Structure and governing body of LLC

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

A limited liability company is a legal entity organized by one or more founders. Its authorized capital consists of the shares of the founders, which is recorded in the documentation. Legislation regulates the procedure for creating and managing a company.

The main governing body of an LLC for most legal entities of the presented type is often limited to two positions. This is the general director and chief accountant of the company. But the full structure looks much more extensive. The governing bodies are appointed or elected at the time of establishment. Their structure is indicated by legislation. It will be discussed further.

Structure of controls

When creating a legal entity in the form of a limited liability company, there are certain requirements established by law. In addition to contributing their shares to the authorized capital, the founders are required to appoint or select the main bodies that will manage their enterprise.

Their structure is quite extensive, although in many societies it can be simplified.

The governing bodies of an LLC are the following structural entities:

1. First of all, the participants (or one founder, if only his funds were used to form the authorized capital) exercise control over their organization.
2. In addition to the founders, experienced specialists are hired for managerial positions. If there are several of them, they form a board of directors (supervisory board). In some enterprises, these positions may be abolished. They are optional.
3. Another governing body is the collegiate board.
4. To exercise control over other managers, the founders of the company may use the services of an auditor or an auditor.

You should learn more about each of these structural divisions. Each of them plays a role in the effective operation of the company.

General meeting of founders

The supreme governing body of an LLC is the meeting of founders. Each participant who contributed his share in the authorized capital of the enterprise has the right to make decisions on the direction of his company's activities. If there are several founders, they meet with a certain frequency to resolve the main issues regarding the functioning of their organization.

Such fees may be regular or extraordinary. Each founder has the right to vote, the weight of which is determined by the size of the share contributed by him in the process of founding the enterprise.

The main document regulatingmanagement activities of the meeting of founders, is the charter. It defines the competence of this body, as well as other structural units.

Competence of the meeting of founders

The supreme governing body of an LLC has a number of rights that fall within their exclusive competence. First of all, this includes questions about the main direction of the company's functioning, the decision to associate or participate with other organizations.

The founders' meeting can also change the provisions of the charter, including the structure of the company's balance sheet. They amend the contract for the creation of the organization. This body appoints executives who will exercise control over the rest of the company's personnel.

The Board of Founders elects and terminates the work of the auditor and auditor, approves the information provided in the annual accounts. Based on these data, based on the results of the reporting period, a decision is made on the distribution of net profit.

The highest governing body regulates the internal affairs of their company. It can place bonds and other securities.

If necessary, the board of founders has the right to reorganize or liquidate its company, appoint members of the liquidation commission, and approve financial matters under these conditions.

Board of Directors

The structure of the management bodies of an LLC includes such a unit as the board of directors. When creating the charter, the founders form it. Also, this document specifiesthe procedure for appointing performers to the position presented.

The founders stipulate the terms of reference and the procedure for the actions of the supervisory board. The main ones are the adoption of decisions on the further direction of the company's work, the adoption and approval of internal documents, the conclusion of transactions in which the company entrusted to them is interested under the law.

Also, the supervisory board organizes a regular or extraordinary meeting, decides on holding it and convening participants. The Board of Directors prepares documentation that is provided to the founders. At the meeting, this body can participate in the discussion of major issues with an advisory vote.

Powers of the board of directors

Such a governing body of an LLC as the board of directors has a number of powers. In addition to the rights listed above, he can form executive bodies, as well as prematurely terminate their activities. Also, the supervisory board determines their powers. He assigns the amount of remuneration to the sole contractor, collegiate managers.

The Board of Directors may decide on mergers with other commercial organizations. He also has the right to create branches, representative offices.

In addition, the supervisory board appoints an audit, approving the candidates chosen by them for the main positions. He approves the amount of their remuneration for the rendered audit services.

Executive body

Collegial governing body in LLCrepresented by the directors and the board. But the current activities of the company can also be managed by a sole contractor. This body is accountable to the meeting of founders and the supervisory board. The sole executor may be the president, general director or other manager. He is elected at the general meeting. The duration of his powers is stipulated by the charter.

A contract is concluded between the company and the person carrying out the sole executive activity. For the collegiate body, the constituent council also establishes their powers, quantitative composition. Internal documents are also issued for this purpose.

A collegial body can only consist of individuals. They do not have to be members of the society. The chairman of the collegial management body is the sole contractor. Sometimes these functions are transferred to the manager.

Powers of the executive body

The responsibility of the governing bodies of an LLC is regulated by the charter and internal documentation. The executive body has a number of powers. Since the collegial managers are headed by the chairman, he has a number of special powers.

The sole contractor can represent the interests of the company without a power of attorney, act on its behalf and make transactions. In addition, he gives powers of attorney for representative activities.

The executive body represented by the chairman, the director may issue orders related to the appointment ofpositions of various employees. He also decides on their transfer, dismissal. The sole contractor may take action to impose disciplinary sanctions or rewards.

Inspector and Auditor

The controlling body of the LLC, which is called the auditor or auditor, is elected at the meeting of the founders. The number of its members is determined by the charter. This body can conduct financial and economic audits at any time and has access to relevant documentation.

The auditor must check the annual reports, balance sheets before approval at the general meeting. The meeting of founders cannot accept such documents without an audit.

After examining each governing body of an LLC, one can understand the area of their competence. The structure in each company can be simplified, but in its entirety it includes all the services listed above.