Limited liability company: Charter capital. Shares.

The charter capital of a limited liability company is divided into shares the size of which are determined by the founding documents and determines a minimum size of the company's property guaranteeing the interests of its creditors. If at the end of the second or any subsequent year, the value of the free assets of the LLC is less than the charter capital, the company is obliged to declare and register by established procedure a reduction of its charter capital. If the value of these assets becomes less than the minimum amount of charter capital determined by law, the company is subject to liquidation.

The minimum amount of charter capital for a LLC is RUR 10,000 which is equal to about USD300. A company's charter capital must be paid fully within one year unless a shorter period is determined by the company's founding documents. At least 50 per cent of the company's charter capital must be paid at the moment of the company state registration.

As a contribution to the charter capital of a LLC may serve money, securities or other things, property rights or rights which can be expressed in money terms.

The monetary value of non-cash contributions to the company's charter capital must be unanimously approved by the company's shareholders. If the nominal value (an increase in the nominal value) of a participant's share in the company's charter capital paid as a non-cash contribution is over RUR 20,000 (approximately USD600) as of the date of filing documents for state registration of the company or of respective amendments to the company's charter, such assets must be valued by an independent appraiser.

The company's charter may establish the kinds of property that may not be contributed.

Increase of the charter capital is only permitted after it is fully paid up. The charter capital may be increased at the expense of the company's property and/or additional contributions by company participants and/or, unless prohibited by the company's charter, at the expense of contributions by third persons admitted to the company.

A company may, and in instances specified by law is obliged, to reduce its charter capital. The charter capital may be reduced by decreasing the nominal value of shares and/or by repaying the shares belonging to the company. A company may not reduce its charter capital, if as result of such reduction the capital becomes less than the minimum size of the charter capital established by law.

The company shareholders at the general meeting can decide to increase the charter capital in view of an application from a third person(s) for admission to the company and payment of a contribution. Such a decision must be made unanimously by all the company shareholders.

A shareholder is entitled to sell or by other means transfer its share in the charter capital to one or several of the company's shareholders. Consent of the company and/or other participants for such a deal is not needed. The company charter, though, may contain a provision that selling or transfer of a share by other means to the third parties may need consent of other shareholders or be prohibited. In case it is allowable for participants to transfer their share (or part of a share) to third persons, other participants have a priority to purchase the participant's share (or part of a share) at the price and under other terms of purchase as offered to the third person.

Alienation of a share must be done in a form of a written document and relevant amendments to the company charter must be registered. Company charter might require that a deal must be witnessed. For the third parties the change of shareholding will have legal force since the moment of the registration of the amendments to the company charter.

 

 

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