Composition of the Company's participants with limited liability, their rights and obligations are recorded in Federal law No. 14-FZ “On Limited Liability Companies”, but the strict wording of the law is not clear to everyone. Therefore, it is worth talking in more detail about who they are - the LLC participants and what exactly they are entitled to.
LLC participants
According to the law, LLC participants can be both legal and individuals. However, it is not necessary that they engage in entrepreneurial activity. But the law reserves the right to regulate the participation of certain categories of citizens in LLCs. Namely:
- government institutions can be participants in an LLC, but only if the owner of their property (the municipality) agrees with this
- Representative bodies of municipalities may, in exceptional cases, establish intermunicipal business companies in the form of Limited Liability Companies
- various institutions can acquire shares in the income that they received outside the estimate, but only if the constituent documents of the organizations give them such a right
As for local governments or other government agencies, then they cannot be members of the LLC.
In addition, the Society can be founded by one single person, who can then become its, again, its only participant. But at the same time, the only participant cannot be a legal entity that also has one participant.
Maximum number of participants
The maximum number of participants in an LLC cannot be more than fifty. Otherwise (even if there are 51 participants), the limited liability company must transform within the next year either into a production cooperative or into an open joint-stock company. Well, if this does not happen or if the number of LLC participants does not decrease to fifty, the Company is subject to liquidation by law. judicial procedure. And the initiator of judicial proceedings can be both registration authorities (FTS) and local government bodies.
Founder or participant?
Many people confuse the concepts of “participant” and “founder”. They are indeed similar in meaning, but still, they are different things. To answer the question of how a founder differs from a participant, let’s define these concepts.
The founder is the one who decides to create (establishes) the organization, and the participant is the one who actively participates in the life and work of the organization throughout its existence. Therefore, the concept of “participant” is broader and more general.
As a rule, founders always become members of an LLC, but participants can become founders only upon re-registration of the company. In addition, the composition of the founders usually does not change (changes occur only when companies are re-registered), but the composition of the LLC participants can change many times.
The founders accept the company's Charter, prepare constituent documents, contribute their share to the authorized capital of the LLC, appoint an audit group and management bodies, have voting rights and are responsible for the company's activities depending on the size of their share in authorized capital.
Who can become a founder?
According to the law, the founders of an LLC can be citizens Russian Federation, so Foreign citizens, individuals or legal entities. But those who are on public service, military personnel, deputies State Duma, officials of legislative or executive authorities and members of the Federation Council cannot act as founders of a Limited Liability Company.
Legal rights of an LLC participant
As for the rights of LLC participants, they are much broader than those of the founders and extend to the following directions activities:
- participation in the management of the Company's affairs
- receiving complete information about the activities of the Company
- access to accounting and other documents
- participation in the distribution of profits received by the Company
- exercise of the right to a liquidation quota (this means the opportunity to receive the monetary or property equivalent of part of the Company’s property that remains after settlements with creditors)
- the opportunity to leave the Company at any time and receive a share of the property, regardless of the opinions of other participants
- the opportunity to sell or assign your share (or part of the share) in the authorized capital of the Company
- the opportunity to participate in general meetings, elect and be elected to control and management bodies, put your issues on the agenda
These rights of LLC participants are fundamental, therefore it is impossible to reduce this list or limit it, for example, by the Company Charter. But you can increase and transfer additional rights to participants.
Additional rights
This is usually done through articles of incorporation that stipulate special terms.
It is worth noting that additional rights differ in that they relate not to ownership shares in the capital, but personally to the participants of the Company, which means that even if the participant’s share is transferred to another person (or legal entity), the participant has all additional rights remain equally and do not pass to the new owner of the share. In addition, additional rights may not be granted to all participants, but only to some. Because of this right different participants of one LLC may differ significantly in volume.
This situation is quite legitimate and can serve the issues of flexible regulation in domestic policy Limited liability companies, but since some of the participants will initially have certain privileges, ordinary participants may experience negative reaction. If any of the new participants decide to claim additional rights, their claims can be considered at a general meeting, which has the right to grant privileges to members of the Company, then only if all participants vote unanimously.
But in addition to granting a participant additional rights, the general meeting can also deprive or limit the rights of all LLC participants. In this case, the decision must be made unanimously. As for the restriction or termination of additional rights that were granted to a certain participant, this can only be done with the consent (written or oral) of the participant himself and if 2/3 voted for the abolition or restriction of rights total number LLC participants.
Responsibilities of LLC participants
As usual, in addition to rights, LLC participants also have responsibilities, including:
- making contributions to the authorized capital (the amount of contributions, the procedure for making them and the terms within which the contribution must be made are determined by existing legislation and constituent documents Society)
- compliance with trade secrets and non-disclosure of classified information about the work of the LLC
These are the main responsibilities and they do not require personal entrepreneurial activity. But the Charter or other constituent documents can provide for additional responsibilities. By decision general meeting they can be assigned to all participants (subject to unanimous voting) or to a specific participant, subject to his consent (written or oral, which can be expressed in a vote) and if 2/3 of all LLC participants vote for additional duties.
Regarding additional responsibilities, the following can also be said: their essence is determined by the constituent documents of the Company, and the responsibilities themselves relate to personal participation in the work of the Company or the provision of some services to the Company. These responsibilities are personalized and upon alienation (sale, transfer, inheritance) of the share or part thereof do not pass to the acquirer.
Another important point, which concerns additional responsibilities, is that the vesting of a participant with them does not entail the acquisition of additional rights, and such responsibilities can be gotten rid of by decision of the general meeting, subject to unanimous voting.
Changes in the composition of the Company's participants
When a company is founded and registered, rarely does anyone think about the fact that after some time he may sell, transfer his share, or even leave the Company. But over time, the situation may change, which means a change of LLC participants will follow. How does this happen? Today, there are two options that are associated with the transfer or alienation of a participant’s share in the authorized capital (by the way, existing participants have the right of priority to repurchase a share or part thereof from someone who wants to sell it):
- When selling a share to a stranger, which is not a member of the LLC, a purchase and sale agreement is drawn up, which is certified by a notary. He also submits documents for changing the participant to the registration authority. But in in this case It requires not only the simultaneous presence of both parties during the transaction, but also the consent of the spouses of the parties (if any).
- Appears in Society new member, which increases the authorized capital by some conditional amount. His arrival is formalized by a decision of the general meeting, then documents for registering changes in the composition of participants are submitted to the Federal Tax Service, and only then papers are prepared for the transfer of the share of the old participant to the new one and for the participant’s exit from the LLC. This option of changing participants takes more time, since all documents are completed in stages, but it is much cheaper and does not require notarial contracts purchase and sale.
Expulsion of a participant from the LLC
In addition, there is another situation when changes in the composition of the Company’s participants are inevitable - the forced exclusion of a participant from the LLC. Such a measure can be applied to someone who systematically fails to fulfill his duties (does not contribute his share to the authorized capital, does not participate in general meetings, does not perform additional duties) or, through certain actions, prevents the Company from working normally and achieving the necessary results.
An exception is possible only through the court, and other members of the Company can apply to the court, but provided that they collectively own no less than 10% of the LLC’s votes.
If such an application is filed, the court will be obliged to consider it. However, if during the trial the culprit ceases to be a member of the Company (he can sell his share or transfer it), the lawsuit will be denied.
LLC participants, their number
A limited liability company is a legal entity formed by individuals or legal entities and having a certain structure. LLC forms capital and operates on the basis constituent documentation and civil law norms.
Members of this community are not required to bear any obligations, and the risk of loss is associated only with the activities of the organization.
The activities of the LLC are managed by a structured system of bodies formed on the basis of laws:
- The meeting of community members is the main, mandatory body that must be present in every limited liability company. The competence of the meeting is determined by the norms of the Charter and the provisions of the law.
- Supervisory body or board of directors: There are no legal requirements that oblige the formation of such a body in an LLC. The duties and rights are vested in the board of directors in accordance with the provisions of the Articles of Association.
- Collegial and executive bodies are formed in accordance with the rules of law and are created to exercise current control. A collegial body is not mandatory, a sole body is formed without fail. Exception: situations where the functional load of a single body is not transferred to the organization - in this case, it is not required.
- The Audit Commission is a body formed to exercise control over the activities of legal entity, fulfilling the duties set out in the Charter. It is formed without fail if the legal entity has 15 or more participants.
LLC participants can be:
- Public legal entities.
- Legal entities.
- Individuals.
An organization consisting of one participant is allowed to function. According to legal regulations, the maximum number of participants is 50 people.
If the number of participants increases above 50 people, according to the norms, the LLC is obliged to transform into a joint stock company within 1 year. Minimal amount no persons identified.
The concept of the maximum number of participants
The maximum number of community members is distinguishing feature LLC, provided for by civil law. Such an organization has a simple structure of governing bodies, which distinguishes LLC from joint stock company.
A special management system for a joint stock company is necessary due to the significant number of participants who form the capital of the legal entity with their contributions. This is not typical for an LLC, so the existence of a complex management system does not make sense.
According to the norms of civil law, an LLC may have one participant - such a legal entity is called a “single participant company” or “one person company.”
The law provides for a maximum number of participants in an LLC - 50 people. Within a year, an LLC with more than 50 people must transform into a joint stock company.
If after a year the LLC is not transformed into a joint-stock company, the legal entity is liquidated according to a court decision. An appeal to the court can be filed by any body that has such powers.
An LLC can be formed by individuals and legal entities, public legal entities.
Features and concept of a one-person company
The formation of an LLC consisting of one participant, or a “one-person company,” is permitted by law. An LLC of one person is formed by establishing it by a single person, or by purchasing all shares of the organization by one person.
The features of a one-person LLC are:
- All issues regarding the company’s activities, capital formation, terms of payment of capital, cost of the share are resolved by one participant.
- The sole participant cannot leave the LLC.
- If the LLC is formed or operates with one member, in the event of collection of a debt on a share, the creditor cannot collect the debt under the rules that require payment of the amount of the actual value of the share.
- Issues that are within the competence of the general meeting of participants, in this case, are resolved by one person who has a number of rights and obligations, according to the Charter.
Article 66 of the Civil Code states that the sole participant cannot be another company that also has one participant.
Certain categories of persons who are prohibited or limited from participating in business partnerships or companies
Individuals and legal entities can form and participate in the activities of an LLC. There are legal provisions that limit the rights of certain persons to participate in LLC activities or prohibit participation.
The law limits the right of a person owning shares, shares, or securities to participate in the activities of an LLC if this may cause a conflict of interest.
Restrictions also apply to participation of budgetary organizations in LLCs.
If an LLC is created and operates with one participant, it cannot be another company also consisting of one participant.
Organizational and legal forms are created and managed by individuals and legal entities. At first glance, the differences between participants and founders are of a purely formal nature and relate to procedural issues. However, a detailed consideration of the issue allows us to establish a significant difference between the categories, which affects various aspects activities of a business entity.
Definition
Participant– an individual or legal entity that has a share in the authorized capital of a limited liability company. Having the right to participate in the activities of the organization and the distribution of profits, citizens and organizations can also alienate their share in favor of third parties.
Founder– a citizen or organization participating in the creation of a legal entity. Information about these persons is entered into the Unified State Register of Legal Entities and does not change throughout the entire period of the company’s existence. The founders can create various organizational and legal forms, including LLC, OJSC, ALC.
Comparison
Thus, the main differences lie in the very essence of these definitions. A founder is a person who creates an organization from scratch. After that, he retains his status forever, automatically turning into a shareholder, member, participant or shareholder (depending on legal form). A participant can only be in a limited liability company, and he acquires his right by virtue of acquiring a share in the authorized capital.
The founders can create other organizational and legal forms, including OJSC, CJSC, and ALC. Moreover, information about them must be in the Unified State Register of Legal Entities in its original form. Information about participants may change as shares are alienated, that is, they are sold, donated, etc.
Conclusions website
- Emergence. The founders only create the organization, after which they become participants, members or shareholders.
- Acquiring status. The founders are such by virtue of the existence of a constituent agreement or statement, the participants – by virtue of owning shares of the LLC.
- Applicability. The founders create a legal entity of any organizational and legal form, but participants can only be in an LLC.
- Changeability. Information about the founders remains in the Unified State Register of Legal Entities forever; information about participants may change as the company operates.
These entities, acting within the framework of an LLC, are vested with certain rights. For example, receive accounting information about the activities of the company, take part in the work of the main bodies created in the company, receive profit depending on the funds contributed (the amount of profit can be adjusted by internal documents). In addition to rights, participants naturally also have responsibilities (for example, to act reasonably and in good faith, to contribute their share to authorized capital).
It should be noted that the number of participants in an LLC must comply with legal requirements: the minimum number of participants is 1 person, the maximum is 50 (the company cannot exceed this figure under the threat of voluntary or forced dissolution).
What is an LLC?
A limited liability company is a legal entity whose authorized capital is divided into certain shares. If the classification is carried out in accordance with the requirements of current legislation, LLC belongs to the following groups:
- Is a corporate legal entity.
- Pursues commercial interest.
- It is a non-public business company.
The law provides for the possibility of establishing a company either by one person or by several persons.
The establishment procedure is as follows:
- The founders must conclude a special agreement among themselves on the establishment of a legal entity. The said agreement specifies the following indicators: the size of the authorized capital, the rules for determining shares in the capital, and so on.
- The founders must approve the charter of the created company. It is the charter that determines the most important (structural) issues: where this society is located, what it is called, who makes decisions, whether there is a separation of powers, and more.
- The created company must be registered in the Unified State Register of Legal Entities.
Some rules of work
If a member of the LLC is:
- One person. In this case, all decisions (including questions about the establishment of a company, its structural changes) are made by this person in writing.
– Two or more persons. In this case, all decisions are made at the general meeting by voting (when establishing a company, all persons present must vote unanimously).
– More than 50 persons. In this case, the legal entity must be transformed into a joint stock company. If voluntary transformation does not occur, the specified LLC must be forcibly liquidated.
Changing the number of participants
The legislation provides two options for changing the number of participants:
- By reducing the number of members of society (for example, if a citizen wants to leave the membership).
- By increasing their number (the order must be prescribed in the constituent documents).
So, we learned that in the very definition of an LLC as a form of legal entity there is a clear indication of the number of participants. Any organization with more than 50 founders must register as a joint stock company.
Responsibilities of participants of a limited liability company
An analysis of the articles of the Federal Law “On Limited Liability Companies” shows that the set of responsibilities does not have such a wide range as the set of rights. In paragraph 1 of Art. 9 of the said Law does not contain an exhaustive list of responsibilities, but the main ones are listed there. Nevertheless, we can talk about a possible classification of all responsibilities that may arise for a participant in a limited liability company.
Failure of participants to fulfill their assigned duties is always associated with negative consequences that arise for such participants. Therefore, while disclosing the content of the obligations of company participants, we must disclose the consequences in the event of non-fulfillment or dishonest performance by participants of their duties. One of the most tangible consequences for a participant who grossly violates his duties is his exclusion from the company (Article 10 of the Federal Law “On Limited Liability Companies”).
All responsibilities of company participants can be divided into two groups: basic and additional.
Main responsibilities of participants in a limited liability company
Members of the company have the following main responsibilities:
* make contributions in the manner, amounts, methods and within the time limits provided for by the constituent documents of the company;
* do not disclose confidential information about the activities of the company.
The obligation of participants to make contributions extends to:
* contributions to the authorized capital of the company;
* contributions to the company's property.
The obligation to make contributions to the authorized capital of the company, in turn, may include:
1) the obligation to make contributions to the authorized capital of the company upon establishment of the company;
2) the obligation to provide the company, at its request, with monetary compensation in the event of termination of the company’s right to use property before the expiration of the period for which such property was transferred for use to the company by a participant as a contribution to the authorized capital, equal to the payment for the use of the same property on similar terms in during the remaining period;
3) the obligation to make contributions to the authorized capital of the company when increasing the authorized capital on the basis of an application of a third party (applications of third parties) to accept him (them) into the company and make a contribution (contributions).
The legal basis for the first obligation is Art. 16 of the Federal Law "On Limited Liability Companies", according to which each founder of the company must make a full contribution to the authorized capital of the company within the period determined by the constituent agreement and which cannot exceed one year from the date of state registration of the company. If a company participant does not make his full contribution to the authorized capital of the company on time, his share passes to the company (clause 3 of Article 23 of the Law).
The legal basis for the second obligation is provided for in paragraph 3 of Art. 15 Federal Law "On Limited Liability Companies". According to this norm, monetary compensation must be provided at a time within a reasonable time from the moment the company submits a demand for its provision, unless a different procedure for providing compensation is established by a decision of the general meeting of the company's participants.
If a company participant does not provide monetary or other compensation on time, his share passes to the company (clause 3 of Article 23 of the Law).
The company's charter may provide that a portion of the share is transferred to the company, proportional to the unpaid portion of the contribution or the amount (cost) of compensation.
The legal basis for the third obligation is clause 2 of Art. 19 Federal Law "On Limited Liability Companies". If the deadlines for making such a contribution, defined by this article, are violated, the increase in the authorized capital is considered failed.
The obligation for participants to make contributions to property is a new and controversial norm in the legislation on business companies. According to Art. 27 of the Federal Law "On Limited Liability Companies" such an obligation may be provided for by the company's charter when establishing the company or by introducing amendments to the company's charter. Such changes are made to the charter by decision of the general meeting of the company, adopted unanimously by all participants of the company.
The decision on specific contributions of participants to the property of the company can be made by a meeting of company participants with a majority of at least 2/3 votes of the total number of votes of company participants, unless the company’s charter provides for the need more votes to make such a decision.
Let us pay attention to two very important points. Firstly, if the company’s charter does not establish general duty participants make contributions to the property of the company, then the question of the possibility of making specific contributions does not arise. Secondly, if for the emergence of a general obligation the unanimity of all participants is necessary, then 2/3 of the votes of the total number of votes of the participants is sufficient to make a decision on specific contributions, in the absence of strengthening qualifications on this issue in the charter.
With this approach, it cannot be ruled out that the inclusion of the obligation to make contributions of participants to property at the stage of establishing a company could later be used to create an artificial situation when “poor” participants of the company, unable to compete with richer participants, will be unable to fulfill this obligation, which may entail their exclusion on the basis of “gross violation of duties” (Article 10 of the Federal Law “On Limited Liability Companies”).
The legislator clearly drew a line between the obligation to make contributions to property and the previously discussed obligation to make contributions to the authorized capital of the company.
The first difference is that the obligation to make contributions to the company's property is determined in the company's charter, while the obligation to make contributions to the authorized capital is determined by Law.
Second difference: according to clause 3 of Art. 27 of the Federal Law "On Limited Liability Companies", if the charter does not specifically stipulate in what form a contribution is made to the property of the company, then it is made only in money. A contribution to the authorized capital can be made in money, securities, things, rights to things and other rights that have a monetary value, i.e. The law does not establish restrictions.
The third difference: contributions to the company’s property, unlike contributions to the authorized capital, do not change the size and nominal value of the shares of the company’s participants in the authorized capital.
To further characterize the mechanism for fulfilling the participant’s obligation to make a contribution to the company’s property, it should be taken into account that making these contributions is possible in three options:
* by all participants of the company in proportion to their shares in the authorized capital of the company;
* by all participants of the company disproportionately to their shares in the authorized capital;
* not by all members of society.
If the first option is quite simple and understandable, then the last two require additional explanation.
1. If in the second option the obligation to make contributions is established for everyone, although without connection with their shares in the authorized capital, then in the third option a group of participants arises for whom the obligation to make contributions to the property of the company is not established. As an illustration of this, the law establishes that the company's charter may provide for a maximum value of contributions to the company's property made by all or certain participants of the company. Moreover, this is only one of the methods, since according to paragraph 2 of Art. 27 of the Federal Law "On Limited Liability Companies" the charter may provide for other restrictions related to making contributions to the property of the company.
Restrictions related to making contributions to the property of the company established for a specific participant in the company in the event of alienation of his share (part of the share) in relation to the acquirer of the share (part of the share) do not apply.
2. Provisions establishing the procedure for determining the size of contributions to the property of the company disproportionate to the size of the shares of the company's participants, as well as provisions establishing restrictions associated with making contributions to the property of the company, may be provided for by the charter of the company upon its establishment or included in the charter of the company by decision of the general meeting participants of the company, adopted by all participants of the company unanimously.
3. Amendments and exclusions of the provisions of the company’s charter establishing the procedure for determining the size of contributions to the company’s property disproportionate to the size of the shares of the company’s participants, as well as restrictions associated with making contributions to the company’s property established for all its participants, are carried out by decision of the general meeting of participants, adopted by all members of the society unanimously.
4. Amendments and exclusions of the provisions of the company’s charter that establish the specified restrictions for a certain participant of the company are carried out by decision of the general meeting of participants of the company, adopted by a majority of at least 2/3 of the total number of votes of the company’s participants, provided that the participant of the company for whom such restrictions are established restrictions, voted for such a decision or gave written consent.
5. The withdrawal of a company participant from the company does not relieve him of his obligation to the company to make a contribution to the company’s property that arose before filing an application for withdrawal from the company.
6. A company participant who has assigned his share (part of a share) in the authorized capital of the company bears an obligation to the company to make a contribution to the property that arose before the assignment of the specified share (part of a share), jointly and severally with its acquirer.
Obligation not to disclose confidential information about the activities of the company. Confidential information is documented information, access to which is limited in accordance with the law. The rules for handling confidential information are determined by the Federal Law “On Information, Informatization and Information Protection” dated February 20, 1995 N 24-FZ.
Additional responsibilities of limited liability company participants
All obligations of the company's participants determined by the company's charter, in addition to the obligations provided for by the Federal Law "On Limited Liability Companies", are additional obligations.
Additional responsibilities include the following:
1. The specified duties may be provided for by the charter of the company upon its establishment or assigned to all participants of the company by decision of the general meeting adopted by all participants of the company unanimously.
2. The assignment of additional responsibilities to a specific member of the company is carried out by decision of the general meeting, adopted by a majority of at least 2/3 of the votes of the total number of votes of the company's participants, provided that the member of the company who is assigned such additional responsibilities voted for the adoption of this decision or gave written agreement.
At the same time, we would like to remind you that additional obligations assigned to a certain participant of the company, in the event of alienation of his share (part of the share) are not transferred to the acquirer of the share (part of the share).
3. Additional duties may be terminated by a decision of the general meeting adopted unanimously by all members of the company.