The definition of limited liability company
Limited Liability Company is a company that is formed by two or more persons for Business Affairs and each of the partners is liable only to the amount of the invested shared capital in the company and responsible for the company’s commitments and liabilities. The name of the limited liability company in Iran should contain the phrase (Ltd).
Differences between joint stock companies and limited liability company:
- In the limited liability company the number of partners should be at least 2 people and in particular the number of shareholders of joint stock company at least 3 people.
- The minimum capital for company registration for Ltd and joint stock company is one million Rials.
- For private capital companies 35% of total shares must be in one of the bank branches. a corresponding certificate and 65% with affiliate.
- Selecting the inspector or alternate inspector is compulsory in joint stock company but optional in private limited liability companies .
- The maximum period of management in joint stock company is two years which is renewable and for limited liability companies is unlimited period.
- Newspaper choice for private joint stock companies to place ads are compulsory and it is optional for limited liability companies.
- The conditions for general assemblies for joint stock company is easier and in limited liability company is more complicated according to the type of company.
- General Assemblies in joint stock company by a Board of directors consisting of a Chairman and a Secretary and two supervisors who are elected among the shareholders. in a limited liability company the General Assembly of the company will be held if the number of its partners from are more than 12 persons.
- In a special joint-stock company and limited liability company increase of capital is optional.
- In limited liability company stock or stock parts will not be divided and its partners are responsible for credit and obligation only up to the amount of their investment in the company.
- In joint stock company managers necessarily must be shareholders or to provide the number of shares certificate which stipulated in the articles of association.
- For joint stock company corporate profit divided relative to the number of shares and in limited liability company will be divided into the ratio of capital. partners in limited liability companies can arrange for another statute prescribed profit split.
- In the joint-stock company the right to vote will be by number of shares and in limited liability companies by investment ratio.
- Evaluation of non-cash share in a limited liability company is by the partners and partners in particular have responsibility. Evaluation of non-cash in joint-stock company conducted by the Justice official experts.