Contribution to property has become repayable. Will he become an alternative to a loan in a group of companies
Making a choice in favor of one or another reason for tax-free cash flow in a group of companies, the possibility of their return without taxes is often a key criterion. If we add to this the efficiency of processing, we get the expected result – loans are the most popular tool for the flow of money.
The closest alternative to a loan – a contribution to property without increasing the authorized capital – has long been virtually irretrievable. The return on investments was possible only in the form of dividends or upon sale of a share in the business, with appropriate taxation.
Since the beginning of 2019, the situation has changed – the participant has the opportunity to return previously made contributions to the property of a subsidiary without additional taxation. Continue reading
LLC is the most common form of legal entities in Russia. This is a kind of intermediate type of participation in entrepreneurial activity between the association of only capital (joint-stock companies) and the association of personal, primarily labor, participation (for example, a production cooperative). It is this feature that determines the rules for exclusion of a person from the membership of LLC, the presence of a number of special rules aimed at protecting his interests.
For example, without the consent of all participants, a company cannot be reorganized (for comparison, in joint-stock companies, in order to make such a decision, 75% of the votes of those participating in the meeting of shareholders must be collected). This protects the interests of all participants, primarily personal participation, taking into account personal opinions, regardless of their share in the authorized capital. Continue reading
Sooner or later, any business is faced with the need to change its operational manager. The founding owners eventually move away from solving current issues, giving way to hired, young and daring managers. Often, to create additional motivation, this process is accompanied by the allocation of managers stakes in the company.
From the point of view of increasing the involvement and interest of a manager in a business, this is certainly the right step. However, trusting hired directors to resolve operational issues, it is necessary to retain the ability at any time to reverse the transfer of authority and ownership. After all, no one guarantees that having received a share in the business, the new co-owner will not decide to go to work somewhere else.
We show by a real example how the dependence of ownership of shares on the fulfillment of an employee’s labor function in one of our projects was ensured. Important: inclusion in co-owners was due to participation in management. Accordingly, when an employee is dismissed from the company, there must be grounds for depriving him of his share. Continue reading
A contribution is any economic resource that creates or can create returns as a result of applying one or more processes.A process is any system, standard, protocol, agreement or rule that, when applied to a deposit or deposits, creates or can produce returns.
Return – the result of contributions and processes applied to such deposits that provide or are able to provide income in the form of dividends, cost savings or other economic benefits directly to investors or other owners, members or participants.
Given the fact that the acquisition of a business and a group of individual assets is reflected in the statements differently, it is important to understand how the first differs from the second. Such an analysis is based on the three components of a business in terms of IFRS 3 Business Combinations, which is why if a company is able to demonstrate contributions, processes and returns, then, as a rule, there is a business as such. Continue reading
Legal “packaging” of new projects always consists in selecting a balanced set of tools: choosing the right organizational form of the company, contracts, working out the fundamental conditions of constituent documents and agreements, etc. One tool is not enough. At the same time, we do not forget that any legal structure of a business must simultaneously solve several problems:
fixing relationships between partners,
providing guarantees to their interests in this project,
property safety of a business project and its participants,
legal tax savings,
owner control. Continue reading