The role of the founder is more important for society than the participant:
- Acceptance of the Charter of LLC.
- Preparation of constituent documentation.
- Contributing to the share capital.
- Appointment of governing bodies, audit group.
- How does the share of founders influence LLC management? They are responsible for the activities of society, as participants, in proportion to its size.
All rights of participants in a limited liability company
Note that the rights of participants are somewhat broader than the founders. At the same time, the charter of the LLC listed below is not authorized to be reduced, but only supplemented with new, other items. So, we list the basic rights of the participant:
- Business Management Ltd.
- Possession of complete reliable information about the activities of the organization.
- Free access to accounting and other documentation.
- Participation in the distribution of income received by LLC.
- The right to liquidation quota is the share of part of the property (or its equivalent in money), which will remain after all settlements with creditors.
- The right to withdraw from the membership at any time, regardless of the opinions of other members, while receiving their own share back.
- An opportunity to transfer or sell your share.
- Participation in general meetings, the right to elect and be elected to the management and control structures, as well as freely put their pressing issues on the agenda.
Obligations of members of a company
Of course, in addition to rights, depending on the share, the LLC participant is also burdened with the following obligations:
- Making a contribution to the authorized capital - the size, procedure, timing of contributions are determined by both the law and the charter of the LLC.
- Observance of trade secrets of LLC, non-disclosure of certain information about the company.
The articles of association may also prescribe additional obligations for participants if they are adopted unanimously at a general vote. Only such a certain member of the society can overwhelm such a burden - with his written consent and with the approval of 2/3 of the remaining members. When they alienate their share, these duties do not transfer to its new owner.
It should also be noted that the presence of additional duties does not lead to the appearance of exclusive rights. It is also possible to get rid of the additional burden by a general vote.
Change in the number of participants
When alienating their investments by one member, others have the priority right of the LLC participant (there is no dependence on the share) for its acquisition. But still, two more options are possible for changing the number of LLC members:
- Upon alienation of a share to a third party, a contract of sale is concluded. Both parties must be present on the transaction - becoming a former participant and a newly made one, as well as a notary. In addition, for the successful proceeding of the procedure, the consent of the spouses of the parties is necessary - if any.
- At the general meeting, the inclusion of a new member is approved. He makes a conditional contribution to the authorized capital, then he is transferred to the share of the old participant, who submits documents to the registration authority to leave the LLC.
We will also tell you about another procedure - how to arrange a participant to leave the LLC forcibly. Such measures are addressed in the following cases: a member of the company does not fulfill his duties in a systematic manner, interferes with the activities of the LLC. An exception can only be made through a court. Other participants are entitled to submit an application, provided that together they own at least 10% of the company's votes.
We now move more closely to the concept of "share".
On the share in the authorized capital
The authorized capital of an LLC is a certain set of nominal amounts of shares, i.e. contributions of each of its participants. The size of a share is usually expressed as a percentage or a fraction - it all depends on the ratio of its nominal value and the size of the total authorized capital. To some extent, it can be compared with a security in a PJSC, therefore, another name for the share is “uncertificated share”, since it also determines the right to be a member of the company. Each of the participants in the LLC can own only one share, whose size depends on its contribution to the authorized capital.
How do the rights of a participant change depending on the share? Any size of it brings to its owner those rights that we have listed three points earlier. The profit of its owner depends on the size of the share - it is distributed among the participants in proportion to the size of their contribution to the authorized capital. The size of the share also affects the weight of the vote at the general meeting - in proportion to the size of the investments and the votes are distributed.
Competent distribution of shares in the LLC is such a procedure in which each participant receives such a volume of profit that corresponds to his contribution to the general activity of the company. At the same time, it is important to ensure that there is not a big difference in the income of different members of the LLC.
Nominal and actual value of a share
A share in the authorized capital of an LLC is a property type of law, an analogue of a share in common property. It is designed to give its owner a certain amount of property and non-property rights in relation to this society.
Let's distinguish between two types of share value:
- Rated. An abstract monetary value expressing the value of a member’s contribution to the authorized capital directly during the creation of the organization; initial assessment of the participant’s investment.
- Valid. The cost today of that part of the net assets of the LLC, which is proportional to the share of a particular participant. This value also assesses the size of the company's obligations to its member. It is this cost that is paid to the participant when he leaves the LLC.
Legal nature of the share
The rights and obligations of the members of the company, the degree of control of the LLC depending on the share of participation are reflected in Art. 48 of the Civil Code of the Russian Federation. The presence of a contribution in the authorized capital gives the participant the following unconditional rights:
- Getting net profit of the company according to the size of its share.
- In case of voluntary withdrawal or forced exclusion from the list of participants, allocation to him of the actual value of his investment.
- Obtaining part of the ownership of the company during its liquidation - a share of the one that remains after all settlements with creditors.
- Management of LLC affairs, free receipt of information about its activities.
- Voluntary exit from society.
Sale and assignment of shares
Finally, let's talk about the sale and assignment of our share:
- The participant can sell, exchange, donate his share to another member of the LLC or several such persons. The consent of the latter is not required.
- Sale or assignment to a third party may be prohibited by the articles of association. Sometimes such a step requires his approval at the general meeting.
- When selling a share, LLC participants have a priority right to purchase it.
What is the best way to distribute roles in an LLC? In accordance with the shares, opportunities and desires of the participants themselves. When acquiring a share, they acquire inalienable rights and a number of duties, the last of which can be expanded. The share itself affects the size of the participant’s profit, as well as the weight of his vote at the meeting. The remaining rights are the same for owners of different shares.