What is the difference between LLC and ZAO? What's better?

Many beginning businessmen are interested in the question of how the LLC differs from CJSC. These organizational and legal forms of commercial property are most often found in entrepreneurial practice. Those who are going to open their business in the field of small or medium-sized business, should be able to distinguish these concepts.

Key differences

Even experienced entrepreneurs can not always immediately determine the form of ownership. And not always they are able to advise others what is better - CJSC or LLC. The differences are in such criteria as the peculiarity of creating the authorized capital and its size, the number of founders, contributions and much more.

What is JSC?

Also, this form of organizational structure for the future of the business is often chosen. What is the difference between LLC, JSC, CJSC?

Thus, the Limited Liability Company is the most attractive option, the most suitable for small and medium-sized enterprises. It can include a maximum of 50 people, and the founders can be both physical and legal entities.

But JSC is a more complicated form, it has many nuances that can be acceptable or negative to the owner. The key difference from LLC is that the authorized capital is divided not by the shares of its participants, but by shares. Also in this form there are no restrictions as to the number of persons who can be owners.

The concept of CJSC

This form of ownership is a commercial structure, where the authorized capital depends on the agreed number of shares. They are distributed among the founders and other persons, but they can not be traded on stock exchanges.

Before you know what distinguishes LLC from ZAO, you need to know all the features of the latest form:

• You can not exclude a shareholder;
• For registration it is not necessary to introduce authorized capital;
• There is a right to free disposal of shares;
• For the purpose of decision-making, the unanimous decision of all participants is not required;
• Shareholders do not need to contribute finances to the structure's assets;
• With the purpose of creating an authorized capital, state registration is required to issue securities;
• When they are paid by non-monetary means, the services of an appraiser are required;
• New members may appear;
• The need for mandatory regular reporting on the activities of the structure.

LLC: advantages and disadvantages

You need to know the key features of this form of ownership. This will help to better understand the difference between LLC and ZAO. What is the difference between them you will understand and yourself, having studied the main advantages of this type of organization.

Here everything is much simpler in terms of registration and follow-up work, in particular:

• The procedure for state registration is very simple, there is no need to record information about securities, as in the previous case;
• If the capital is formed at the expense of non-monetary funds, an independent appraiser will not be required, all works are carried out by the founders themselves, but only if their equivalent does not exceed 20,000 rubles;
• The participant can always leave the structure;
• The acceptance of new and alienation of old participants is limited in accordance with the Company's Charter;
• Data about the company's activities, unlike the CJSC, you do not need to disclose.

Disadvantages of the simplest form

As you could see, the main answer to the question "What is the difference between an LLC and ZAO?" Is the simplicity of doing business at the first sight. However, the limited liability company has its drawbacks, despite the huge number of advantages for owners of small commercial structures:

• With the purpose of implementing the procedure of state registration, it is necessary to pay at least half of the authorized capital. It is paid only in the form of cash, and participants must open temporary accounts before beginning this;
• To change the composition of the LLC requires a very long and complex procedure, including changes in the Unified State Register of Legal Entities and the registration of share alienation through a notary;
• When at least one participant withdraws, the structure may lose property;
• In order to take a decision, a unanimous confirmation of all participants is required.

Based on this, you can certainly decide on the dilemma of which type of property to prefer. Then choose yourself: LLC or CJSC.

OJSC: main differences

When registering such a form of ownership, it is not required to indicate the personal data of the founders. And here at registration of Open Company it is the obligatory procedure.

If the structure of the company will provide for an unlimited number of participants, then it is necessary to choose JSC. And even with the rights of preferential redemption of securities, you can give them or give them to relatives by inheritance.

Other distinguishing features of this structure are:

• Impossibility to exclude a participant from society through the court;
• When making important decisions, the votes are considered not by the number of co-investors, but by shares;
• The company's capital is divided into shares;
• Authorized capital must be at least 100 thousand rubles;
• The need for an annual audit.

How to make the right choice?

Before opening your business, you should carefully study the characteristics of each form of entrepreneurship. So you will find out how LLC differs from CJSC and JSC. The latter option is the most complex, and is suitable for those enterprises that plan to enlist the support of large investors and have large-scale plans. But if it is a question of a small friendly or family business, it is better to choose LLC, because it's much easier.

A clear comparative characteristic

Above we figured out what are the features of the JSC. Below, we will clearly understand how LLC differs from CJSC due to a brief description.

Depending on the characteristics of the activity, the characteristics are:

• In LLC, the authorized capital is the contributions of its members, in CJSC - for shares, its maximum size in both cases is ten thousand rubles.
• Capital in two cases is paid in the form of securities, money or other property that can be valued. But in LLC with the purpose of registration it is necessary to pay at least half of its value, and the rest within a year. And in the CJSC it is necessary to contribute at least 50 percent of the shares allocated during the creation of the structure within three months. The rest is paid in stages. And from the moment of registration it is necessary to file a package of documents within a month in order to obtain permission to issue shares.
• If the capital is paid in money in the LLC, the founder must open a special accumulative bank account and deposit funds into this account.
• In ZAO, unlike LLC, you can increase the authorized capital by increasing the nominal value of shares and attracting new ones.

Rights of participants in the structure

The form of ownership of a commercial organization directly affects the rights of its founders and owners. In a bit and differs LLC from ZAO. What is the difference and list below:

• A limited liability company may have a maximum of 50 participants, and in a Closed Joint Stock Company the same figure means not only the number of persons, but also the shareholders. If there are more of them, then it is necessary to reorganize into JSC within 12 months.
• In the first case, participants can withdraw from the membership of the structure of their own volition, and in the second they do not have this right.
• If we are talking about the alienation of a share (LLC) or a share (CJSC), in the first structure, the participants have the right to this, transferring it to third parties, if this does not contradict the Charter. Other participants or the society itself do not accept participation in the discussion of this issue. In the CJSC, shareholders also have this right, and the consent of others is also not required.
• All decisions are made in both structures on the basis of a general meeting of participants or shareholders of the company.
• In the CJSC, shareholders do not have the right to make deposits in the property of the company, and in the LLC contributions must be paid by all participants, depending on their share in accordance with the charter capital.
• As for the payment of dividends and the profit of the company, in LLC it is divided between the participants depending on a certain share, which is provided for each to the authorized capital. And in the second structure, dividends are paid to shareholders on their securities of one type or another. Payments can be made in both monetary and other equivalent.

One can for certain say that CJSC and LLC resemble each other in some way, but differ from JSC. Both organizational forms of business are able to guarantee the limited responsibility of their organizers, depending on their obligations. Their differences are in the structure of management and are not so significant.