Is the foundation agreement required when creating an LLC

Mar, 04 2021

Contents:

The foundation agreement and the agreement on the creation of an LLC are two different things. The agreement on the creation of LLC was first applied in early June 2009, making it a replacement for the constituent agreement of an LLC. Such changes occurred due to the appearance of a new law adopted on December 30, 2008 and finalized on December 17 of the following year, called “On Amendments to Part One of the Civil Code of the Russian Federation and Certain Legislative Acts of the Russian Federation”. 

To date, the expression the foundation agreement of LLC has gone away, having migrated from the official documentation to oral speech, since it has long been fixed in it. The agreement on the creation of LLC differs from the constituent agreement in that it only affects the legal relations and joint activities related to the liability of the founders at the time of company’s registration. The contract is concluded only if LLC founders are more than two people. After the registration is completed and the parties fulfill all the conditions, the contract can be terminated.

The content of the document on the creation of LLC

The standard content of any document includes:

  • General information about the founders of LLC (individuals and / or legal entities);
  • Full and abbreviated name of LLC;
  • Legal address;
  • Information about the nominal value of the Authorized Capital and information about the ways of its formation;
  • Shares of LLC participants in the distribution of the Authorized capital;
  • Information about all actions with authorized funds, whether it is an increase or decrease;
  • Information on the procedure for allocating income between members of a Limited Liability Company;
  • Information about the control unit;
  • Withdrawal procedure;
  • Data on the procedure for resolving disputes;
  • Other information.

The sequence of actions when concluding the contract

The signing of the agreement will be reflected in the act of the corporate meeting of the founders. The document must be signed by each member of the LLC. If there are legal entities in a limited liability company, the contract is signed exclusively by this legal representative on behalf of the head of the company, who signs and seals it.

Author of the article
Is the foundation agreement required when creating an LLC
Valentina Khlavich
Managing Partner
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