A, a limited liability company and a joint stock limited company are companies, with some characteristics of * * * company, the difference between the two is mainly manifested in:
(1) is a joint venture or a joint venture.
Limited liability company is produced on the basis of absorbing the advantages of unlimited company and joint stock limited company. On the one hand, its shareholders are limited to the amount of capital contribution, enjoy rights and bear responsibilities, which is different from unlimited companies. On the other hand, because of its non-public offering, shareholders are closely related and have certain humanity, so it is different from a joint stock limited company. A company limited by shares is a complete joint venture. Its own composition and credit basis is the company's capital, which has nothing to do with the personal nature (reputation, status and prestige) of shareholders, and shareholders are not allowed to invest in personal credit and services. This complete capital combination is different from unlimited companies and limited liability companies.
(2) Whether the shares are equal.
All the assets of a limited liability company do not need to be divided into equal shares, and shareholders only need to contribute according to the proportion of capital contribution determined in the agreement, and enjoy rights and assume obligations according to this proportion. Generally speaking, a joint stock limited company must convert its shares into equal shares, which is different from a limited liability company. This feature also ensures the universality, openness and equality of the joint stock limited company.
(3) Number of shareholders.
A limited liability company should not have too many shareholders because of its humanity and trust among shareholders. China's company law stipulates 2-50 people. There are both upper and lower limits on the number of shareholders in a limited liability company, while a joint stock limited company has only a lower limit, that is, only the minimum number of promoters is stipulated, but in fact only the minimum quorum of shareholders is stipulated, and there is no examination and approval of shareholders' departments. Limited liability companies are mostly small and medium-sized enterprises, and because of their closeness and humanization, the legal requirements are not as strict as those of joint-stock companies, and some of them can be simplified and have certain arbitrary choices.
Second, the meaning, * * * the similarities and differences between a limited liability company and a joint stock limited company
(a) the meaning of limited liability company and joint stock limited company
1. The meaning of limited liability company:
The so-called limited liability company, also known as limited company, is called closed company or private company in Britain and America. It refers to an enterprise legal person established in accordance with the conditions stipulated by law, which is jointly funded by two or more shareholders and bears limited liability for the company's operation to the extent of the capital contribution. The company is responsible for its debts with all its assets.
2. The meaning of a company limited by shares:
A joint-stock company is also called a joint-stock company. Britain and the United States are called public companies or public companies, which means that the registered capital consists of equal shares, and shareholders raise capital by issuing shares. China's "Company Law" stipulates: "A joint stock limited company refers to an enterprise legal person whose capital is divided into equal shares, and the shareholders are liable to the company to the extent of their shares, and the company is liable to the company's debts with all its assets."
(2) Similarities between limited liability companies and joint stock limited companies.
The basic feature of the company system is that many shareholders jointly contribute their shares to form a company system. As the joint-stock company is a typical joint venture company, it pays attention to the stability of capital in order to maintain external credit and realize dividend benefits. Therefore, the similarities between a limited liability company and a joint stock limited company are as follows:
1. Implemented the Three Principles of Capital.
The first is the principle of capital determination. When a company is established, the total fixed capital of the company must be determined in the articles of association and fully subscribed. Even if the capital is increased, it must be subscribed in full.
The second is the principle of capital maintenance. During the existence of a company, it is necessary to maintain the property equivalent to its capital in order to prevent the capital from being greatly reduced and ensure the interests of creditors. At the same time, it also prevents shareholders from demanding too much profit distribution and ensures the normal operation of the company.
The third is the "principle of constant capital". Once the company's capital is determined, it shall not be changed at will except in strict legal procedures, otherwise it will harm the interests of shareholders and creditors. As shareholders, they have the right and freedom to transfer shares, but they are not allowed to withdraw their share capital. The company's capital increase or capital decrease must be carried out in strict accordance with legal conditions and procedures.
2. The principle of "separation of two powers" was implemented.
The separation of corporate property rights and shareholders' capital contribution property rights is as follows: firstly, according to the provisions of China's Company Law, "after the company is registered, shareholders may not withdraw their capital contribution and no longer directly control and dominate this part of the property"; "Separation of the two powers" is not a mutual negation of the two. Because once the shareholder's property is invested in the company, it constitutes the company's legal person property, and the ownership of the shareholder's property is transformed into equity in the company. However, shareholders will not lose their investment property rights, they still enjoy the owner's right to benefit from assets, the right to income, the right to vote on decentralization and major issues, and the right to choose managers. At the same time, they can freely transfer their shares according to law, and enjoy the final ownership of the remaining property when the company terminates.
3. Implement the principle of "limited liability".
A limited liability company shall bear limited liability to the company to the extent of its capital contribution, and the company shall bear limited liability to its debts with all its assets. In a joint stock limited company, the shareholders are limited to the shares they hold, and the company is limited to the debts of all its assets to the company.
4. All companies have legal personality.
In accordance with the provisions of the law or the articles of association of the enterprise, those who exercise their functions and powers on behalf of the enterprise as a legal person are called legal representatives. An enterprise as a legal person refers to an economic entity that has obtained legal person status, operates independently and is responsible for its own profits and losses. Legal person is a social organization with civil rights and subjects.
(C) the difference between a limited liability company and a joint stock limited company
As a legal person and market subject, joint-stock companies bear civil liability for their production and business activities. The property right relationship of a joint-stock company determines the operating mechanism of shareholders' interests, risks and company profits and losses. Therefore, the main difference between a limited liability company and a joint stock limited company lies in:
1. The number of shareholders is different.
The company laws of most countries in the world stipulate that a limited liability company has at least 2 shareholders and at most 50 shareholders (there are also 30 shareholders). There is no need to set up a shareholders' meeting because there are few shareholders. There is no limit to the number of shareholders of a joint stock limited company, and some large companies have hundreds of thousands or even millions of people. Different from a limited liability company, it is necessary to set up a general meeting of shareholders, which is the highest authority of the company.
2. The registered capital is different.
Limited liability companies require less minimum capital, and the registered capital standards are different according to the nature and scope of production and operation.
Specific competition is fierce, and only the latter has the institutional nature of expanding the scale of enterprises. However, in Coase's realistic economic activities, it is impossible for the company form of joint stock limited company to expand the company scale unscrupulously, because the management cost also increases with the expansion of the company scale, and the internal governance cost of the company is equal to the market transaction cost, which is the boundary of the largest enterprise. On the other hand, analyzing the limited liability company, under certain circumstances, compared with the joint stock limited company, the limited liability company has the characteristics of lower management cost.
The differences of corporate governance structure under the requirement of reducing transaction costs, investors' consideration of the safety of capital contribution and the requirements of management costs have led to the diversification of corporate governance structure. "Socialized mass production requires modern enterprises to separate the shareholders' rights of investors from the corporate ownership of the company, so as to promote corporate management to meet the needs of specialization and improve the efficiency of corporate asset management. The limited responsibility system reduces the cost of this separation of functions and professional management in many ways. "
1. Company organizations have different permissions;
The organizational structure of a limited liability company is relatively simple, and only the board of directors can be set up, without the shareholders' meeting and the board of supervisors. The board of directors is often held by individual shareholders, which is more flexible.
The authority of the shareholders' meeting of a joint stock limited company is limited to a certain extent, because the scale of the company has expanded, and managers with professional knowledge are needed for special management. The company's property ownership and management rights are relatively separated, and the actual operation of the company is in the hands of the company's asset managers. According to the transaction cost theory, reducing the cost of corporate governance can increase its market competitiveness, but pursuing economies of scale can also increase its market competitiveness. This shows that under the requirements of market competition, limited liability companies and joint stock limited companies play their own characteristics to reduce the total transaction costs.
2. Different degrees of financial disclosure;
The financial status of a limited liability company only needs to be handed over to shareholders within the time limit stipulated in the company's articles of association, and there is no need for announcement and inspection. The financial status is relatively confidential, so there is a saying that the company is closed; Limited by Share Ltd, because its investors are scattered, investors can only know the company's operating conditions through its financial statements, so it is also called an open company. However, it is difficult to require the company to publish its financial status regularly, which is also one of the management costs brought by the company's expansion. In fact, although the management cost of the company has increased, it may be reduced for the whole transaction cost. Because the investors of a joint-stock limited liability company may know little about the company, in real life, in order to ensure the safety of funds, it will cost a lot of money, time and other costs to obtain information about the company's operating conditions.
3. The conditions of equity transfer are different;
Chapter III of the Company Law makes detailed provisions on the equity transfer of a limited liability company, and shareholders can freely transfer all or part of their share capital according to law. When a shareholder transfers its share capital to a person other than the company according to law, it can only be implemented with the consent of more than half of the shareholders; Other shareholders of the company have the preemptive right under the condition of equal transfer of share capital. However, in view of the problem that minority shareholders can't quit the company because of "big shareholders bullying minority shareholders" in China, Article 75 stipulates that shareholders of a limited liability company may request the company to purchase its equity at a reasonable price. Shareholders of a joint stock limited company can basically trade and transfer their shares freely, but they cannot withdraw their shares, except that the promoters and internal personnel of the company, such as directors, supervisors and senior managers, restrict the transfer of shares. It can be seen that the limited liability company has very strict requirements for the transfer of shareholders' equity, while the limited liability company has obviously lower requirements for this. From the perspective of transaction cost, there is a strong personal credit relationship between shareholders of a limited liability company, that is, the color of "human cooperation", so it is necessary to prevent individual shareholders from violating this "obligation" after the company is established. It should be noted that legal provisions increase the cost of opportunism to some extent, but the cost input stipulated by this law will lead to a greater reduction in transaction costs, because potential investors with lower capital contribution ability can set up companies with others at ease. I think we should properly handle the situation of "one share dominates" and "big shareholders bully small shareholders" in domestic limited companies, and form more potential investors with low capital contribution ability, so as to curb the above situation and form a more favorable situation for shareholders. Otherwise, it can only be a vicious circle.
A company limited by shares is different. The transfer of shares by its shareholders will not have a great impact on the company, and even reduce the time and other costs caused by the restrictions of potential investors on the transfer of their capital contribution, thus attracting more potential investors.
4. Different requirements for the increase or decrease of shares;
Article 35 of the Company Law stipulates that when a limited liability company increases its capital, in principle, shareholders have the priority to subscribe for the capital contribution in proportion to the paid-in capital contribution. Article 134 stipulates that the issuance of new shares by a joint stock limited company shall be decided by the shareholders' meeting or the board of directors in accordance with the articles of association. With regard to capital reduction, Article 178 stipulates that when a company needs to reduce its registered capital, it must prepare a balance sheet and a list of assets. The company shall notify the creditors within ten days from the date of making the resolution to reduce the registered capital, and make an announcement in the newspaper within thirty days. Creditors have the right to require the company to pay off debts or provide corresponding guarantees within 30 days from the date of receiving the notice, or within 45 days from the date of announcement if they have not received the notice. The registered capital of the company after capital reduction shall not be lower than the statutory minimum. As can be seen from the above, the protection of the original shareholders of a limited liability company plays an important role in its corporate governance, as does a joint stock limited company. Its capital increase and capital decrease give priority to the interests of minority shareholders, with the same purpose of attracting more potential investors. As for these two corporate forms, the same concern is the protection of corporate creditors. Posner mentioned that due to limited liability, the company pays higher interest to creditors, so that creditors can fully compensate the risks brought by the company's default. Then, if the company reduces the risk brought by registered capital, it will inevitably produce the same risk compensation, which is the increase of transaction cost. Then, in order to protect the transaction security and reduce the transaction risk of counterparties or other possible creditors, that is, reduce the transaction cost of the company.
(4), conclusion and others
Through the above rough comparison, it is better to say that the limited liability company meets the needs of large enterprises and enterprise groups than the small and medium-sized enterprises. It is better to say that the requirement of reducing transaction costs in market competition determines two different corporate forms, so that when we further examine the market demand, we can further improve these two corporate governance structures. I think it can be said that domestic limited companies and joint-stock limited liability companies in China are generally in line with the international trend, but there are many different situations in China, so we need to study and try various solutions according to these actual situations. As for limited liability companies and joint stock limited companies, we should not only strengthen their respective advantages, but also strengthen their inevitable congenital defects.
Risk disclosure: This information does not constitute any investment advice. Investors should not substitute such information for their independent judgment, or make decisions only based on such information. It does not constitute any trading operation and does not guarantee any income. If you operate by yourself, please pay attention to position control and risk control.