- The members of a private joint stock company must not be less than three but the members of a LLC must not be less than two.
- At the time of formation of the private joint stock and LLC company, the share capital of the companies must not be less than one million Rials.
- As a pre-requirement for formation of private joint stock companies, the promoters
must deposit at least 35 per cent of the capital of the company in a bank and present a declaration proving it and the other 65 per cent must be subscribed by shareholders, but in LLC the whole capital must be given to the managing director and he/she shall confirm its reception and there is no need for a bank declaration.
- The selection of inspector or inspectors is mandatory in a private joint stock company while there is not such a necessity in LLC.
- Management duration is at most two years in a private joint stock company and it is extendable while there is no limitation for management in LLC and it is possible to determine a time limit in the articles of association for a LLC manager.
- Selecting a newspaper with a widespread circulation for publishing all subsequent notices and declarations of a private joint stock company is mandatory while there is not such a necessity for a LLC.
- General meetings of a private joint stock company shall be managed by a directorate composed of a chairman, secretary, and two supervisors while such meetings are held in a LLC by the Board of supervisors only when there are at least 12 members in the company.
- There are no shares in a LLC and members are liable for the payment of the debts of the company up to their own capital in the company.
- The managers of private joint stock companies shall be among the shareholders of the company but the managers of a LLC can be selected from members or non-members.
- Profits in a private joint stock company shall be distributed according to the shares of shareholders while in a LLC, profit distribution is based on the amount of capital which is brought by each member. The articles of association of a LLC can determine a different arrangement for profit distribution.
- Voting power is based on the number of shares in a private joint stock company while in a LLC is due to the amount of each member`s capital.
- Non-cash contributions shall be appraised by the members of a LLC while such an appraisal shall be carried out by the experts of the Ministry of Justice in a private joint stock company.
FAR law firm