What is the difference between LLC and CJSC? What's better?

Many novice businessmen are interestedthe question of how LLC differs from ZAO. These organizational and legal forms of commercial property are most often found in business practice. Those who are going to open their own business in the field of small or medium-sized businesses should be able to distinguish between these concepts.

Key differences

Even experienced entrepreneurs can not alwaysimmediately determine the form of ownership. And they are not always able to advise others what is better - a company or an LLC. The differences are in such criteria as the peculiarity of the creation of the authorized capital and its size, the number of founders, contributions and much more.

What is a company?

Also often choose this form of organizational structure for the future business. What is the difference between LLC, JSC, JSC?

So, Limited Liability Company -This is the most attractive option, the most suitable for small and medium-sized enterprises. It may include a maximum of 50 people, and the founders can be both individuals and legal entities.

But OJSC is a more complex form, it hasThere are many nuances that can be both acceptable and negative for the owner. The key difference from LLC is that the authorized capital is not divided into shares of its participants, but into shares. Also in this form there are no restrictions regarding the number of persons who can be owners.

The concept of JSC

This form of ownership is commercial.structure where the share capital depends on the agreed number of shares. They are distributed between the founders and other persons, but they cannot be sold on exchanges.

Before finding out how a LLC differs from a company, you need to know all the features of the latter form:

• shareholder cannot be excluded;
• for registration it is not necessary to contribute share capital;
• there is a right to free alienation of shares;
• decision-making does not require the unanimous decision of all participants;
• shareholders do not need to contribute funds to the structure;
• in order to create authorized capital, state registration of the issue of securities is required;
• when they are paid by non-monetary funds, the services of an appraiser are needed;
• new members may appear;
• the need for mandatory regular reporting on the activities of the structure.

Ltd.: advantages and disadvantages

You need to know the key features of this form.property. This will help to better understand the difference between LLC and JSC. What is the difference between them and you will understand yourself, having studied the main advantages of this type of organization.

Everything is much easier here in terms of registration and follow-up work, in particular:

• the state registration procedure is very simple, there is no need to record information about securities, as in the previous case;
• if capital is formed at the expense of non-monetary funds, an independent appraiser is not required, all work is done by the founders themselves, but only if their equivalent does not exceed 20,000 rubles;
• the participant can always exit the structure;
• acceptance of new and alienation of old participants is limited according to the company's Charter;
• information about the company, in contrast to the company, does not need to disclose.

Disadvantages of the simplest form

As you can see, the main response tothe question “What is the difference between an LLC and a company?” is the simplicity of doing business in the first form. However, the Limited Liability Company has its drawbacks, despite the huge number of advantages for owners of small commercial structures:

• с целью осуществления процедуры госрегистрации you need to pay at least half of the share capital. It is deposited only in cash, and participants must open temporary accounts prior to this;
• To change the composition of an LLC, a very long and complicated procedure is required, including changes to the Unified State Register of Legal Entities and registration of a share transfer through a notary;
• if at least one participant leaves, the structure may lose property;
• in order to make this or that decision, unanimous confirmation of all participants is required.

Based on this, you can certainly decide on the dilemma of which particular form of property to prefer. Then choose yourself: LLC or CJSC.

OJSC: main differences

When registering this form of ownership is not required to specify the personal data of the founders. But when you make an LLC this is a mandatory procedure.

If the structure of the company will provideunlimited number of participants, then it is necessary to choose JSC. And even with the rights of preferential purchase of securities, it is possible to give them or transfer to relatives by inheritance.

Other distinctive features of this structure are:

• impossibility to exclude a participant from the company through the court;
• when making important decisions, votes are considered not by the number of equity holders, but by shares;
• the capital of the company is divided into shares;
• the authorized capital must be at least 100 thousand rubles;
• the need for an annual audit.

How to make the right choice?

Прежде чем открыть свое дело, следует внимательно explore the features of each form of entrepreneurship. So you will learn the difference between LLC and JSC. The last option is the most difficult, and is suitable for those enterprises that plan to enlist the support of large investors and have large-scale plans. But if we are talking about a small friendly or family business, then it is better to choose an LLC, because it is much easier.

Visual comparative characteristic

Above, we figured out what are the features of JSC. And below we will clearly understand the difference between LLC and CJSC due to a brief description.

Depending on the characteristics of the activity, the characteristics are as follows:

• In LLC, the authorized capital is the contributions of its members, in a company for shares, its maximum size in both cases is ten thousand rubles.
• Capital in two cases is paid in the form of valuablesecurities, money or other property that can be assessed. But in order to register, LLC needs to pay at least half of its cost, and the rest during the year. And in the company it is necessary to deposit at least 50 percent of shares distributed during the creation of the structure within three months. The rest is paid in stages. From the moment of registration, a package of documents should be submitted within a month in order to obtain permission to issue shares.
• If capital in an LLC is paid in cash, the founder must open a special savings bank account and deposit funds into this account.
• In a company, unlike a limited liability company, it is possible to increase the authorized capital by increasing the nominal value of shares and attracting new ones.

Rights of members of the structure

The form of ownership of a commercial organization directly affects the rights that its founders and owners have. In a bit, and LLC differs from ZAO. What is the difference and list below:

• Limited Liability Company mayTo consist of a maximum of 50 participants, and in the Closed Joint Stock Company the same figure means not only the number of persons, but also the shareholders. If there are more, then it is necessary to reorganize into a joint stock company within 12 months.
• In the first case, participants can withdraw from the structure of the structure of their own free will, and in the second they do not have this right.
• If we are talking about the alienation of shares (LLC) or shares(CJSC), in the first structure, participants have the right to do so, transferring it to third parties, if this does not contradict the Charter. Other participants or the society itself do not participate in the discussion of this issue. In CJSC, shareholders also have this right, and the consent of others is also not required.
• All decisions are made in both structures on the basis of the general meeting of participants or shareholders of the company.
• In CJSC, the shareholders do not have the right to make contributions to the company's property, and contributions to the LLC should be made by all participants depending on their share according to the authorized capital.
• As for the payment of dividends and profitsthe company, then in LLC it is divided between the participants depending on a share, which is provided for each of the share capital. And in the second structure, dividends are paid to shareholders on their securities of one type or another. Payments can be made in cash or other equivalent.

You can certainly say that ZAO and LLC are somehowresemble each other, but differ from the OJSC. Both business forms are capable of guaranteeing the limited liability of their organizers depending on their obligations. Their differences lie in the management structure and are not so significant.