The beginning of the activity of an enterprise of such forms of ownership as OJSC, CJSC, LLC, provides for the creation of an authorized capital. These are all tangible and intangible assets that provide security guarantees for the shares of the co-founders. If start-up capital can be spent entirely for the purpose of implementing a business project, then the authorized capital remains unchanged for two years. We'll look at the details in the article.
What is authorized capital
Authorized capital– these are all the organization’s resources necessary for its successful launch. This includes cash, securities, property. The management company is formed from its own and investment funds. Resources involved from outside are provided with a guarantee of return from the authorized capital. In other words, the Criminal Code shows the initial value of the enterprise’s assets.
One or more people take part in the establishment of the authorized capital of an LLC. The co-founders make whatever contribution they can with material and intangible assets. The interest of LLC participants is to receive dividends throughout the entire activity of the enterprise in percentage terms, according to the value of the shares.
The authorized capital of an LLC is the minimum property value of the organization, equivalent to the nominal value of the shares of the co-founders. The management of the enterprise signs an agreement with each investor. Under the terms of the agreement, the management company acts as a guarantor covering all possible losses in the future.
Meaning and functions
The authorized capital is the initial financial component of the enterprise. The total amount of resources depends on the functionality of the organization. During registration legal entity the starting amount is fixed.
Authorized capital in the modern sense is divided into two categories:
- Equity, acting as a guarantor to the founders of the business. Includes all enterprise resources.
- Capital as an accounting and legal unit- These are funds and income received in the process of development of the organization. The movement of funds is reflected in accounting entries.
The value of the authorized capital lies in its functions:
- Formative function. Based on Russian legislation, it is determined minimum size Criminal Code and its material basis. The conditions for increasing or decreasing capital are negotiated. The starting function gives the initial impetus to the organization's activities and lays the material basis for the future.
- Guarantee function. If the organization’s activities turn out to be unprofitable, the management company will serve as a guarantor to ensure repayment of debt to creditors and investors.
The authorized capital is considered asset of the enterprise. In the event of an unexpected termination of activity or bankruptcy of the organization, all property is put up for sale in order to return the value of the shares to the co-founders.
Minimum authorized capital
Federal Law on the minimum size of the Criminal Code No. 14 FZ dated 02/08/1998, with amendments and additions for LLCs, came into force on 01/01/2017.
According to Federal Law No. 14, the smallest starting amount is 10,000 rubles. Moreover, it must be paid only in monetary terms. The remaining amount exceeding the minimum amount is formed from any resources.
For enterprises whose projected profits are quite high, an increased amount of the capital is established:
- 100 million rubles will be contributed by organizations whose activities are related to gambling: casinos, slot machines, bookmakers;
- 300 million rubles – starting amount for banks;
- 90–180 million rubles – licensed organizations providing loans to the population;
- 60–120 million rubles will be contributed by medical insurance companies;
- Alcohol producers will pay 80 million rubles.
The size of the capital company is primarily influenced by the type of activity. The LLC's constituent documents stipulate the minimum starting amount and the conditions under which its size is reduced or increased.
The size of the capital may be affected by legislation at the regional level. Local authorities have the right to establish restrictions under the Criminal Code on certain categories of products and services produced.
What influences the size of the authorized capital
During the operation of the enterprise, funds from the authorized capital are allowed to be spent on its own needs: purchase of equipment, raw materials, payment wages, payment for rent of premises. At the end of the second reporting year, the size of the capital stock should not be lower than the pledged initial cost.
The size of the starting amount and its changes significantly affect the change in the value of investors' shares.
During the operation of the enterprise, a voluntary reduction of the initial capital is possible. If the board of directors considers it appropriate to reduce the starting amount, then appropriate adjustments are made to the company’s Charter. For example, entered manufacture building not used for its intended purpose. It is returned to the co-founder's ownership.
The percentage of investors' shares will remain unchanged, and monetary indicator will decrease in accordance with the decrease in the size of the capital.
Let's look at an example:
An initial capital of 2,000,000 rubles was established. The LLC has three founders.
Sergeev’s share I.V. – 60% = 1,200,000 rubles.
Yakovlev S.K.’s share is 25% = 500,000 rubles.
E. S. Chernova’s share is 15% = 300,000 rubles.
By agreement of the parties, the size of the authorized capital is reduced to 1,200,000 rubles. Thus, the share participation of the co-founders will change only in monetary terms:
Sergeev I.V. – 60% = 720,000 rubles.
Yakovlev S.K. – 25% = 300,000 rubles.
Chernova E.S. – 15% = 180,000 rubles.
It is allowed to reduce the starting capital amount to its maximum value - 10,000 rubles. If its size is below the minimum level, the enterprise is subject to liquidation.
At a meeting of co-founders, a decision may be made to increase the size of the capital company, formalized additional document to the Charter of the organization. The percentage of investors' shares will not change, but the amount of dividends will increase.
The increase in the value of shares is calculated by analogy with the example discussed above.
How is the authorized capital of an LLC formed?
At the stage of LLC formation, the Charter is drawn up, which stipulates the size of the capital. Both one and several co-founders take part in the creation of a company. It is clear that it makes no sense to start an activity with 10,000 rubles. In practice, the initial starting amount is much higher. Additionally, it is more profitable to open an individual entrepreneur or LLC.
Registration of an LLC involves the submission of constituent documents, which indicate the estimated value of the enterprise. A current account is opened. Within four months after official registration of the company, the authorized amount is fully contributed by the co-founders.
Methods of application:
- the amount of money in Russian rubles is sent to the LLC’s current account;
- money in the form of securities: shares, financial certificates, bills, checks, etc. are provided with an extract from the LLC register;
- real estate, equipment, transport, technical equipment, equivalent to a monetary unit;
- property rights, trademarks and more.
The addition of intangible assets provides for a preliminary assessment of value if the nominal amount of the property is above 20,000 rubles. An independent appraiser is appointed. When registering an LLC, the tax service is provided with a document on the ownership of the object, acting as a share of the management company, an act of transfer of property to the LLC and a report on its assessment.
Interesting moment! If one of the founders made a contribution to the management company, for example, in the form of bills, then they become the property of the LLC. If for some reason the company transfers the rights to the securities back to the investor, then for the latter it is taxable income. It turns out that the investor will pay income tax for his own bills.
Structure
The financial component of the starting amount of an LLC is divided into five elements:
- , expressed in the initial cost of the organization's shares. The indicator characterizes the basis and property base that determines the further activities of the LLC.
- Extra capital. It is formed due to changes in the value of the enterprise on the basis of revaluation, revaluation, gratuitous transfer to third parties, profit from the sale of securities. The difference between the initial cost of assets and the proceeds from their sale is taken into account.
- Reserve capital- emergency reserve of the enterprise, formed from profit funds. Used to pay off losses and eliminate force majeure situations. The size of the capital account is at least 15% of the LLC's capital.
- retained earnings- this is receiving excess profits. The indicator characterizes the financial stability of the enterprise. The NP is the key source of financing for the LLC. It can be directed to the authorized capital, current operations of the organization, and an increase in liquid assets.
- Trust funds, raising funds from the retained or net profit of the LLC. Funds are allocated for technical equipment, equipment modernization, social development of the enterprise, research, and the purchase of raw materials to increase production. Social development involves maintaining a favorable atmosphere in the team.
Kinds
Depending on the organizational and legal form, the management company is divided into four types:
- Share capital provided for in organizations that do not have a Charter. This includes general partnerships and limited partnerships. The financial component of the share capital is formed from the shares and contributions of the co-founders in monetary and property terms.
- Authorized fund– these are all the intangible assets of an enterprise necessary for the implementation of the organization’s activities. UV is laid down in state and municipal enterprises.
- Unit trust– used in cooperative organizations. Cooperative activity provides for the pooling of share contributions of co-owners and funds earned in the process of doing business.
- provided for in CJSC, OJSC, LLC. This is the starting financial component necessary to launch a new enterprise and ensure the safety of raised investment funds.
What is a share in the authorized capital of an LLC?
An LLC can be opened by one or more participants. In the first case, the capital is not divided. In the second, the starting amount is divided into percentage shares depending on the contribution of the co-founders.
Let's look at an example of calculating shares:
According to the LLC Charter, a capital amount of 1,300,000 rubles is required.
Khakimov M. Yu. contributed 900,000 rubles. His share = 70% (900,000*100/1,300,000);
Yurasova E.V. contributed 200,000 rubles. Her share = 15% (200,000*100/1,300,000);
Sergeev V.N. contributed 200,000 rubles. His share = 15% (200,000*100/1,300,000).
The total amount of shares is 100%, which corresponds to the starting amount of 1,300,000 rubles.
The controlling stake is held by M. Yu. Khakimov. It is he who will be able to have a greater influence on the course of development of the enterprise.
The maximum deposit amount may be subject to restrictions. A change in the ratio of shares also takes place. All nuances are specified in advance in the LLC Charter. If in the process of carrying out activities there is a need to make additions regarding equity participation, the decision is made at general meeting through voting.
At the time of registration of the LLC, the management submits to the tax office the Charter of the organization, which contains data on the number of co-founders and the size of shares of each participant. Over the next four months, each depositor is obliged to pay his share.
Accepted payment:
- Russian rubles;
- securities;
- property, technical equipment, transport, etc.;
- rights to property or any property.
If the share is not paid within the appointed time, it goes to the LLC. This part of the management capital is sold to another investor or distributed among the existing co-founders. Payment of the outstanding starting amount is made within one reporting year.
What is alienation of a share in the authorized capital
LLC participants have the right to dispose of shares at their own discretion - to sell to community investors or third parties, that is, to produce alienation. The opinions of other co-founders are not taken into account unless otherwise specified in the constituent documents.
The transaction is carried out by way of succession. The primary right to purchase the alienated share belongs to other LLC participants, and then to third parties. If the organization’s charter contains a ban on the sale of shares outside the LLC, then the transaction is concluded in favor of the company.
All alienation agreements are notarized. In a short video, Alexander Trifonov talks about the procedure for concluding a transaction to sell a share to third parties:
When organizing an LLC, you should not focus on the minimum size of the capital. The higher the starting amount initially pledged, the more confidence the organization will receive from investors. The new enterprise will receive a sufficient number of assets for the purpose of a successful launch. A small amount of authorized capital is required small investment. But here it becomes difficult to find investors and lenders.
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How is the authorized capital of an LLC formed in 2019, and what are the nuances of creation? When registering an LLC, first of all you need to think about the formation of the authorized capital.
The law specifies strict requirements regarding the minimum size of the capital required for the full functioning of the company.
However, legal regulations change periodically. What are the features of the authorized capital in 2019?
General points
Many entrepreneurs are very formal about the size of their fixed assets. However, this attitude indicates some economic illiteracy and the absence of a clear action plan.
It is not for nothing that the state establishes rules regarding the authorized capital for limited liability companies.
The mandatory presence of authorized capital is due to the need to:
- providing financial guarantees to creditors;
- collection of debt obligations in case of bankruptcy;
- formation of a reserve fund for the above cases.
The main condition for the legal existence of an LLC is the presence of a minimum amount of authorized capital. But how to form it correctly? What is the deadline for depositing funds? Can the funds of the management company be used in the future?
What it is
First of all, you need to understand the very concept of “authorized capital”. To do this, it is worth understanding what an LLC is.
A limited liability company, or LLC, is an organization founded by one or more individuals and legal entities for the purpose of profiting from the business.
The initial capital for the operation of the company becomes the totality of contributions of participants (founders).
Thus, the authorized capital is the total amount of contributions from all participants in the company. The contribution of each individual founder is called a share.
The total number of shares in the authorized capital is limited by law to the number of founders, the number of which for an LLC can reach 50 people.
In addition, there is no minimum or maximum per share. The only requirement of the law is that the entire amount of the authorized capital must be no less than the minimum value.
Accordingly, the shares of individual participants may be unequal. Such contributions are expressed as a percentage of the total capital.
The authorized capital of an LLC is the totality of all shares of its founders. At the same time, contributions from participants can be made not only in money, but also in property.
What is it for?
The amount of the authorized capital is fixed in the LLC upon creation of the company. At its core, the authorized capital is the minimum guarantee for the fulfillment of the obligations of a legal entity.
That is, by specifying the minimum amount of its capital, the company provides creditors with a guarantee of interests.
This means that creditors will be able to be guaranteed to return the funds invested in the LLC within the authorized capital. However, in addition to the guarantee function, the authorized capital also has another purpose.
So, his direct income depends on the size of the share of a company participant. Dividends are distributed in proportion to the contribution of each founder.
In addition, depending on the size of the share, the votes of participants are distributed when making decisions regarding the management of the company’s activities.
The owner of a share has the opportunity to receive the full value of his contribution upon leaving the company and has the right to part of the property in the event of liquidation.
Current regulatory framework
All the nuances of LLC activities are stipulated in Federal Law No. 14 of February 8, 1998. The current version of the law is based on amendments introduced.
The LLC Law regulates all key legal actions, including such as:
- creation of society;
- registration of a legal entity;
- functioning;
- reorganization;
- liquidation.
This law defines an LLC as a company organized by one or more participants and having an authorized capital.
This capital is created in accordance with the constituent documents from the contributions of the founders. The founders of an LLC can be both legal entities and individuals.
In this case, the maximum number of participants should not exceed fifty, otherwise the LLC will be transformed into a JSC.
Similarly, the authorized capital can be reduced, but only to the permissible minimum. In addition, in the event of a reduction in the capital, creditors have the right to demand immediate repayment of obligations.
What does size affect?
The amount of the authorized capital of an LLC determines the extent to which the company is able to bear financial obligations.
It is precisely because of the guarantee of obligations that the requirement for the minimum size of the capital is so strict.
The management company initially determined by the Charter should be formed not only for the start of a business. Throughout the existence of society, the amount of capital must correspond to the fixed value.
If at the end of the reporting year the amount of capital has decreased, it must be increased to the established amount.
If, after several years at the end of each reporting period, the size of the authorized capital decreases, then the authorized capital must be reduced.
If the volume of net assets decreases below the permissible value, then the organization is subject to liquidation.
If, according to the law, the size of the charter capital is only the basis for registering a company, then for creditors this indicator is more significant.
Any person investing in cooperation with an LLC has the right to inquire about the amount of the company’s authorized capital.
Thus, it becomes clear whether the LLC will be able to return the invested funds under unfavorable circumstances. Investing in the activities of an LLC an amount exceeding the authorized capital means not having any guarantee of return.
The size of the authorized capital also affects the ability to choose the type of activity. For example, to obtain a license for certain types of activities, a strictly established amount of capital is required.
The possibility of obtaining a bank loan for business development also depends on the amount of capital. It is the authorized capital that indicates the degree of financial stability of the enterprise.
Where is the Criminal Code entered?
How to pay for the authorized capital of an LLC upon creation? Until 2014, there were rules in force according to which it was necessary to form an authorized capital even before registering a legal entity.
For this purpose, a special savings account was opened at the bank. 50% of the amount of the authorized capital prescribed in the Charter of the company was contributed to it.
After registering the LLC, a current account was opened for the organization. Funds from the savings account were transferred to it and then the remaining funds were deposited here.
Within a precisely defined period, 100% of the approved amount of the authorized capital had to be received in the LLC’s current account. Where to contribute the authorized capital in 2019?
Now there is no need to open a savings account and deposit funds before registering an LLC.
The organization's current account is created after the company is registered. But the funds must be deposited no later than the established period.
Minimum size
Some nuances of creating the authorized capital of an LLC are explained in. We are talking here about smallest size Criminal capital, which in 2019 cannot be less than 10,000 rubles.
The indicator on the basis of which the amount of the authorized capital of an LLC is calculated is the minimum wage (minimum wage).
IN in this case 10,000 rubles is 100 minimum wage. Exceptions are provided for organizations whose type of activity requires larger size authorized capital.
For example, depending on the specific type of activity of the company, the smaller amount of the authorized capital deposited into the current account can vary from 60 to 300 million rubles.
In addition, the minimum amount of authorized capital is affected by restrictions established by local governments.
Depending on the type of activity at the local level, a minimum value of the authorized capital may be established in an amount exceeding 10,000 rubles.
When is proof of payment required?
Confirmation of full payment of the authorized capital may be required both by the company itself and its participants.
The LLC must submit such a certificate in the following cases:
- receiving ;
- increasing the authorized capital;
- formation of internal reporting of legal entities, etc.
A company member may need a certificate if:
- sale or donation of a share;
- registration of a share in .
In 2019, the application for registration of an LLC indicates the size of the authorized capital, but no documentary confirmation is required.
A document confirming payment of the authorized capital may be:
- on depositing funds into the LLC’s current account for the purpose of forming a management company;
- a copy of the primary payment document.
When a share is contributed by property, the repayment of the share is confirmed by a set of documents, including:
- copies of documents certifying ownership of the property of the LLC participant;
A certificate of payment for the management company can be issued either to an individual member of the company or confirm full payment by all participants.
What is the deadline for depositing upon registration?
The period for contribution of the authorized capital is determined by the adoption of a decision on the creation of a company. But at the same time, the full amount of capital fixed in the Charter must be paid within four months after registration of the company.
If there is no evidence of payment by a participant for his share, then this person does not receive any rights. In this case, it is impossible to completely exempt the participant from paying the share.
When a participant fails to pay his share within the prescribed period, it becomes the property of the company.
In this case, the size of the capital may be reduced or the unrealized share may be transferred to another participant, who will pay for it.
Is it possible to spend it?
The mandatory presence of a minimum authorized capital does not mean that funds must be kept on current account society without the possibility of use.
Funds can be used for the needs of the organization. For example, for renting premises, paying salaries to employees, payments.
You can and should use the authorized capital to receive. The main thing is that the funds are spent exclusively on the needs of the organization.
But with this approach, a situation may well arise that the authorized capital exists only formally, but in fact has long been dissolved among the net assets of the LLC.
In this case, it is stipulated that the amount of the authorized capital after two years from the date of creation of the company should not decrease.
Otherwise, you need to officially reduce the capital or liquidate the organization. At the same time, it must be taken into account that the authorized capital is also a guarantee for creditors.
Of course, you can show the Charter, where the amount is indicated. But confirmation of the reliability status of the partnership will be documentary evidence of the real size of the authorized capital.
additional information
In accordance with legislative norms, the authorized capital can be contributed not only with money, but also with property or other valuable assets.
However, a situation may arise when the company has property for the required amount, but in fact there are no real funds.
For this reason, the law determines that the minimum amount of the capital is deposited exclusively in cash to the current account. But this does not mean that each participant is obliged to pay a certain part in money.
Video: the essence of the authorized capital
It is possible that one or more participants will contribute their shares in money, and the rest - in property. The main thing is that the LLC account has a minimum amount of capital. Sometimes a company is founded by one participant.
In this case, he will own 100% of the authorized capital. In this case, the standard norm applies. The minimum amount of the management company is contributed in money, and the remaining amount is contributed by property.
Why is its assessment needed?
An assessment of the property contributed as a share of the authorized capital is required to determine the monetary equivalent of the contribution. The value of the property must be confirmed by an appraisal report.
The constituent documents reflect the contribution of each participant. The decision of the general meeting of participants reflects the contribution of the participants' share of property.
After registration of the organization, the property contribution is transferred to the balance sheet of the LLC.
The nominal value of the property transferred to the management company can be determined independently by the company's participants.
But if the price of the property clearly exceeds 20,000 rubles, then, according to the LLC Law, the involvement of an independent appraiser is mandatory.
At the same time, certain rules (clause 2 of Article 66.2 of the Civil Code) stipulate that entering property into the Criminal Code without the involvement of an appraiser is unacceptable. For this reason, contradictions arise.
It is also necessary to take into account that the cost of an appraiser’s services may exceed the value of the property itself. Also, mistakes may be made by the participants themselves when making property contributions.
Therefore, when including property in the Criminal Code, particularly careful registration is required, including checking the legality of the disposal of the property.
Purchase and sale of shares
The share in the authorized capital belongs to the member of the company who contributed it. Accordingly, he has the right to dispose of his property at his own discretion.
In particular, it can be carried out. Also, a share can be sold, donated, inherited and alienated in other ways.
The sale of a share in the authorized capital is carried out according to the standard purchase and sale scheme. But the following conditions must be met:
- an LLC participant has full rights to dispose of shares;
- the decision to sell does not contradict the terms of the Charter.
The sale of the management company's share is formalized by a standard form agreement. In this case, the transaction must be certified by a notary. All required entries are made in the organization's accounting records.
Among other things, the LLC is required to reflect the sale of the share in the appropriate report that complies with the applicable tax regime. A contract for the sale and purchase of a share of the authorized capital is possible.
Among the features of the sale of a management share, it should be noted that LLC participants have a preferential right to purchase over third parties.
The share is sold at a fixed price or according to the evaluation criteria specified in the Charter.
The seller of the share notifies the other participants of the desire to sell. The response must be provided within thirty days. If you refuse to purchase, the share may be sold to a third party.
Procedure for disposition upon liquidation of LLC
The amount of the authorized capital is the insurance fund of the organization. Therefore, in the event of liquidation of an LLC, first of all, obligations to creditors are repaid at the expense of capital in the order of priority.
In this case, obligations to employees and the budget are first repaid, and then debts to creditors who have submitted their claims are repaid.
First of all, cash is used to pay off obligations. If there is not enough money, then the property is sold.
The property remaining after settlements with creditors is distributed among the participants in proportion to the size of their shares.
When you register a limited liability company, first of all you need to think about the formation of the authorized capital (authorized capital). It represents the totality of the founders (at nominal value). From the legal side, the management company is a property zone of responsibility to creditors; from the economic side, it is the financial basis for the fruitful start of a profitable business. What does the authorized capital of an LLC mean and how it is formed, we will explain in the article.
After the necessary payments, the remaining part of the property is distributed among the company participants in in a certain order: first, the amount of distributed but not yet transferred net profit is paid, then the remainder is given in proportion to the founders’ contributions to the management company. Thus, closing a company is one of the ways to return property.
Some formalities
The property that is included in the company's capital should, one way or another, be used to make a profit and spent only on its needs. The money can be spent on rent, employee salaries, and utility bills. Real estate is converted into warehouses or offices where staff work or production processes take place.
Many business owners wonder how the authorized capital is stored. It turns out that this fund is used in work and exists only on paper; it literally dissolves in the net assets of society. There is only one point for control, already mentioned above: if, after 2 years from the date of registration, the amount of the company’s net assets according to the documents is less than the actual authorized capital, it either decreases or (if there is nowhere to decrease).
The fund is used in work and exists only on paper; it literally dissolves in the net assets of society.
Since your authorized capital is a property guarantee to creditors, it is better to provide them with the opportunity to find out its real size and document this. Remember, the larger the authorized capital, the higher the partner’s reliability status.
What does the authorized capital of an LLC provide?
For the founders, the shares they contribute determine the amount of regular income, since the distribution is proportional to the contribution of each of them. In addition, the owner of the share has the right to vote, manage the affairs of the company, receive the full value of the contribution from the founders of the company, as well as the right to part of the property upon liquidation.
Each share is disposed of by the founders themselves: the share can be donated or inherited. The withdrawal (sample application for it) of one of the founders from the LLC entails the alienation of his share in favor of the company, other founders of the same company (they have the right of preference when purchasing) or an outsider (Article 93 of the Civil Code of the Russian Federation).
The size of the enterprise's capital affects the ability to engage in certain activities that require a license. For example, to implement alcoholic products, you need an authorized capital of 50 thousand to 1 million rubles, depending on the territorial location. Its size determines whether you can take out a large loan from a bank, because it is the authorized capital that determines the financial stability of your business.
Thus, the authorized capital of an LLC is not just a value expression of investments in future business cash and assets, but also an indicator of reliability, stability and readiness to meet its obligations. It is necessary to regulate relations between the founders, gives them certain rights and obliges them to bear responsibility in accordance with their shares.
Participation of the authorized capital in the company’s activities has a lot of features and functions. Without understanding this indicator, it is difficult to draw conclusions about the state of affairs of the enterprise. Authorized capital is one of the most important sources of funds participating in the activities of the enterprise. Therefore, its features and functions should be examined in detail.
What is authorized capital
By definition, capital is the amount of funds, the property of an enterprise, which is used to make a profit.
The authorized capital is the initial contribution of the founders of the company, invested to ensure a minimum profit, as well as to satisfy the interests of creditors. Its main purpose is to insure the investments of creditors that they made to generate income for the company.
Therefore, the authorized capital has a fixed amount. This value is specified in the documents when creating the company.
The authorized capital of an enterprise by form of ownership refers to its own funds. When a legal entity is founded, its authorized capital is equal to its own. The company's property, which it owns, when converted into cash equivalent, is the considered type of equity.
With a positive result of the enterprise's activities, its own funds increase by directing retained earnings back into circulation. In this case, the authorized capital will be less than the legal entity’s own funds.
Performing the most important functions in the activities of the enterprise, the formation of these funds is clearly regulated by the legislation of the Russian Federation.
Formation of authorized capital
Depending on the organizational and legal form of the enterprise, its initial equity capital is also formed. A contribution to the authorized capital of a partnership is the funds contributed by the founders to the company’s activities, guaranteeing each of them share ownership of the enterprise. 
For joint stock company contribution to the authorized capital is a fund formed by selling shares. The number of owners for this type of organization is quite large. Therefore, the composition of owners easily changes. This does not apply to closed joint stock companies.
Partnerships are convenient as a form of organization for small enterprises. Joint stock companies are more suitable for large enterprises.
Less popular forms of organizations are cooperatives and municipal companies. The authorized capital of municipal organizations is formed from funds of the state or local budgets. Cooperatives form this fund from the shares of their owners.
Functions of authorized capital
Authorized capital represents funds that perform a number of functions in the company's activities.
One of the main functions that this fund performs is the start of activities. This reflects the rights of owners to start their production activities. Regardless of the results of work, the authorized capital of an enterprise is the most stable liability item.
The next function is warranty properties. It is the authorized capital that provides the minimum that is necessary for insurance in the event of the need to settle accounts with creditors.
Another property of the authorized capital is the distribution function. It indicates what voting rights the investor has in the management of the organization. The value of each share in the authorized capital determines the value of the organization’s property.
Minimum authorized capital
The minimum amount of authorized capital is constant and is established at the time of creation of the organization.
In the future, no one has the right to force a legal entity to increase this fund. An increase in the minimum wage (SMW) affects only newly organized enterprises. The minimum amount of authorized capital is:
- for LLC – 10 thousand rubles;
- for closed joint stock companies – 1000 minimum wages;
- for OJSC – 1000 minimum wage;
- For state enterprises– 5000 minimum wage;
- for a municipal enterprise – 1000 minimum wages.
To implement state registration At least half of the authorized capital must be paid. A joint stock company, according to the law, must be registered without an initial payment. 50% of the company's authorized capital is repaid in the first 3 months of its operation. And after a year of operation, the entire fund is paid for.
The authorized capital of a company is cash, material assets, property, and securities.
Authorized capital composition
The authorized capital of an organization is the source that forms the assets of the enterprise. The foundation is created from the property of its founders - legal or individuals. Contributions can be in the form of cash, property, as well as rights, such as rent. Restrictions exist only for special types of organizations. Thus, banking institutions cannot form their authorized capital from securities.
The founder is obliged to contribute property to this fund without fail. Under no circumstances can he be relieved of his duty.
Formation process
The organization's charter regulates the process of transferring property from the founders to a legal entity. For limited and additional liability companies, these actions are also stipulated in memorandum of association. The documents establish the responsibility of the founders for late contributions of their shares to the general fund.
Authorized capital is property assessed by making a decision on its value at the general meeting of founders. This is done by an independent appraiser and is entered into the documentation after general agreement. 
The transfer of values is carried out using an act of acceptance of the transfer. This document, together with the contributions reflected in the balance sheet of the legal entity, act as evidence of the payment of the authorized capital within the agreed time frame.
When paying off your share in the enterprise fund, proof of the contribution of the founder’s share is a certificate from the bank with the account of the legal entity.
The essence of the insurance function
The concept of authorized capital as the property of an enterprise is rather conditional. In the realities of the modern organization of work of companies and partnerships, the contributed property is valued according to an agreement between the shareholders. 
Before registration, a legal entity does not yet have an authorized capital. And after registration, the capital is put into circulation and can increase and decrease. Therefore, in the reality of the financial and economic activity of the enterprise, this fund loses its insurance function.
Due to such aspects, some countries have abandoned fixing the size of the authorized capital. At the moment, 100 minimum wages cannot protect the rights of creditors, since in terms of cash this value is only 490 dollars. USA.
How is the authorized capital used?
Due to the inherent stability of the fund in question, it is used to cover less liquid fixed assets.
Share capital is an asset such as land, equipment and real estate. For a newly created enterprise, the most popular balance sheet items covered by the established fund are non-current assets and fixed assets. The cost of such objects over a certain period is transferred to the cost of manufactured products in the form of depreciation.
To finance working capital, either short-term borrowed capital or retained earnings are used.
Installation capital of LLC and ALC
There are certain features of creating the authorized capital of limited and additional liability companies. He, according to Part 1 of Art. 90 of the Civil Code of the Russian Federation, consists of contributions from its participants. The size and proportions are set in advance.
For such organizations, the authorized capital is funds that must be paid at least 50% at the time of registration. The second half is paid during the year of the company's activity.
If this does not happen, the enterprise announces its liquidation or a reduction in the size of the authorized capital.
If after each year of operation the net assets have a lower value than the authorized capital, it is reduced in accordance with the procedure established by law.
Authorized capital of a joint stock company
According to paragraph 1 of Art. 99 of the Civil Code of the Russian Federation, the authorized capital consists of the net value of the company’s shares that were acquired by its shareholders. When establishing an OJSC, all its shares must be distributed among the founders.
The increase in the value of the company's authorized capital occurs by increasing the par value of securities or issuing an additional number of shares.
When the value of net assets decreases, the same rules apply for OJSC as for LLCs and ALCs.
Covering debts upon liquidation of an enterprise
The size of the authorized capital is the insurance fund of the enterprise, from which the legal entity makes settlements with creditors.
However, depending on the type of organization of the company, the liability in the event of reorganization varies. Larger partnerships have less liability than co-op owners. The latter are responsible to creditors on an equal basis with the founders of full liability companies.
The majority of organizations bear partial responsibility. The debt to creditors is repaid from the amount of the authorized capital. As a rule, in the current conditions it is completely insufficient to pay off all obligations in the event of bankruptcy of the organization. 
If a company's own funds are insufficient to repay its debt, its credit rating drops. Such an enterprise is unattractive for investment and cannot count on expansion in the future. production assets through credit funds. It is in the interests of a legal entity to maintain its credit rating at high level at the expense of a sufficient amount of own funds, in particular the authorized capital.
Cooperatives and limited liability companies cover their obligations to creditors with the personal property of all founders of the partnership and their shares in other organizations.
Fund Size Changes
The authorized capital of an enterprise is a fixed amount. However, there are cases when its size changes.
An increase in the authorized capital is possible only when additional participants join the organization. The attached share of the authorized capital is one of possible reasons increasing the fund. The issue of shares carried out after registration of a legal entity also affects the authorized capital.
Such changes are carried out strictly in accordance with the law and are documented. All cases of increasing the fund are prescribed in the relevant regulatory and legal sources.
Additional funds may be allocated to the authorized capital after the sale of shares at a price that is higher than their nominal value. In the balance sheet, these funds are displayed in the “Additional capital” section. These funds increase the company's reliability rating.
Authorized capital is the means by which an enterprise must form reserve capital. This fund must be at least 15% of the authorized fund.
If the value of net acts for the period decreased and became lower than the value of the authorized capital, the enterprise announces a reduction in its authorized capital. Such actions lead to a decrease in credit rating and reduce the company's reliability in the eyes of investors.
Having examined the features of the formation and management of fixed assets of an enterprise, one can understand the principle of organizing the company’s funds. Without it, the activities of a legal entity are impossible. Authorized capital is a fund created upon registration of an enterprise. Its value is regulated by law and acts as a guarantee of the organization’s solvency to investors. Fund changes affect the company's rating in the eyes of creditors.
Authorized capital of a legal entity
Authorized capital is a necessary contribution to the business at the start. What authorized capital is needed to open an LLC in 2018? The answer is in our article.
What is the authorized capital of an enterprise? The authorized capital is, in fact, a minimum level guarantee of fulfillment of the obligations of a legal entity. Accordingly, this is the property (monetary or monetary and non-monetary) determined by law and the voluntary initiative of the founders that the company provides as a guarantee of the interests of creditors. The amount of the authorized capital must be fixed in. By the way, there is no consensus on how to pronounce it correctly - authorized or authorized capital. From the point of view of a number of Russian language dictionaries, it is correct to say “the authorized capital of an enterprise,” but at the same time, other sources of phonetics and spelling allow both options as equal.
Why do you need authorized capital? As noted above, the authorized capital is the capital with which the company can pay for its obligations. Thus, creditors by law have the right to recover from unlucky entrepreneurs only those assets that constitute the authorized capital and are clearly stated in. The founders contribute their funds in certain shares. A share in the authorized capital is the contribution of a specific founder to the general account of the authorized capital. Depending on the size of the share, the founders will make decisions in the activities of the company.
Authorized capital of LLC since 2018
And some more information you should know:
- Contribution of the authorized capital when registering an LLC is not required; it is only important to pay the authorized capital to each of the founders within 4 months after receiving the LLC registration documents.
- Payment of the authorized capital upon registration of an LLC in 2018 is made by each of the founders personally in the amount corresponding to his share.
- When determining shares at the stage of registration of an LLC, the founders must remember that the nominal value of a share in the authorized capital is a value in rubles; in the future, it may grow if the authorized capital grows.
- The authorized capital can be increased both from cash and from property contributions, securities or other assets.
- The authorized capital of an LLC in 2018 can only be changed with the participation of a notary.
Formation of authorized capital
Let's look at an example of how the authorized capital of a limited liability company can be formed. Let's assume that three founders decide to organize their own LLC. According to the law, the size of the authorized capital of an LLC in 2018 cannot be less than 10,000 rubles. If all founders want to have equal shares in the authorized capital, then they need to increase the authorized capital to a number divisible by 3. Thus, the minimum amount of the authorized capital of the LLC should be 10,002 rubles, and each founder is required to make a contribution to the authorized capital of 3,334 rub. Watch the video, which explains in detail the process of forming the authorized capital:
Minimum amount of authorized capital of LLC in 2018
The minimum authorized capital of an LLC is 10,000 rubles, but there are special features for a number of enterprises. The minimum authorized capital is prescribed by law for joint stock companies. In addition, for banks, insurance companies, vodka producers and some other types of business, the amount is different and much larger: from 80 million rubles. and higher. By the way, entrepreneurs often choose individual entrepreneurs because... This organizational form does not require such a monetary contribution at the start.
Deadline for contribution of authorized capital to LLC
The maximum payment period is 4 months from the date of registration of the LLC.
By this time, each of the founders is obliged to contribute their share. Otherwise, at the general meeting of the founders a decision is made to transfer the share in favor of the company.
How to deposit authorized capital into the account of the LLC being created
The procedure for contributing the authorized capital of an LLC has not changed since 2018. As in 2017, the minimum amount must be deposited in cash only. Since it is permitted to deposit the authorized capital after the opening of an LLC, depositing the authorized capital into the current account does not present any problems. After registration, a current account is opened to which all founders transfer funds. There is only a time limit - no later than 4 months from the date of registration. Is it possible to spend the authorized capital of an LLC? Yes, you can spend it on the needs of the company, including paying salaries or purchasing office equipment. A sample certificate of payment for a share in the authorized capital of an LLC is available on our website.
