When choosing a business form, a legal entity should take into account that limited liability companies (LLC) and joint-stock companies (JSC) are business forms very similar in a number of features, established as a result of capital consolidation, which do not require that their members personally participate in their business. Both natural persons and legal entities may be members of such economic entities.

      Capital consolidation is executed in the form of the authorized capital formation at the expense of contributions of members, which is divided into units and shares in LLC and JSC, accordingly.

      Members (shareholders) of these economic entities are not liable for their companies' obligations, and only bear risks of losses resulting from the company activities to the extent of the value of their units or shares.

      All relations in such economic entity are arranged in accordance with "the capital". Each member (shareholder) has a number of votes proportionate to the paid unit or shares. The assets left after liquidation of a company are distributed between the members (shareholders) in the same proportion. Members of LLC and JSC forfeit the right to the property contributed to the authorized capital of the companies, but at the same time obtain certain rights with respect to commitments of these legal entities.

      The experience of work with economic entities of these business forms allows to draw the conclusion that in the event there is no objective to involve an unlimited number of persons in the economic entity, it would be reasonable to choose a business form of a limited liability company. It is reasoned by the absence of necessity to make a statutory registration of the shares issue. The fact that JSC unlike LLC should meet the requirements connected with keeping of a register of shareholders is an essential argument in favor of the latter.

      In a number of cases, especially when a company intends to work with foreign legal entities, it is reasonable to establish an LLC with foreign investments (a subsidiary). Such form will considerably facilitate the work with the customs authorities. Besides, if one hundred percent of the authorized capital of an LLC are owned by a foreign legal entity, there will be no problems with the company management which is often the case when there are two or more members in the company.

      An overall list of the documents to be submitted by a foreign legal entity for registration of its subsidiary in the territory of RF includes:

1. A bank reference confirming opening of an account for the foreign legal entity at its location.
2. A certificate of registration of the foreign legal entity.
3. A tax registration certificate of the foreign legal entity.
4. A certificate of the directors of the foreign legal entity.
5. A certificate of the shareholders of the foreign legal entity.
6. A certificate confirming location of the foreign legal entity
7. A resolution of the foreign legal entity to establish a subsidiary in the territory of RF.
8. A power of attorney to have the company registered.

1. In case the authorized capital is increased on account of additional contributions made by all members of the company pursuant to para. 1, Art. 12 of the Federal Law On Limited Liability Companies (the FL), the General Meeting of Members should determine the total value of additional contributions and the uniform ratio between the value of a member's additional contribution and the amount the par value of his unit is increased by. It is prohibited to restrict a member's right to make an additional contribution not exceeding that part of the total value of additional contributions which is proportionate to the value of his unit in the authorized capital of the company.
   
         The General Meeting of Members may resolve to increase the authorized capital on account of contributions made by individual members of the company;
         
2. increase of the authorized capital on account of third persons' contributions is permitted only whenever not prohibited by the company charter (para. 2, Art. 19 of the FL);
3. additional contributions of the company members and those of third persons to the authorized capital are made in a manner and within the periods established by Art. 19 of the FL.

1. contributions to the company assets are no contributions to the authorized capital and do not change the amount and the par value of the members' units in the authorized capital;
2. an obligation to make contributions to the company assets arises only if provided for in the company charter and if a respective resolution is adopted by the General Meeting of Members;
3. contributions to the company assets are made by all its members in proportion to their units in the authorized capital unless otherwise provided for by the company charter;
4. restrictions related to contributions to the company assets must be provided for by the charter of the company. These restrictions do not concern other persons who acquire units as a result of their alienation;
5. contributions to the company assets are made in cash unless the charter or the resolution of the General Meeting of Members stipulate otherwise.
6. a member's withdrawal from the company does not release him from the obligation to contribute to the assets of the company if the latter arose before submission of a withdrawal notice. Taking into account that contributions to the company assets change the value of the net assets which, in its turn, determines the actual value of the unit of the company member, including that of a withdrawing member, expulsion of a member from the company pursuant to Art. 10 of the FL does not release him from the obligation to contribute to the company assets, either, if the obligation arose before his expulsion.