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Limited Liability Companies (LLC)

A LLC is formed on the basis of a charter and a decision of its founders. Initial capital is provided by contributions from shareholders and may take the form of cash or other property and property rights assessed in their monetary equivalent.

LLCs may be founded by one or more individuals or legal entities.

LLCs must be registered with the state to acquire legal status. To register an LLC, the following documentation must be submitted to the State Registration Office: 

The charter of an LLC should generally specify: full and abbreviated name of the company, the number of authorized shares, the number of issued and outstanding shares and the par value, the number of members of the Board of Directors (a Board of Directors is not mandatory for LLCs), procedures for foundation and competency and activity of the company’s bodies, including the procedure for convening general meetings, preparation for and holding a general meeting of shareholders and meetings of collective bodies, procedures for informing shareholders on the activities of the company, a list of governing positions within the company, start and end dates of the fiscal year of the company, etc.

The minimum amount of charter capital for a foreign invested LLC (BEFI) is USD 100,000, which must be paid prior to registration (Please see Legal framework section for details). There is no minimum amount of charter capital for a LLC with no foreign investment (BENFI).

Shares and Rights

There are two types of shares - ordinary and preferred. There is no limit to the number of preferred shares that can be issued. The holder of an ordinary share has the right to vote at the general meeting of shareholders and take part in the election of management bodies. The holder of preferred shares has priority rights to receive dividends and also (as determined by the company’s charter) to participate in prior distribution of property in the event of liquidation. A holder of a preferred share has no right to take part in the management of a LLC, except for certain cases provided by law. 

Shareholders may elect to distribute dividends if the company is solvent after such distribution. Dividends may be paid in monetary form, in property or in the form of securities. 

Termination

A company may be terminated in the following circumstances:

Termination may occur through reorganization or liquidation. Liquidation is carried out by a liquidation committee appointed by the general shareholder’s meeting, or in case of insolvency, by the courts.