Features of a limited liability company, who is responsible for the company’s obligations, what are the accounting and tax matters. A limited company is the most popular commercial company in this country. It is an appropriate form of activity, e.g. for partners who want to maintain direct supervision over the company’s affairs and limit the risk only to their contribution no liability with personal property. So there are the ltd and plc for you.
Features of a limited company
Is a capital commercial company with a legal personality? It may be formed by one or more partners, but may not be established solely by another sole proprietorship with limited liability. Its founders can be natural or legal persons, regardless of citizenship and place of establishment. A minimum capital of 5,000 is required to establish.
Partner’s liability
The company is responsible for all liabilities. Partners are not responsible for the company’s obligations if they are not members of the management board of that company. Partners have only limited liability, up to the value of their contributions to economic risk.
If the execution against the company is ineffective, the members of the board are jointly and severally liable for its obligations. A member of the management board may be released from liability if he proves that the bankruptcy petition has been filed in due time or composition proceedings have been initiated, or that failure to file the bankruptcy petition and arrangement has been initiated through his fault, or that despite failing to file for bankruptcy and the failure to institute an arrangement, the creditor has not suffered damage.
Representation
The company’s highest authority is the shareholders’ meeting. The company is represented by the management board consisting of at least one member on the principles set out in the company’s articles of association. The company may also be represented by a proxy.
Supervision
Every shareholder has the right to individual supervision over the company. It may be limited or excluded in the contract if a supervisory board is established.
In a limited liability company, you can also set up a supervisory board or audit commission, or both. In companies whose share capital exceeds $ 500,000 and there are more than twenty-five partners, the establishment of a supervisory board or audit committee is mandatory.
Company name
The partners are free to choose the name of the Company, but this name must be sufficiently different from the names of other entities operating on the same market as the Company. The name should include the words “Limited Liability Company” or abbreviation.
Company agreement
The articles of association of a limited liability company must be in the form of a notarial deed. An exception is the registration of the company via the Internet you can use a ready template. Importantly, when registering a company online, partners of a limited liability company can only make cash contributions to cover the share capital.
The articles of association should contain:
- Company name and registered office
- Definition of the company’s business object
- Duration of the Company when the Company has been established for a definite period, the principle is to be appointed for an indefinite period
To establish a company, it is also necessary to make contributions to cover the share capital and to appoint a management board and, if necessary, supervisory board or an audit committee. The company’s governing bodies can be appointed in a notarial deed concluding the articles of association or in a separate resolution, after signing the articles of association.