Limited Liability Companies (LLC) are called companies with corporate structures whose members (shareholders) cannot be held personally liable for any debts or liabilities of the company, which means that only the assets of the company itself are at risk. For this reason, this type of company is considered "limited liability" while the combination of the characteristics of a corporation and partnership as a limited liability is similar to that of a corporation and the ability to have flow-through taxation for members is a feature of partnerships . LLC as a viable option when the individual wants to start a trading company or small business locally or internationally within certain limits.
The essence of a public company
In the case of a public limited company (JSC), the shareholders of those companies have unlimited liability for the debts of their companies. This means that shareholders in the Joint Stock Company have limited liability or limited liability by guarantee or stock. Usually, the shares of a JSC are transferable and can be traded on a legal exchange between private parties (private JSC) or publicly (public JSC). A corporation can raise a large amount of capital by issuing its shares. As a rule, stock corporations are set up by one or more people for the purpose of doing business on a large scale. It is represented by a board of directors consisting of at least one person and can also be represented by an authorized representative.
Differences Between LLC and JSC
JSC and LLC are the two most common types of businesses today. There are some key differences between these two legal forms.
JSC issues stocks and bonds per proxy that can be offered to the public, unlike LLC, which does not issue stocks or bonds. As part of the JSC share transfer, the transfer can be done with the consent of both parties; in the case of LLC, they can be transferred by a notarized agreement, provided that this agreement is executed with the consent of 75% of the shareholders, who make up 75% of the capital. With LLC, the capital is not evenly divided, whereas with JSC, the capital is evenly divided.
The fields of activity of the companies can also vary. LLC does not operate in business areas such as banking and insurance and in other areas determined by specific laws, unlike JSC, which can operate in any area. Because of this, financial institutions find the structure of a JSC more credible and influential. Another formal difference between JSC and LLC is that the first can be formed for an indefinite period, as opposed to the second, which is only intended to be established for a period of 99 years. At JSC, the minimum number of shareholders is 5 and there is no limit to the number of shareholders. On the contrary, the minimum number of shareholders for LLC is 2 and the maximum number is considered 50.
However, these two types of businesses have something in common. There are some similarities between JSC and LLC. Both can be recorded by filing a statute with the state register. Both can be foreign owned and have foreign shareholders. In both cases, the shareholders' liability is limited to their contributions. Both require that at least one investor acts as a natural or legal person. The investor can also be a resident or non-resident. The annual financial statements, consisting of the balance sheet, income statement and annual report, must be approved by the shareholders within 6 months of the end of the financial year.