Russia: Types of Company
Limited Liability Companies
As in many other jurisdictions, LLCs occupy a position between partnerships and companies in terms of liability and members' rights. In particular, members of an LLC, unlike shareholders of a JSC, may exercise supplementary rights and bear supplementary obligations without regard to the size or value of such members' participation interest, as determined by the company's statutes, or as approved by unanimous vote of all company members. Moreover, in some circumstances a member of an LLC may be expelled by a court at the request of other members holding at least 10% of the equity capital in the aggregate.
The maximum number of members of an LLC members is 50. The statutory is equivalent to minimum capital 100 minimum monthly wages. At least 50% of the equity capital must be paid up before the company documents are filed for state registration with the balance to be paid up within one year from the company formation. Normally this requires that a local bank should open an interim bank account that may only be used for the purposes of new company registered capital formation; once the company formation is completed and relevant documentation is filed, the interim account can be converted into a current account.
LLCs' equity (registered) capital is composed of participation interests that do not qualify as securities under the Russian law and, therefore, LLCs are exempted from securities market regulations. No type of public offering or placement is possible. Participation interests may be of unequal size and value; however, all participation interests confer on the holders the right to vote in the company members' meeting (pro rata to the size thereof unless otherwise provided by the company statutes).
LLC members have statutory pre-emption rights in connection with offering of participation interests to third parties and the company constitutive documents may (optionally) prohibit the transfer of participation interests to third parties. Other forms of disposal of participation interests (including pledge thereof) are also subject to certain restrictions.