Increase (reduction) of the authorized capital
Authorized capital is one of several prerequisites, without which no company can start its activities. When any organization is opened an authorized capital is formed taking into account the expected economic (production) activity and is recorded at the time of state registration of the company. That is why a change in the authorized capital both upward and downward, entails not only a change in the organization operations, but also changes in the constituent documents and Unified State Register of Legal Entities. How does it work and how the RosCo specialists may help you – read below.
It is a known fact that the more the authorized capital of the company, the more solid and more reliable it looks in the eyes of business partners and customers. And it has a greater chance of success with the participation in public tenders and in obtaining loans from banks.
In accordance with the applicable legislation, there are 3 ways to increase the authorized capital:
Increase of the authorized capital from the assets of the company shall be made by the decision of the general meeting of the company, and accepted only on the basis of the financial statements for the previous year. In this method of the authorized capital increase the nominal value of the shares of all members of the company is increased in proportion without changing the amount of their shares.
Increase of the authorized capital by additional contributions of members of the company shall be made by the decision of the general meeting of the company. Additional contributions are made within two months from the date of decision. Then, within one month from the date of expiry of the period for making additional contributions, the general meeting of members of the company shall decide on approval of the results of additional contributions of members of the company.
Increase of the authorized capital by a third party is possible if it does not contradict the articles of association of the company. The general meeting of the company decides to increase its authorized capital on the basis of third party application (applications of third parties). At the same time it shall adopt a number of important decisions. For more information about the procedure of capital increase by third parties go to the section «entry of a member in llc by contributing to the company's authorized capital».
Regardless of the chosen method of capital increase, the decision of the general meeting of the company members shall approve the new versions of the articles of association. At the same time an application is made for the state registration of amendments to the articles of association of the company, due to the increase of the authorized capital of the company. The application is signed by the General Director of the Company and is certified by a Notary Public. Together with the established set of documents this application is sent to the registration tax authority within one month from the date of the decision to increase the authorized capital of the company.
It is also worth noting that the cases when the increase of the authorized capital is made not in rubles but in foreign currency are extraordinary complex. But it is no longer difficult when the issue is solved by the RosCo specialists. Due to the positive experience of support of many foreign companies in Russia (Ford, Verbatim, HUAWEI, etc.) we solve issues of any complexity.
Reduction of the authorized capital of going through:
- Reduction of the nominal value of shares of all members of company in the authorized capital of the company. Within three working days after the company’s decision to reduce its authorized capital the registration tax authority shall be notified thereof. After that, twice, a notice of reduction of the authorized capital of the company shall be published in the journal “Bulletin of the state registration” once a month.
- Redemptions of shares held by the company. Shares held by the company should be distributed throughout the year, from the date of transfer of a share or part of share in the authorized capital to the company. If the Company failed to sell or distribute a share, it is to be redeemed with the respective reduction of the Authorized Capital.
However, it should be borne in mind that, if upon redemption of a share, the Authorized Capital is equal to the minimum 10,000 rubles - the company may not make a reduction of the authorized capital and must be closed.
So, as we have seen, the increase (reduction) of the authorized capital is a rather complicated procedure that requires rich legal knowledge and skills, as well as a competent execution. Sometimes, without proper training, the company employees make a lot of mistakes in the process of registration of changes in the authorized capital, thereby delaying their entry into force.
The cost of services on registration of increase (reduction) of the authorized capital of the company:
from 9,700 rubles
Remember! During the time that we save for you, you will earn a lot more money than are required to pay for our services.
Why is it better to entrust this task to the RosCo specialists?
- Our specialists supported registration procedures of increase/reduction of the authorized capital of more than 1,000 companies. We are fully competent in the matter.
- The whole procedure will be made unnoticed for you and will take a minimum of your time. You will be required only once to provide the required set of documents.
- All necessary documents for increase/reduction of the authorized capital, including the texts of the decisions, will be prepared by the RosCo specialists. You do not have to delve into all the intricacies of paperwork.
- We will accompany the Director General to the Notary Public to certify documents.
- Independently, without your participation, we will submit to and obtain the documents from a tax office under a notarized power of attorney.
(Certificate No 1809 dated 28.12.2009)
(Certificate No 78)
(Russian Society of Evaluators)
of Commerce and Industry
(Certificate No 123-973 dated 21.12.2009)
Partnership of Turkish Entrepreneurs (RTIB)
is included in the register of reliable enterprises of Moscow