Similarities and differences of a limited liability company
According to Iran’s commercial law, commercial companies are divided into 7 different types. These companies have similarities and differences, which are explained in this article.
Similarities of a private limited liability company:
1. The minimum capital required to register both types of companies is one million Rials.
2. Capital increase is optional in both types of companies.
3. The right to vote in a private joint stock company is based on the number of shares and in a limited liability company in proportion to the individual’s capital.
The difference between a private limited company and a limited liability company:
1- To register a limited liability company, the number of partners must be at least 2, and in a private limited company, the number of shareholders must be at least 3.
2- At the time of registration of a private limited company, at least 35% of the capital must be deposited in a bank account that is opened in the name of the company in one of the bank branches, and the relevant deposit certificate must be presented (the rest of the capital, which is 65%, is the responsibility of the shareholders) Of course, shareholders can pay more than 35% or the entire capital at the time of registration. But in a limited liability company, opening an account and depositing the capital to the bank account is not mandatory, and only the CEO’s acknowledgment of receiving the total The capital of the company is sufficient.
3- The selection of the main and alternate auditor is mandatory in a private joint stock company, but optional in a limited liability company.
4- The term of management in a private limited company is a maximum of two years, which can be extended if necessary after the above-mentioned period ends, but in a limited liability company, the directors of the company are elected for an unlimited period of time, and they can also be appointed for a period of time in the company’s articles of association. To appoint management.
5- Choosing a widely circulated newspaper is mandatory in a special joint stock company for posting invitations to participate in a special joint stock company and optional in a limited liability company.
6- The conditions for obtaining a quorum in public assemblies are easier in a private joint stock company and more difficult in a limited liability company, depending on the type of company.
7- General assemblies in a private limited company are managed by a board of directors consisting of one chairman, two supervisors and one secretary who are elected from among the shareholders, but in a limited liability company, the general assemblies of the company are managed by the supervisory board. The condition is that the number of partners is more than 12 people.
8- Capital in a limited liability company is not divided into shares or parts of shares, and the partners are responsible for debts and obligations only up to the amount of their capital in the company.
9- Managers in a private limited company must necessarily be shareholders or prepare the number of collateral shares stipulated in the articles of association and deposit them in the company’s fund, but in limited liability companies, managers are elected from among the partners or from outside.
10- Profit distribution in a private joint stock company is in proportion to the number of shares and in a limited liability company in proportion to the partners’ capital. Also, in the articles of association of the limited liability company, another arrangement for the distribution of profits can be established.
11- The right to vote in a joint stock company is equal to the number of shares in a limited liability company in proportion to the capital.
12- The calendar (evaluation) of non-cash shares in a limited liability company is done by the partners, and the partners are responsible in this regard, and their evaluation must be reasonable and logical, but the non-cash calendar in a private limited company is carried out by official judicial experts. to be
Financial Tax Group of Iranian Consultants Authority
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This post is written by Arambnamkhda