Definition of an LLC: Limited Liability Company

1. Home Login Signup Advertising WHY LOOPDESK? MEMBERSHIP FEATURES Browse Articles Category: All Articles >> Corporation Definition of an LLC: Limited Liability Company Published on 18 January 2020, 05:41 by Corpseed Tags: Limited Company Registration start a business The limited liability company is the form of business acclaimed by Indian entrepreneurs wishing to open a business with several partners. The strength of this status is to be adapted to any business creation project, while guaranteeing financial responsibility limited to the contributions of the various partners. It is therefore a perfect solution when you want to start a business without taking too much financial risk. If you have not yet decided to open this type of business, you can use our tool to assess your project , otherwise follow our guide to create an LLC. Characteristics of the LLC The Associates An LLC can be made up of a single partner (one-person company with limited responsibilities), or of several (up to a limit of 100). They can be natural or legal persons (a company can therefore be associated with a Limited Company Registration). The particularity of the LLC for the partners is the limit of losses to the amounts of their contribution. Even if in some cases, which we will see below, this limit can be lifted. In return for their contributions, the partners have the right to vote during meetings and they can participate in decisions in the life of the company. Social Capital The share capital is freely fixed in the articles of association by the founding partners. There is no minimum capital to open an LLC (as for the creation of an SAS for example). It can be of different form: cash contributions, contributions in kind or in industry. In the latter case, it is the statutes which determine the conditions under which industrial shares can be subscribed. It is important to note that only contributions in cash and in kind participate in the constitution of share capital. When the LLC has variable capital, it is necessary to mention in the articles of association the amount of non-reducible capital (compulsory greater than one tenth of the share capital fixed in the articles of association). It must then be declared in the trade and companies register . Thanks to this system, opening an LLC makes it easier to enter or exit partners by avoiding too much formalism. Account Deposit SARLs must file their annual accounts with the commercial court within one month after their approval by the partners (this period may be extended by an additional month if it is an electronic filing). Headquarters The LLC can be domiciled in its own premises or at the home of its manager. Social Security and Remuneration of the Manager However, he is not necessarily a member of the company. Their appointment takes place following an assembly or directly in the statutes. The role and power of the manager (s) are defined in the articles of association . He is the legal manager of the LLC and the only person authorized to act on behalf of the company. General Meetings The LLC must hold a general meeting at least once a year for the approval of its accounts, and this, within 6 months of the end of the financial year. The Advantages of LLC Special Diets The family LLC scheme is specific to this status, SAS or SA cannot benefit from it. It allows unlimited benefit from the income tax (IR) regime without limitation of duration. The Status of the Spouse Creating an LLC offers the manager's spouse the possibility of opting for the status of collaborating spouse if the company has no more than 20 employees. This allows the spouse to benefit from socially complete protection without having a salary, to participate legally in the activity of the company and gives the power to perform in the place of the manager the administrative acts relating to the operation of the LLC. The Possibility of Having Several Managers Unlike SAS where there is only one president, is to offer the possibility of appointing several managers. This allows in particular distributing power more equitably between the founding partners. TNS Status This is surely the best known advantage of this legal status, the status of TNS self-employed worker. It makes it possible to avoid the formalism linked to pay (no pay slip, no declaration to the regular, etc.) but above all to reduce the rate of social charges compared to that of an assimilated salaried manager. Please note , the partners' liability limit, regarding the amount of contributions, can be brought into play if management faults (or even imprudence or negligence) have been committed and if these faults have contributed to insufficient assets. of the company. The guilty partner (s) will then be likely to have to fill the liabilities of the business. Only a court can, however, have the power to lift this protection. Taxation of the Limited Liability Company The LLC is subject to the corporate tax system (IS). Under this regime, the tax administration considers the company separately from its managers (the latter will be taxed on their remuneration and on the dividends received, in their own taxation on income). The company therefore proceeds to the calculation and the declaration of its net profits (from which the directors' remuneration can be deducted), as well as to the payment to its revenue of taxes of the sums due. The capital of your company has not been entirely paid by the partners or is held for less than 75% by physical persons: 33.1 / 3% for all of its profits. Other special conditions can reduce the CIT rate, you can find out by clicking here. Taxation of Managers And Partners The tax system of LLCs allows managers to be taxed only on income tax whether for their remuneration received or for dividends received. Partners are also taxed on income when they receive dividends. Formalities for Setting up an LLC To create your limited company, you must follow the following procedure: 1.Draft the statutes of the LLC. They define the rights and duties of each of the partners and managers. They also set the operating rules for the company. 2.Write the minutes of appointment of the manager (s). Two copies signed by all the partners are necessary for the registration of the company. 3.Make an appointment in a bank for the opening of a professional account and the deposit of the share capital (the cash part).. 4.Publish a notice of incorporation of the LLC in a newspaper authorized to receive legal announcements. 5.Make an appointment with the center of business formalities (CFE) of the competent CCI. Here is the list of CFEs 6.Finally, an original of the articles of association must be registered within one month of its signature at the registration office of the Tax Center

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