Limited liability company, referred to as limited company for short, the shareholders are liable to the company to the extent of their capital contribution, and the company is liable to the debts of the company with all its assets. According to relevant regulations, such companies must indicate the words "limited liability company" or "limited company" in their company names.
The difference between a limited liability company and a joint stock limited company is as follows:
1 The number of shareholders is different. A limited liability company shall have at least 2 shareholders and at most 50 shareholders (30 shareholders are also stipulated). There is no need to set up a shareholders' meeting because there are few shareholders. However, there is no limit on the number of shareholders of a joint stock limited company. Some big companies have hundreds of thousands or even millions of people. Different from a limited liability company, a shareholders' meeting must be established, which is the highest authority of the company.
2. The authority of the company organization is different. A limited liability company has a small number of shareholders and a simple organization. It can only set up a board of directors, not a shareholders' meeting and a board of supervisors. Therefore, the board of directors is often held by individual shareholders, which has greater flexibility. The establishment procedure and organization of a joint stock limited company are complex, and the number of shareholders is relatively scattered. Therefore, the authority of the shareholders' meeting is restricted to a certain extent, and the authority of the board of directors is centralized;
3. Share capital is divided in different ways. The shares of a limited liability company may not be divided into equal shares, and its capital shall be divided according to the capital contribution subscribed by shareholders; The shares of a joint stock limited company must be equal, with a small share capital division and equal amount per share;
4. Sponsors raise funds in different ways. A limited liability company can only raise funds from sponsors, but not from the public, and its shares cannot be publicly issued, let alone listed and traded; A joint stock limited company may raise funds from the society by initiating the establishment or raising funds, and its shares may be publicly issued and traded;
5. The conditions of equity transfer are different. Shareholders of a limited liability company may freely transfer all or part of their share capital according to law. When a shareholder transfers its share capital to a person outside the company according to law, it must be approved by more than half of the shareholders. Other shareholders of the company have priority under the same conditions of transferring share capital; Shares held by shareholders of a joint stock limited company can be traded and transferred, but they cannot be withdrawn.
Article 44 of People's Republic of China (PRC) Company Law A limited liability company shall have a board of directors with three to thirteen members. However, unless otherwise provided for in Article 50 of this Law.
A limited liability company established by two or more state-owned enterprises or two or more other state-owned investors shall have staff representatives among its board members; Other members of the board of directors of a limited liability company may include representatives of employees of the company.
The employee representatives in the board of directors are elected by the employees of the company through employee congresses, employee congresses or other forms of democratic elections.
The board of directors shall have a chairman and may have a vice-chairman. The method for the formation of the chairman and vice chairman shall be stipulated in the articles of association.